James F

James F. Marshall, Esq. (SBN 126030)

JUDICIAL WATCH, INC.

2540 Huntington Drive, Suite 201

San Marino, CA 91108-2601

Telephone: (626) 287-4540

Facsimile: (626) 237-2003

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

HOWARD B. THOMPSON, individually and as the trustee of the Charlotte A. Thompson Irrevocable Trust; MARK ONTIVEROS; STAN W. CASTEEL; SHARON BRADY;

PAUL F. RINGHEISER, JR.; SANDRA RINGHEISER; PAUL REINGHEISER, III,

Plaintiffs,

LI KA-SHING; GARY K. WINNICK; LODWRICK M. COOK; JOHN M. SCANLON; DAVID L. LEE; DAN J. COHRS; JAMES C. GORTON; THOMAS J. CASEY; JOSEPH P. CLAYTON; DAVID A. WALSH; ABBOT L. BROWN; BARRY PORTER; JOSEPH P. PERRONE; ROBERT ANNUNZIATA; WILLIAM S. COHEN; ANDERSEN; ANDERSEN WORLDWIDE; ARTHUR ANDERSEN, LLP; TERRY MCAULIFFE; ANNE BINGAMAN; JEFF BINGAMAN; WILLIAM JEFFERSON CLINTON; and DOES 1-10, inclusive,

Defendants. ______________________________________

)

Civ. No.

COMPLAINT;

DEMAND FOR JURY TRIAL

Plaintiffs, by the undersigned counsel, aver on personal knowledge as to themselves and their own acts, and on information and belief (based on the investigation of their counsel) as to all other matters (as to which averments they believe that substantial evidentiary support will exist after a reasonable opportunity for further investigation and discovery) as follows:

NATURE OF THE ACTION

1. This action arises from the huge fraud against many of the shareholders of GCL, potential investors in securities issued by GCL, and the integrity of the securities market, and from other and related unlawful, unfair, and fraudulent acts and practices that were perpetrated by directors, officers, affiliated persons, and accountants of Global Crossing Ltd. (“GCL”), directly or indirectly, with the assistance of corrupt elected and appointed public officials.

2. GCL is not a defendant herein because GCL filed a Chapter 11 petition on or about January 28, 2002, in the U.S. Bankruptcy Court for the Southern District of New York, whereupon an automatic stay was imposed under 11 U.S.C. § 362. On information and belief, GCL is a foreign, Bermuda corporation with its principal executive offices located at 360 North Crescent Drive, Beverly Hills, or elsewhere in Los Angeles County, California. GCL is a public telecommunications company. In its first Annual Report for 1998, Defendant Gary K. Winnick, a GCL founder, described the company as follows: “We are building the world’s first seamless fiber optic network – connecting oceans, continents, and cities of the world and setting new world standards in bandwidth capacity, technology, and pricing. Global Crossing is creating a global information highway for use by all who live on the planet.”

JURISDICTION

3. Jurisdiction exists under 28 U.S.C. § 1332 because the parties are of diverse citizenship and the amount in controversy, including punitive and exemplary damages, exceeds $75,000.00, exclusive of interest and costs. On information and belief, punitive and exemplary damages are highly likely to be awarded in amounts over $75,000.00 due to the egregiousness of the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth in detail below.

VENUE

4. Venue is proper in this district under 28 U.S.C. § 1391(a)(2) because a substantial part of the events or omissions giving rise to the claims occurred here.

PLAINTIFFS

5. Plaintiff Howard B. Thompson (“THOMPSON”) is a citizen of and domiciled in Florida and at relevant times bought or sold GCL securities. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, THOMPSON seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages. THOMPSON brings this action individually and as trustee of the Charlotte A. Thompson Irrevocable Trust.

