Former Worldcom boss Bernie Ebbers, found guilty of fraud and conspiracy in connection with the firm's demise, has given up most of his assets in a deal.
Mr Ebbers could face the rest of his life in prison
He will surrender the majority of his cash, his home and other assets in a settlement with legal authorities and investors in the bankrupted firm.
The 63-year-old, who was also found guilty of seven counts of filing false documents, could face life in jail.
Mr Ebbers, due to be sentenced in two weeks, will initially pay $5m (£2.8m).
Cash and assets
The deal was announced by New York State comptroller Alan Hevesi and US prosecutors.
In addition to the $5m in cash, between $25m and $40m should be recovered, depending on the value of Mr Ebbers' assets.
As well as the Ebbers mansion in Clinton, Mississippi, other assets include a golf course, a lumber mill, and a grain elevator company.
All his assets will be given up except for a sum for legal fees and for a "modest" living allowance for his wife.
The proceeds will be split between Worldcom investors and telecoms firm MCI, the company which was formed after Worldcom emerged from bankruptcy.
About 20,000 workers lost their jobs and shareholders lost close to $180bn when Worldcom collapsed in 2002 with an $11bn hole in its accounts.
"This is an important step in conveying a message that the crimes committed by Mr Ebbers and others in the series of securities scandals will be responded to very, very forcefully," said Mr Hevesi.
He said Mr Ebbers was "the person most responsible for the biggest corporate fraud in history".
Federal prosecutors have asked for a sentence of 85 years in prison for Mr Ebbers, which would mean spending the rest of his life behind bars.
The terms of the deal with Mr Hevesi still have to be approved by US district judge Denise Cote.