Capitalized Lies: The Eleven-Billion Dollar WorldCom Fraud. Line Costs, Hubris, and the Unprecedented Accounting Deception in American Telecommunications, 2002

What happens when the CEO of the world's largest telecommunications company decides that reality is no longer acceptable, and simply orders his accountants to magically erase billions of dollars in losses? The WorldCom scandal of 2002 exposed an $11 billion fraud that actually dwarfed the infamous collapse of Enron. Under the aggressive leadership of Bernard Ebbers, WorldCom expanded ruthlessly during the dot-com boom.
When the market cooled and revenues plummeted, Ebbers refused to admit defeat. Instead of reporting massive operating expenses (specifically the fees paid to lease other companies' network lines), WorldCom's accountants illegally classified them as long-term capital investments. This blatant, elementary accounting trick instantly turned billions of dollars of bleeding losses into phantom profits, keeping the stock price artificially inflated while the company rotted from the inside out. This rigorous financial autopsy dissects the arrogance of the telecom era.
It explores the heroic persistence of internal auditor Cynthia Cooper, the complete complicity of the Arthur Andersen accounting firm, and the devastating bankruptcy that wiped out thousands of pensions. Look behind the polished quarterly reports. The WorldCom disaster proves that the most devastating corporate crimes are often executed with nothing more than a spreadsheet and a terrifying level of executive hubris.