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INTEL
PIG BUTCHERING: now the #1 loss category in the US by estimated volume / HUSHPUPPI: the Instagram that became the evidence -- Case 001 open / BEC: one spoofed email, one wire, seven figures -- see the methodology / ROSS ULBRICHT: full pardon January 21 2025 after 11+ years -- Case 013 open / ALL FIGURES LABELED: estimate vs conviction vs market collapse -- see Methodology / UNODC 2023: $5.4B estimated annually from SE Asia pig-butchering compounds [UNVERIFIED] / PIG BUTCHERING: now the #1 loss category in the US by estimated volume / HUSHPUPPI: the Instagram that became the evidence -- Case 001 open / BEC: one spoofed email, one wire, seven figures -- see the methodology / ROSS ULBRICHT: full pardon January 21 2025 after 11+ years -- Case 013 open / ALL FIGURES LABELED: estimate vs conviction vs market collapse -- see Methodology / UNODC 2023: $5.4B estimated annually from SE Asia pig-butchering compounds [UNVERIFIED]
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COMPANY · COMPANY

WorldCom (MCI WorldCom)

🇺🇸 Clinton, Mississippi, United States · FOUNDED 1983-09
THE FIGURE
~$11B
Costs WorldCom hid to look profitable (accounting fraud), not money taken in cash.
WHAT IT SAID IT WAS

America's second-largest long-distance carrier, built by acquisition from a Mississippi reseller (LDDS) and worth about $180B at its 1999 peak.

WHAT IT REALLY WAS

A company that, when growth stalled, booked about $11B of ordinary running costs as capital investment so it could keep reporting profits.

THE STORY

LDDS was formed in Hattiesburg, Mississippi, in September 1983 and Bernie Ebbers became its CEO in 1985; a string of takeovers, capped by the $37 billion purchase of MCI in 1998, made WorldCom the second-biggest US long-distance carrier. From 2000 it released reserves and from 2001 booked line costs as capital spending, hiding about $11 billion of expenses. Ebbers resigned in April 2002; on 25 June the company disclosed $3.8 billion of improper accounting and on 21 July filed for Chapter 11 with $107 billion of assets. It settled with the SEC for $750 million in value, emerged as MCI in April 2004 and was bought by Verizon in January 2006. Ebbers was convicted in 2005 and sentenced to 25 years.

WHO RAN IT
Bernard Ebbers ▸
CEO 1985–2002 · open the case file
Scott Sullivan
CFO — pleaded guilty March 2004; testified against Ebbers; 5 years (2005)
WHO WAS HURT
WorldCom shareholders and bondholders~30,000 employees who lost jobs and retirement savings
HOW IT ENDED
Founded
1983-09
Based
Clinton, Mississippi, United States
Ended
2002-07-21
How
bankruptcy — Chapter 11 filed 21 July 2002 (then the largest ever); emerged as MCI Inc. in April 2004; bought by Verizon in January 2006

SEC civil penalty judgment nominally $2.25B, satisfied by $500M cash plus $250M in new stock (~$750M, 2003) — the largest SEC penalty against a company at the time. Investor class action settled for over $6.1B, including $2.6B from Citigroup and $2B from JPMorgan (2004–05).

SOURCES
sec.gov/Archives/edgar/data/0000723527/000093176303001707/dex991.htmdfarq.homeip.net/the-mci-worldcom-merger-bankruptcy-and-scandal/
Facts as published in court records, regulator releases and the sources above. Anyone charged and not convicted is alleged only.
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