6. Plaintiff Mark Ontiveros (“ONTIVEROS”) is a citizen of and domiciled in Missouri and at relevant times bought or sold GCL securities. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, ONTIVEROS seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

7. Plaintiff Stan W. Casteel (“CASTEEL”) is a citizen of and domiciled in Missouri and at relevant times bought or sold GCL securities. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes below, CASTEEL seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

8. Plaintiff Sharon Brady (“BRADY”) is a citizen of and domiciled in Texas and at relevant times bought or sold GCL securities. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, BRADY seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

9. Plaintiff Paul F. Ringheiser, Jr. (“RINGHEISER JR.”) is a citizen of and domiciled in Pennsylvania and at relevant times bought or sold GCL securities. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, RINGHEISER JR. seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

10. Plaintiff Sandra Ringheiser (“S. RINGHEISER”) is a citizen of and domiciled in Pennsylvania, REINGHEISER JR.’s wife, and at relevant times bought or sold GCL securities jointly with RINGHEISER JR. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, S. RINGHEISER seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

11. Plaintiff Paul Ringheiser, III (“RINGHEISER III”) is a citizen of and domiciled in Pennsylvania, the son of RINGHEISER JR. and S. RINGHEISER, and at relevant times bought or sold GCL securities jointly with RINGHEISER JR. Due to the egregiously unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, RINGHEISER III seeks and expects to recover, in addition to compensatory damages, over $75,000.00 in punitive and exemplary damages.

DIRECTOR AND OFFICER DEFENDANTS

12. On information and belief, at all relevant times Defendant Li Ka-shing (“LI”) was and is a citizen of and domiciled in the People’s Republic of China and, more specifically, Hong Kong. On information and belief, LI is reported and suspected by the U.S. government and others to be an agent or other operative of the communist Chinese government and military. LI is sued herein as a direct or indirect participant, aider and abettor, and co-conspirator in certain unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

13. On information and belief, at all relevant times the entity known as Asia Global Crossing, Ltd. (“AGCL”) was and is a GCL affiliate, had and has directors and officers in common with GCL, shared and shares offices with GCL, and was and is owned, directly or indirectly, in part by GCL and certain directors and officers named below, and in part by LI and Hutchison Whampoa, Ltd., a foreign company owned or controlled by LI (“HUTCHISON”). On information and belief, as a result of LI’s great wealth and his ownership and control of HUTCHISON, at all relevant times LI was and is a de facto control person of AGCL and has close personal and business relationships with certain directors and officers named below.

14. On information and belief, at all relevant times Defendant Gary K. Winnick (“WINNICK”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, a founder, director, and co-chairman of the board of directors of GCL, and by far the most dominant owner and control person affiliated with GCL and its affiliated companies. On information and belief, WINNICK is the former business colleague of “junk bond king” and convicted felon Michael Milken. On information and belief, at relevant times WINNICK has been an officer, director, control person, and/or shareholder of AGCL. WINNICK is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

15. On information and belief, at all relevant times Defendant Lodwrick M. Cook (“COOK”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and a director and co-chairman of the board of directors of GCL. On information and belief, at relevant times COOK has been an officer, director, control person, and/or shareholder of AGCL. COOK is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

16. On information and belief, at all relevant times Defendant John M. Scanlon (“SCANLON”) was and is a citizen of and domiciled in California, a director of GCL, vice-chairman of the board of directors of GCL, or chief executive officer of GCL. On information and belief, at relevant times SCANLON has been an officer, director, control person, and/or shareholder of AGCL. SCANLON is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

17. On information and belief, at all relevant times Defendant David L. Lee (“LEE”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and a founder, director, the president, and/or chief executive officer of GCL. On information and belief, at relevant times LEE has been an officer, director, control person, and/or shareholder of AGCL. LEE is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

18. On information and belief, at all relevant times Defendant Dan J. Cohrs (“COHRS”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and the chief financial officer and senior vice president of GCL. On information and belief, at relevant times COHRS has been an officer, director, control person, or shareholder of AGCL. COHRS is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

19. On information and belief, at all relevant times Defendant James C. Gorton (“GORTON”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and the general counsel, corporate secretary, and a senior vice-president of GCL. On information and belief, at relevant times GORTON has been an officer, director, control person, or shareholder of AGCL. GORTON is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

