WorldCom Scandal (2002)
Company: Telecommunications company; now MCI, Inc.
What happened: Inflated assets by as much as $11 billion, leading to 30,000 lost jobs and $180 billion in losses for investors.
Main player: CEO Bernie Ebbers
How he did it: Underreported line costs by capitalizing rather than expensing and inflated revenues with fake accounting entries.
How he got caught: WorldCom's internal auditing department uncovered $3.8 billion of fraud.
Penalties: CFO was fired, controller resigned, and the company filed for bankruptcy. Ebbers sentenced to 25 years for fraud, conspiracy and filing false documents with regulators.
Fun fact: Within weeks of the scandal, Congress passed the Sarbanes-Oxley Act, introducing the most sweeping set of new business regulations since the 1930s.