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Telecom Giant Admits Hiding $3.8 Billion In Expenses

Finance & Business

On June 25, 2002 telecom giant WorldCom released a statement showing that an internal audit had uncovered over 3.8 billion dollars in improperly reported and expenses for 2001 and Q1 2002. Expenses had been inappropriately reported and capitol expenditures. In the announcement WorldCom said it had terminated Scott Sullivan as chief financial officer and had also accepted the resignation of David Myers as senior vice president and controller.

The hidden expenses now show the profitable company to have actually been loosing billions of dollars. The disclosures, amounting to the largest case of fraudulent accounting in U.S. history, has seen the company's stocks loose 58% of its value. In an effort to save the company 17,000 jobs will be cut and assets will be sold in an effort to save $2 billion in cash expenditures.

Posted:  2002-06-26  8:44:28 AM

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