20. On information and belief, at all relevant times Defendant Thomas J. Casey (“CASEY”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, an attorney with extensive experience in corporate and telecommunications law, and the vice-chairman of the board of directors or the managing director of GCL. On information and belief, CASEY used to be a partner in the Washington, DC office of Skadden, Arps, Slate, Meagher & Flom, LLP and the co-head of its telecommunications and media legal group. On information and belief, at relevant times CASEY has been an officer, director, control person, and/or shareholder of AGCL. CASEY is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

21. On information and belief, at all relevant times Defendant Joseph P. Clayton (“CLAYTON”) was and is a citizen of and domiciled in New York, a director of GCL, and the president and chief executive officer of Global Crossing North America – an affiliate of GCL controlled by GCL. On information and belief, at relevant times CLAYTON has been an officer, director, control person, and/or shareholder of AGCL. CLAYTON is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

22. On information and belief, at all relevant times Defendant David A. Walsh (“WALSH”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, the president and chief operating officer of GCL, and/or an executive vice president of GCL for marketing and sales. On information and belief, at relevant times WALSH has been an officer, director, control person, and/or shareholder of AGCL. WALSH is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

23. On information and belief, at all relevant times Defendant Abbot L. Brown (“BROWN”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and a founder, senior vice-president, and/or director of GCL. On information and belief, at relevant times BROWN has been an officer, director, control person, or shareholder of AGCL. BROWN is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

24. On information and belief, at all relevant times Defendant Barry Porter (“PORTER”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and a founder, senior vice-president for corporate development, or director of GCL. On information and belief, at relevant times PORTER has been an officer, director, control person, and/or shareholder of AGCL. PORTER is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

25. On information and belief, at all relevant times Defendant Joseph P. Perrone (“PERRONE”) was and is a citizen of and domiciled in New Jersey and a certified public accountant licensed in New York. On information and belief, before joining GCL’s senior management team, PERRONE was a partner in Arthur Andersen, LLP, Andersen, LLP, and/or Andersen Worldwide, and the chief audit partner for GCL engagements. On information and belief, on or about May 1, 2000, PERRONE joined GCL as senior vice-president for finance. On information and belief, in December 2000, PERRONE was promoted to executive vice-president for finance. On information and belief, at relevant times PERRONE has been an officer, director, control person, and/or shareholder of AGCL. PERRONE is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, in his capacities both as an Arthur Andersen certified public accountant/auditor and later as a member of GCL’s senior management.

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26. On information and belief, at all relevant times Defendant Robert Annunziata (“ANNUNZIATA”) was and is a citizen of and domiciled in California, a resident of Los Angeles County, and a chief executive officer or director of GCL. On information and belief, at relevant times ANNUNZIATA has been an officer, director, control person, and/or shareholder of AGCL. ANNUNZIATA is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

27. On information and belief, at all relevant times William S. Cohen (“COHEN”) was and is a citizen of and domiciled in Washington, D.C. On information and belief, COHEN was the United States Secretary of Defense from 1997 to 2001, and was a director of GCL and AGCL at relevant times from April 2001 to a date currently unknown. On information and belief, COHEN founded The Cohen Group in 2001 and at all times since then has been and is its owner, chairman, and chief executive officer. On information and belief, as set forth fully below, COHEN joined himself to the agreement, combination, and conspiracy among the Director and Officer Defendants by inter alia participating in, aiding and abetting, substantially assisting, and/or otherwise furthering (a) the conspiracy to “pump and dump” GCL stock; (b) the conspiracy to corrupt public officials into ignoring the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below; and/or (c) the conspiracy to corrupt government and Pentagon officials into awarding GCL or its affiliates a sensitive U.S. military contract worth approximately $450 million (the “Contract”) despite obvious national security problems in the possible transfer of sensitive technology and information as well as unauthorized access to a sensitive U.S. military telecommunications network (the “Network”) to foreign entities and foreign individuals (including inter alia LI, HUTCHISON, AGCL, and/or K1 Ventures Ltd. (“K1")). COHEN is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

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28. Defendants LI, WINNICK, COOK, SCANLON, LEE, COHRS, GORTON, CASEY, CLAYTON, WALSH, BROWN, PORTER, PERRONE, ANNUNZIATA, and COHEN are collectively called the “Director and Officer Defendants” below.

