Convicted ex-WorldCom CEO Ebbers wins early prison release because of poor health

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By Jonathan Stempel

NEW YORK (Reuters) - A federal judge on Wednesday ordered the early release from prison of Bernard Ebbers, the former WorldCom Inc chief executive convicted in one of the country's largest accounting scandals, because of his deteriorating health.

Ebbers, 78, has served about 13-1/4 years of his 25-year prison term for orchestrating an $11 billion fraud that led to his now-defunct telecommunications company's 2002 bankruptcy, at the time the largest Chapter 11 case in U.S. history.

He had not been eligible for release until July 2028, but the decision by U.S. District Judge Valerie Caproni in Manhattan means he will be freed sooner.

Ebbers was convicted in March 2005 on securities fraud and other charges. A federal appeals court upheld the conviction the following year.

Caproni's decision was confirmed by one of Ebbers' lawyers, Graham Carner, and by the office of U.S. Attorney Geoffrey Berman in Manhattan, which opposed Ebbers' early release. A spokesman for Berman declined to comment on the decision.

In a Sept. 5 court filing, Ebbers' lawyers said their client was legally blind, suffered from a heart ailment and anemia, had lost 40 pounds (18 kg) in a little over a year, and had become incapable of walking regularly for exercise.

They sought "compassionate release" under the First Step Act, a bipartisan law signed last December that lets some older prisoners obtain freedom sooner.

Prosecutors countered that Ebbers did not show that his medical conditions substantially reduced his ability to care for himself. They also said his conditions were being "well-managed" by the Federal Bureau of Prisons.

Ebbers' request drew support from his trial judge, Barbara Jones, who is now in private practice.

In a Sept. 3 letter to the Manhattan court, Jones said that while Ebbers had "inflicted substantial harm on many good people," releasing him now would show compassion.

"Given his serious health problems, Mr. Ebbers has been punished enough," Jones wrote.

A one-time milkman who became known as an exacting, cost- obsessed boss, Ebbers transformed Clinton, Mississippi-based WorldCom into one of the biggest U.S. phone companies through a string of takeovers.

WorldCom filed for bankruptcy in July 2002. It emerged from Chapter 11 in April 2004 as MCI Inc, which was later acquired by Verizon Communications Inc.

The case is U.S. v. Ebbers, U.S. District Court, Southern District of New York, No. 02-cr-01144.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)

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