Former WorldCom CEO Bernard Ebbers has surrendered to federal authorities in New York. He is charged with being the maestro of a massive conspiracy to defraud at WorldCom. His indictment came within hours of testimony from Scott Sullivan, who was CFO during much of the period in question when WorldCom inflated its earnings, assets, and sales. When all was said and done, the fraud exceeded $11 billion, and WorldCom stock, once valued at close to $200 billion, evaporated.

Sullivan's testimony was considered key. He was indicted in the summer of 2002, along with several other financial officers at the company. All of the others -- Betty Vinson, Troy Norman, and Buford Yates -- pleaded guilty and said that the conspiracy to hide WorldCom's true performance started at the top levels of the company: Sullivan and Ebbers. Sullivan agreed to plead guilty to slightly reduced charges, and will spend as many as 25 years in prison. He's also compelled to disgorge all gains he received as part of the fraud.

If this last condition is applied to its fullest extent, we may finally see a fraud penalty worth something. I'm surely not the only investor who's sick to death of executives who are charged with or implicated in wrongdoings at their companies being able to keep vast amounts of ill-gotten wealth. If the penalty actually becomes "we're taking away all your money," then justice, finally, might be served in these cases.

When we find out that former Freddie Mac (NYSE:FRE) CEO Gregory Parseghian received more than $14 million in severance after he was removed for approving some accounting strategies that obscured the company's accounting, we have to wonder just what laws, rules, and principles executives have to break before they start to feel some real pain. There isn't much comparison between what happened at Freddie Mac and at WorldCom, but under what warped definition is causing years' worth of accounting restatements not "gross misconduct"? A simply appalling response to simply appalling conduct.

Back to Ebbers and WorldCom. Along with Enron, Tyco (NYSE:TYC), Cendant (NYSE:CD), and a few others, the WorldCom case has become symbolic of executives enriching themselves at the expense of their shareholders during the booming 1990s.

As we've seen with the Enron investigation, building a case against the top folks in corporate conspiracies is incredibly difficult. Just last month, Enron's Jeffrey Skilling finally saw the inside of a courtroom, following plea bargains late last year from former CFO Andrew Fastow. The kingpin in the Enron case, Ken Lay, has yet to be charged.

It's been just as difficult to build the WorldCom case. Even though everyone "knew" that Ebbers was fully aware of the wrongdoings, there was very little hard evidence upon which to try him. Sullivan, for his part, refused to implicate Ebbers. So investigators continued to build their case against Sullivan, and once they had enough evidence to convict him on the more serious charges, they convinced him to turn.

Sullivan's spent the last 18 months free on bond living in a house in Florida so opulent that it had a special storage room just for fur coats. I don't think that his next residence will have the same je ne sais quoi.

Bill Mann owns no companies mentioned in this story. Nor does he have a fur storage room. Come see what the buzz is about! Take a free trial of Mathew Emmert's Income Investor newsletter.