29. On information and belief, starting on a date currently unknown, GCL began to suffer a slowdown in revenues and cash generation. On information and belief, the Director and Officer Defendants were very concerned about the expectations of the financial analysts that covered GCL, and the culture within GCL and among the Director and Officer Defendants was such that meeting or exceeding such expectations was one of GCL’s highest priorities. On information and belief, intense pressure to meet or exceed the expectations of financial analysts was exerted by the Director and Officer Defendants, especially WINNICK. On information and belief, the Director and Officer Defendants were especially concerned that if GCL did not meet or exceed such expectations, its stock price would fall and the Director and Officer Defendants’ personal holdings of GCL stock, stock options, related rights, and/or other forms of executive compensation would be devalued or reduced. Moreover, on information and belief, the Director and Officer Defendants were concerned that the value of their GCL stock, stock options, related rights, and/or other executive compensation would be detrimentally impacted if GCL violated financial covenants with its banks, and the Director and Officer Defendants knew or suspected that if GCL’s financial statements accurately reflected its financial condition, then GCL would be in danger of violating its financial covenants. Based in part on the pressures caused by these concerns, the Officer and Director defendants embarked on a scheme to artificially inflate and enhance the price of GCL stock by misrepresenting GCL’s performance and financial condition.

30. On information and belief, on dates currently unknown, as a result inter alia of the foregoing corporate culture of GCL and the pressures on and the self-interests of the Director and Officer Defendants, the Director and Officer Defendants secretly entered into an agreement, combination, and conspiracy with each other and the other defendants to commit, aid, abet, participate in, conceal, and further the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below, with the intent to mislead GCL shareholders, potential investors, and the securities market as to GCL’s true financial condition, all for the purpose of artificially inflating and enhancing the market price of GCL’s stock and enriching themselves.

31. On information and belief, on dates currently unknown, as a result inter alia of the foregoing corporate culture of GCL and the pressures on and self-interest of the Director and Officer Defendants, the Director and Officer Defendants secretly entered into an agreement, combination, and conspiracy with each other and the other defendants to secure the Contract through contributions, gratuities, and lucrative job offers to elected and appointed government and Pentagon officials, with the intent to increase GCL’s income and enrich themselves.

32. On information and belief, on dates currently unknown, as a result inter alia of the foregoing corporate culture of GCL and the pressures on and self-interests of the Director and Officer Defendants, the Director and Officer Defendants secretly entered into an agreement, combination, and conspiracy with each other to enrich themselves from the sale of GCL, key affiliates or business lines, or key assets, after the inevitable collapse of GCL upon discovery of the massive ongoing financial fraud, to foreign business entities in which WINNICK and LI and other Director and Officer Defendants had secretly or otherwise acquired, directly or indirectly, equity or creditor interests. On information and belief, these foreign entities include inter alia HUTCHISON, AGCL, K1, and/or other foreign entities currently unknown, which are affiliates of each other, WINNICK, and LI, and under substantially common ownership and control.

ACCOUNTANT DEFENDANTS

33. On information and belief, Defendant Andersen is a citizen of Illinois and either a partnership or other type of unincorporated association consisting of member firms within “the Andersen global client service network.” On information and belief, Andersen promotes itself as a single, integrated, full-service, professional business enterprise comprising “one firm” with “one voice” and a “shared heritage and common values and vision.” On information and belief, Anderson does business and is found in Los Angeles County, California, and is one of the most sophisticated international accounting, auditing, financial, and management consulting firms in the United States and the world, with expertise in all areas of GCL’s business. Before GCL’s recent bankruptcy and the Enron debacle, Andersen enjoyed an excellent reputation; Andersen’s involvement with auditing, SEC filings, and securities offerings bestowed the imprimatur of legitimacy, confidence, and stability on its many clients, including GCL and Enron. Andersen is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below. Plaintiffs will seek leave of court to amend this pleading to name constituent members of Andersen after discovery into the exact nature of Andersen, its members, alter ego issues, and sham transaction issues.

