When the order landed on Ms. Vinson’s lap she felt trapped, the person close to her says. Threatening again to resign wasn’t going to help. And she was still reluctant to quit without another job. She and Mr. Normand met with Mr. Yates in his immaculate office to talk about their concerns, but nothing was resolved, according to a person close to Mr. Yates.
That night Ms. Vinson reviewed her options with her husband, the person close to her says. She decided to put together a resume and begin looking for a job. She didn’t think about retaining a lawyer or talking to the SEC, says this person. She hadn’t really started to think about the ramifications of her actions.
At WorldCom, the wheels were already in motion to transfer the line costs. Ms. Vinson reluctantly went along. It fell to her, Mr. Normand and Mr. Yates to figure out into which of five capital accounts they should transfer the costs. As they considered the options, Mr. Myers walked into Ms. Vinson’s office and the group commiserated about how unhappy they were about the transfers. Still, they agreed they had to keep bailing water for the time being, according to a person familiar with the conversation.
Ms. Vinson then made the entries transferring the $771 million, backdating the entries to February by changing the dates in the computer for the quarter, according to court and SEC documents.
Ms. Vinson faced the same dilemma in the second, third and fourth quarters of 2001. Each quarter she, Mr. Yates and Mr. Normand scraped together small amounts of liabilities that legitimately could be lowered for the quarter, hoping that they wouldn’t be required to make a large questionable adjustment. But each quarter they found themselves in the same uncomfortable spot, and wound up making giant and fraudulent entries. In the second quarter, they transferred $560 million to the capital accounts. In the third quarter it was $743 million, and in the fourth quarter it was $941 million.
Ms. Vinson began waking up in the middle of the night, unable to go back to sleep because of her anxiety, says the person close to her. Her family and friends began to notice she was losing weight and her face took on a slightly gaunt look. At work she withdrew from co-workers, afraid she might let something slip, says the person close to her.
In early 2002, she received a promotion, from senior manager to director, along with a raise that brought her annual salary to about $80,000, according to a former WorldCom staffer.
Meanwhile, she and her two co-workers were increasingly distraught. Mr. Yates decided to look for a lawyer, according to a person close to him. Through a cousin, he got the name of Joseph Hollomon of Jackson, a former federal prosecutor in Mississippi. Mr. Yates met with Mr. Hollomon, but unsure of what to do, didn’t retain him immediately.