Spotlight Returns to New York Courts

Corporate crime moves back to centre stage in the US this week when two of the most infamous cases of recent years reach court.

In one of the most anticipated trials stemming from the scandals that struck corporate America in the wake of the dotcom collapse, Bernard Ebbers, the former WorldCom chief executive, is facing allegations that he orchestrated a massive accounting fraud.

In a neighbouring courtroom in downtown Manhattan, the former Tyco boss Dennis Kozlowski will be retried on allegations of looting the company. His first trial fell apart in extraordinary fashion when the jury deliberations broke down in acrimony.

WorldCom filed for the biggest bankruptcy in history when it went under in July 2002. A black hole discovered in the company's accounts eventually grew to $11bn (£5.8bn). The telecom company had grown aggressively and became known as one of the leading icons of the technology boom.

Federal prosecutors made little secret of their determination to bring charges against Mr Ebbers, who founded the company, finally issuing an indictment last summer.

Mr Ebbers has pleaded not guilty. At the trial, his lawyers are expected to argue that he left accounting decisions to his former finance chief, Scott Sullivan. Mr Sullivan, who has already pleaded guilty to fraud charges, is expected to be the prosecution's star witness in the trial.

Another four former WorldCom executives have also pleaded guilty to similar charges.

Mr Ebbers faces charges of fraud, conspiracy and making false regulatory filings, and could be jailed for up to 25 years if convicted.

The trial was originally set to take place in November but Mr Ebbers' legal team requested another two months to build their case.

Earlier this month, 10 former directors of WorldCom agreed to pay $18m out of their own pockets as part of a $56m settlement with investors in the company. Citigroup, which provided investment banking services to WorldCom, has paid $2.6bn to settle shareholder suits. The company has since renamed itself MCI and emerged from bankruptcy protection in April last year.

Mr Kozlowski and his co-defendant Mark Swartz, the former finance chief, are accused of stealing $600m from Tyco.

Although at heart a case of complex financial fraud, the first trial produced some entertaining moments. The prosecution introduced as evidence a video of a lavish Roman-themed birthday party thrown for Mr Kozlowski's wife and partly charged to the company. It included scantily clad models and an ice statue dispensing drinks.

Other evidence introduced of Mr Kozlowski's expensive taste included a $6,000 gold-threaded shower curtain and a $2,900 set of coat hangers for his New York apartment, again paid for by the company.