34. On information and belief, Defendant Andersen Worldwide is a citizen of Illinois and either a corporation, partnership, or other unincorporated association comprised of member firms in “the Andersen global client service network.” On information and belief, Andersen Worldwide promotes itself as a single, integrated, full-service, professional business enterprise comprising “one firm” with “one voice” and a “shared heritage and common values and vision.” On information and belief, Anderson Worldwide does business and is found in Los Angeles County, California, and is one of the most sophisticated international accounting, auditing, financial, and management consulting firms in the United States and the world, with expertise in all areas of GCL’s business. Before GCL’s recent bankruptcy and the Enron debacle, Andersen Worldwide enjoyed an excellent reputation; Andersen Worldwide’s involvement with auditing, SEC filings, and securities offerings bestowed the imprimatur of legitimacy, confidence, and stability on its clients, including inter alia GCL and Enron. Andersen Worldwide is sued as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below. Plaintiffs will seek leave of court to amend this pleading to name constituent members of Andersen Worldwide after discovery into the nature of Andersen Worldwide, its members, alter ego issues, and sham transaction issues.

35. On information and belief, Defendant Arthur Anderson, LLP is a citizen of Illinois, a limited liability partnership, and a member of “the Andersen global client service network,” does business and is found in Los Angeles County, California, and is one of the most sophisticated international accounting, auditing, financial, and management consulting firms in the United States and the world, with expertise in all areas of GCL’s business. On information and belief, Andersen Worldwide describes and promotes itself as a single, integrated, full-service, professional business enterprise comprising “one firm” with “one voice” and a “shared heritage and common values and vision.” Before GCL’s recent bankruptcy and the Enron debacle, Arthur Andersen, LLP enjoyed an excellent reputation; Arthur Andersen, LLP’s involvement with auditing, SEC filings, and securities offerings bestowed the imprimatur of legitimacy, confidence, and stability on its clients, including GCL and Enron. Arthur Andersen, LLP is sued herein as a direct participant, aider and abettor, and co-conspirator in the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

36. On information and belief, Andersen, Andersen Worldwide, and Arthur Andersen, LLP are alter egos of each other in that they now and at all relevant times (a) held themselves out to the public as a single, integrated, full-service, professional business enterprise comprising “one firm” with “one voice” and a “shared heritage and common values and vision”; (b) totally dominated and controlled each other’s assets, operations, policies, procedures, strategies, and tactics; (c) failed to observe corporate formalities; and (d) used and commingled the assets, facilities, employees, and business opportunities of each other, as if those assets, facilities, employees, and business opportunities were their own – all to such an extent that any adherence to the fiction of the separate legal existence of such defendants distinct from each other would be inequitable, would permit egregious wrongdoers to abuse a corporate, limited liability partnership, and/or similar privilege of limited liability, if any, and would promote injustice by allowing these defendants to evade liability or veil assets that should be attachable.

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37. For convenience, given the foregoing relationships, Defendants Andersen, Andersen Worldwide, and Arthur Andersen, LLP are collectively called “AA” below.

38. On information and belief, on dates and during a period that is currently unknown, AA made strategic business decisions to transform itself from a traditional, independent, and objective accounting and auditing firm, with acknowledged responsibilities to the public, into a aggressive, pro-active, pro-client, advisory firm committed to promoting client success through value creation. On information and belief, AA’s model of client success through value creation was stated by three AA partners, on behalf of AA, in Cracking the Value Code: How Successful Businesses Are Creating Wealth in the New Economy (2000), and summarized as follows:

Value creation – that is, future value captured in the form of increased market capitalization – is how successful businesses are creating value in the New Economy....

