In 2005 Bernard Ebbers was sentenced to 25 years in prison for his role in $11 billion fraud (STAN HONDA)

NEW YORK (AFP) – Bernard Ebbers, the ex-WorldCom chief executive who was jailed after overseeing an $11 billion accounting fraud, has died, US media reported Sunday. He was 78.

Ebbers, a religious man dubbed the “Telecom cowboy” during his heyday, turned a sleepy Mississippi firm into a US telecoms giant.

Deal after deal made him a darling of Wall Street before his success was exposed as a huge illusion.

His family confirmed his death in a statement reported by local media, stating they were “thankful for the time that we had to be with and care for Dad in his final days”.

In 2005 Ebbers was sentenced to 25 years in prison for his role in the $11 billion fraud — one of the largest in US history — that led to the collapse of his WorldCom empire in 2002.

In December last year, he was released early due to his poor health, having served roughly 13 years of his sentence.

– ‘Gods plan’ –

Born in Edmonton, Canada on August 27, 1941, Ebbers’ family moved south when he was a child. His father John became a business manager for a Christian mission on a Navajo reservation in New Mexico.

Ebbers, a moderately good basketballer but only an average student, twice dropped out of university before giving school a final try at Mississippi College.

He graduated in 1966 and the following year married a Mississippi girl, Linda Piggott, and made the US South his home.

He worked as a basketball coach and teacher in a small town, then quit to work at a clothes factory where he became the warehouse manager.

Ebbers’ fortunes changed when in 1974 he bought a motel, creating a small chain that he used to launch his telecommunications career.

He took over local long-distance reseller LDDS and throughout the late 1980s and 1990s merged with or bought dozens of rivals.

As the AT and T monopoly was dismantled, Ebbers bought up spare telephone time and repackaged it at bargain prices.

By 1995, Ebbers had become a major player, paying $1.2 billion for WilTel Network Services. He changed the group’s name to WorldCom.

In 1996, Ebbers paid $14 billion for MFS Communications and in 1998 spent $37 billion on MCI.

“I believe God has a plan for people’s lives, and I believe he had a plan for me,” Ebbers once said.

By mid-1999, WorldCom reached its all-time high of $64.50 a share. Forbes magazine listed Ebbers’ fortune at an estimated $1.4 billion.

– An American symbol –

In 2000 then-president Bill Clinton gave a speech at WorldCom offices, saying: “I came here today because you are the symbol of 21st century America. You are the embodiment of what I want for the future.”

But success changed Ebbers: the local church patriarch divorced his wife, and embarked on a dramatic spending spree.

He also bought a yacht, and the 200,000 hectare (500,000 acre) Douglas Lake Ranch in British Columbia, the largest working ranch in Canada.

In 2001, Ebbers tried to buy Sprint, a larger rival, but was halted by regulators as wider concerns about WorldCom’s huge debt began to emerge.

WorldCom made drastic efforts to cut costs — including sacking thousands of staff and merging business units — but it could not generate enough income to keep creditors at bay.

Ebbers resigned in April 2002 after admitting borrowing money from the firm to cover losses he incurred in buying its shares.

Later the same year, WorldCom went bankrupt. 

Shareholders lost about $180 billion and 20,000 workers lost their jobs. 

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.