The two men shared their discovery with Ms. Vinson and they all agreed that they had had enough, say two people familiar with their decision. Ms. Vinson vowed to begin looking for a new job, says the person close to her. Mr. Yates decided to launch a job search as well and Mr. Normand decided to quit but ask for a severance package, according to internal documents and one of the people close to Mr. Yates.

They made another pact as well: They would refuse to make any more improper accounting entries. Over the next few days, each of them met with Mr. Myers to tell him of their plans and their decision to make no more transfers.

In March, the SEC made a request for information from WorldCom because it was suspicious about the company's good financial results. The company's head of internal auditing, Cynthia Cooper, started asking Mr. Myers and others about certain accounting decisions, and the entries made by Ms. Vinson and Mr. Normand.

On the afternoon of June 17, Ms. Cooper and Glyn Smith, another auditor, walked into Ms. Vinson's office and asked her to justify the transfers. Ms. Vinson said she couldn't, and told them that the amounts were provided to her by Mr. Yates and Mr. Myers. She suggested that Ms. Cooper talk to them, according to internal documents released by Congress. Moments later, Ms. Cooper and Mr. Smith were in Mr. Yates's office asking the same questions. He sent them to see Mr. Myers, according to the documents.

Ms. Vinson, Mr. Yates and Mr. Normand were in a panic, say people familiar with the situation. Mr. Yates called the other two into his office and suggested they all meet with Mr. Hollomon, the lawyer he had been referred to, according to a person close to Mr. Yates. On Thursday, June 20, at Mr. Hollomon's downtown office, they agreed on a plan: They would meet with regulators and prosecutors, tell them everything and hope for leniency. The three each contributed $10,000 to retain Mr. Hollomon.

Mr. Hollomon had the three accountants sign a so-called proffer agreement with prosecutors, stating what the three were willing to tell them. Although there was no written agreement that they wouldn't be prosecuted, several lawyers involved say the Mississippi U.S. attorney's office had told Mr. Hollomon that the accountants would likely be viewed as witnesses, not targets of the probe.

But Mr. Hollomon warned his clients that "all bets were off" if the case was moved to the Manhattan U.S. attorney's office, which has a long history of aggressively prosecuting high-profile business cases. The Mississippi office often emphasizes gaining cooperation from witnesses rather than targeting them for prosecution, according to several lawyers.

On Monday afternoon, Mr. Yates, Mr. Normand and Ms. Vinson left their offices one at a time and drove to a Courtyard Marriott in Jackson. They told their story to an official from the SEC, an FBI agent and an assistant U.S. attorney.

WorldCom's problems were about to explode into public view. On June 25, the day after the meetings at the Marriott, the SEC got a call from WorldCom's lawyers with a shocking disclosure: Ms. Cooper and her fellow auditors had found $3.8 billion in fraudulent accounting entries. The following day, the SEC charged the company with accounting fraud.

Though the Mississippi U.S. attorney's office had initially taken the lead on the case, the U.S. attorney's office in Manhattan began to play a more dominant role. Soon, Mr. Hollomon's fears were realized. In July, after a turf war with Mississippi, the Justice Department granted jurisdiction to the Manhattan U.S. attorney's office and it quickly became clear that the New York prosecutors had a different take on the accountants.

Mississippi U.S. Attorney Dunn Lampton said he was "disappointed" he didn't remain involved. He wouldn't discuss his initial plans for the case."Deciding who to prosecute is one of the toughest decisions a prosecutor faces," he says.

Soon, Ms. Vinson's hopes that she would continue to be viewed as a witness were dashed. On a flight to Mississippi after an interview with prosecutors in New York, Mr. Hollomon told Ms. Vinson that he was concerned that they were focusing on the fact that she had made her own decisions about which capital expense accounts she transferred the line costs into. He thought prosecutors might draw the conclusion that she hadn't simply been following orders.

Mr. Hollomon told her that Mr. Myers was cooperating with prosecutors, who now suspected that Ms. Vinson and the other accountants from the beginning had been instrumental to making the scheme work, according the person close to Ms. Vinson.

On Aug. 1, Ms. Vinson received a call from Mr. Hollomon telling her that the prosecutors in New York would probably indict her. In the end, they viewed the information Ms. Vinson had supplied at the Courtyard Marriott as more of a confession than a tip-off to wrongdoing, people familiar with the cse say.

Crying, she called her husband, who was on a business trip, and reached him at the airport in Atlanta to tell him that charges against her were imminent. Within hours, she was fired because of the expected indictment. The only thing she was allowed to take with her was a plant from her desk.

On Aug. 28, Mr. Sullivan and Mr. Yates were indicted, and Ms. Vinson and Mr. Normand were named as unindicted co-conspirators in the scheme. Mr. Myers pleaded guilty to three felony counts and Mr. Yates soon pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud.

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