In the pages that follow, you will find a new set of tools that we have developed to help you create value in the New Economy [i.e. increased market capitalization]. It is called Value Dynamics, and it is based, in part, on an intensive three-year, 10,000-company research project by professionals at Arthur Andersen.

39. On information and belief, on or about January 10, 2001, AA appointed Joseph F. Berardino to be its chief executive officer. In a press release announcing his appointment, AA described its collective “Cracking the Value Code” vision as follows:

Arthur Andersen’s vision is to be the partner for success in the new economy. The firm helps clients find new ways to create, manage and measure value in the rapidly changing global economy. With world-class skills in assurance, tax, consulting and corporate finance, Arthur Andersen has more than 77,000 people in 84 countries who are united by a single worldwide operating structure that fosters inventiveness, knowledge sharing and a focus on client success.

40. On information and belief, the unlawful, unfair, and fraudulent acts, omissions, and schemes of the Director and Officer Defendants artificially to inflate and enhance the price of GCL’s stock was substantially the result of AA’s aggressive, pro-active, pro-client business strategy and management-consulting philosophy of fostering “inventiveness” and promoting client success through value creation as measured by increased market capitalization. On information and belief, if AA had performed the more traditional roles of independent and objective accountant and auditor, then the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below would not have occurred or would have been exposed much earlier.

41. On information and belief, PERRONE was AA’s chief audit partner for GCL from 1997 until about May 1, 2000, when he joined GCL in a senior financial management position. The GCL press release announcing PERRONE’s move to GCL stated in part:

Joe Perrone has been in charge of our [GCL’s] relationship with Arthur Andersen since before our IPO. He has a financial understanding of our company and our industry which is second to none. Joe is a recognized leader in communications, financial reporting, and accounting. He will help us quickly install the financial reporting and administrative controls necessary for the most exciting company in telecommunications to be the best run company in its industry.

42. At the present time, Plaintiffs do not know the name of the new AA audit partner who took over as AA’s chief audit partner for GCL when PERRONE left AA to join GCL in or about May 2000. Plaintiffs refer to said unknown person as Defendant Doe 1. Plaintiffs will seek leave of court to amend this pleading to allege the exact name and capacity of said fictitiously named defendant when that information will have been ascertained.

43. Defendants AA and Doe 1 are collectively identified as the “Accountant Defendants” below. PERRONE is listed among the Director and Officer Defendants supra because he joined their conspiracy and is a member of GCL’s senior management team.

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44. On information and belief, at all relevant times an extremely close relationship has existed between the Accountant Defendants, on the one hand, and GCL and the Director and Officer Defendants, on the other, at a business level and/or on a personal and social level. On the business level, on information and belief, this very close relationship resulted in inter alia GCL’s recruitment, employment, and promotion of PERRONE. Moreover, on information and belief, GCL engaged the Accountant Defendants repeatedly or continuously to provide “independent” accounting services, audits, financial and management-consulting services, tax services, examination and review of SEC filings, and reviews of financial statements included in SEC filings, including audited and unaudited information, and GCL’s annual reports. On information and belief, at all relevant times the Accountant Defendants performed the foregoing myriad of services consistently with AA’s overriding vision of finding new ways to create, manage, and measure value, with a strong emphasis on fostering inventiveness and promoting client success. On information and belief, as a result of AA’s aggressive pro-client vision, at all relevant times conflicts of interest existed (a) between AA and GCL; (b) between the different internal service divisions of AA; and (c) among members, partners, and principals of AA. On information and belief, the Accountant Defendants knowingly and wilfully failed and refused to eliminate their manifold and obvious conflicts of interest because of multi-million dollar audit, accounting, tax, financial, management-consulting, or other fees which AA and its members, partners, and principals bent over backwards to keep. On information and belief, at all relevant times the Accountant Defendants abandoned their independence and objectivity in dealing with GCL and the Director and Officer Defendants and allowed themselves to become actively involved in the adoption and use of “hollow swap” and “roundtripping” transactions and materially false, incomplete, misleading, and fraudulent reporting and disclosure thereof.

