Scott Sullivan Biography

(1963–)
Scott Sullivan is one of the most infamous CFOs in business history, best known for committing the financial fraud that led to WorldCom's $11 billion financial collapse.

Synopsis

Born in New York in 1963, Scott Sullivan earned an accounting degree from State University of New York in Oswego, New York, in 1983. He worked at several firms, including Advanced Telecommunications Corporation, in his early career, and began working for WorldCom in 1992. Two years later, he became the company's CFO. In 2000, Sullivan began manipulating the company's spending reports to hide its financial problems. He was fired from WorldCom two years later for his actions, which led to the company's financial collapse. Before long, Sullivan was indicted on several counts of accounting fraud relating to his role in the WorldCom case. In 2004, he pleaded guilty to the charges as part of a plea agreement. He was sentenced to five years the following year, and was released in 2009.

Early Life and Career

Business executive, accountant and convict Scott D. Sullivan was born in New York in 1963. He attended Bethlehem Central High School in Delmar, New York, where he was known for his abilities as a wrestler. In 1983, Sullivan received his bachelor of science degree in accounting from the State University of New York at Oswego.

After graduation, Sullivan worked as an accountant, eventually going on to work in the telecommunications industry. He was an employee of Advanced Telecommunications Corporation when the company was acquired by WorldCom in 1992.

CFO of WorldCom

Scott Sullivan's rise through the ranks at WorldCom was remarkable. Within two years, he had become the company's chief financial officer. Sullivan developed a close relationship with WorldCom CEO Bernard Ebbers, and he helped Ebbers with the company's numerous acquisitions and mergers. The two were so tightly knit, in fact, that the organization was nicknamed "The Bernie and Scott Show," according to the Washington Post.

In 1997, Sullivan played a key role in WorldCom's acquisition of long distance giant MCI—a deal that helped make him one of the country's most high-profile CFOs. He was also one of the most well-paid in his field, earning more than $19 million in 1998, according to the Washington Post.

As a leading WorldCom executive, Sullivan divided his time between the company's Mississippi headquarters and a home in Florida, with him and his wife buying land in a private community in Boca Raton for $2 million to build their luxurious dream house—though they would never have a chance to see their dream come to fruition.

Caught in Accounting Fraud

Sullivan continued to rake in money over the next few years, bringing home roughly $45 million in stocks and bonuses, according to Forbes magazine. WorldCom, however, was not doing so well during this time: In 2000, the company's stock price experienced a decline. In an effort to bolster support from Wall Street, Sullivan began altering the reports of the company's finances. He and other WorldCom employees credited business expenses as capital investments—an accounting switch through which they were able to make the company look extremely profitable during a time that it was actually suffering losses.

In 2002, Sullivan's accounting fraud was discovered. He was fired that June, and was soon indicted on several counts of accounting fraud relating to his role in WorldCom's $11 billion financial collapse—the largest scandal of its kind in U.S. history—leading the company to file for bankruptcy in July 2002. Authorities considered Sullivan to be the mastermind behind the WorldCom accounting scheme.

As the date of his trial grew closer, in 2004, Sullivan pleaded guilty to the charges and agreed to help the prosecution with its case against former WorldCom CEO Bernard Ebbers. Sullivan testified at Ebbers's trial in 2005. During his court appearance, Sullivan acknowledged that he willingly deceived investors about the company's status. He also claimed that Ebbers had been fully aware of the accounting fraud. Ebbers received a 25-year prison sentence while Sullivan was given a five-year sentence for his crimes.

Sullivan served most of his sentence at the federal prison in Jessup, Georgia. In May 2009, he was released from custody—getting out one year early. Sullivan returned to Boca Raton, Florida, after his time in jail, according to the Palm Beach Post. For the next three years, he remained under what media outlets called a "supervised release." His co-conspirator, Ebbers, remains behind bars, serving his sentence at the Federal Correctional Institution in Oakland, Louisiana.

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