45. On information and belief, by reason of their services to GCL, the Accountant Defendants were in constant or frequent contact with GCL and Director and Officer Defendants and had continuous or frequent access to and detailed knowledge of GCL’s corporate, business, and financial information, including inter alia all material facts about the “hollow swap” and “roundtripping” transactions and the materially false, incomplete, misleading, and fraudulent reporting and disclosure thereof, all of which is central to the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below.

46. On information and belief, while the Accountant Defendants were engaged by GCL and providing accounting, auditing, financial, management-consulting, and other services bearing on GCL’s “hollow swap” and “roundtripping” transactions with other businesses in the telecommunication industry, AA was engaged by and provided similar services to one or more of the other parties to the same transactions, including inter alia Qwest and/or Emergia, 360 Networks, ChinaNet.com, Epik, Velocita, Flag Telecom, Telecom New Zealand, Nortel, Techtel, Versatel, Dacom, or others that are currently unknown. On information and belief, the Accountant Defendants counseled or approved inconsistent accounting and reporting of the same or substantially equivalent transactions based largely on how the treatment that was used for each client would affect that client’s securities prices and total market capitalization.

47. On information and belief, as a result of (a) the Accountant Defendants’ expertise (b) their extensive and diverse services to GCL, (c) their close working relationship with GCL, (d) their constant or frequent interaction with GCL, (e) their detailed knowledge of and constant or frequent access to relevant records and information, (f) PERRONE’s personal involvement on both sides of the AA-GCL relationship, (g) the Accountant Defendants’ many conflicts of interest, (h) their knowing and wilful failure and refusal to eliminate their many conflicts of interest, and (i) AA’s position on both sides of certain “hollow swap” and “roundtripping” transactions, at all relevant times the Accountant Defendants knew or recklessly failed and refused to learn that they were direct participants, aiders and abettors, and co-conspirators in a massive scheme to mislead and defraud GCL’s shareholders, potential investors, and the securities market as to inter alia GCL’s financial position and the value of its stock.

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48. On information and belief, the Accountant Defendants received multi-million dollar accounting, audit, financial, management consulting, tax, and advisory fees from GCL before the GCL bankruptcy and, in order to continue such fees, did knowingly or recklessly compromise themselves to the point of being direct participants, aiders and abettors, and co-conspirators in a massive scheme to mislead and defraud shareholders, potential investors, and the securities market as to inter alia GCL’s financial position and the value of its stock.

49. On information and belief, on dates that are currently unknown, the Accountant Defendants secretly entered into an agreement, combination, and conspiracy with the Director and Officer Defendants to commit, aid, abet, participate in, and further the unlawful, unfair, and fraudulent acts, omissions, and schemes set forth below – i.e. the conspiracy artificially to inflate and enhance GCL’s income and the market price of GCL’s stock – with the intent to keep GCL as a client and continue reaping multi-million dollar fees for years to come.

CORRUPT OFFICIALS

50. On information and belief, Defendant Terry McAuliffe (“MCAULIFFE”) is a citizen of and domiciled in Virginia. On information and belief, MCAULIFFE was formerly the chief fundraiser for former President William Jefferson Clinton (“CLINTON”) and was intimately involved in fundraising scandals that plagued the CLINTON administration. On information and belief, MCAULIFFE is currently the chairman of the Democrat National Committee (“DNC”). On information and belief, as CLINTON’s chief fundraiser and as DNC chairman, at all relevant times MCAULIFFE was and is well-positioned to control, direct, and distribute campaign financing, contributions, favors, “walking around” money, political payoffs, or gratuities, to exert tremendous de facto influence over the Democrat Party and its elected and appointed Democrat officials at the state and federal levels, and to help donors, contributors, and others to procure special access to elected and appointed Democrat government officials and favora