Federal criminal charges of fraud and conspiracy have been laid against Bernie Ebbers, former chief executive of bankrupt phone company Worldcom.
Meanwhile Scott Sullivan, former Worldcom finance chief, has pleaded guilty to three criminal charges.
Ebbers had previously avoided federal charges stemming from Worldcom's $11bn (£5.93bn) accounting scandal, the largest in American corporate history.
The company, now called MCI, filed for bankruptcy in July 2002.
'Illegal scheme'
It is alleged it used accounting tricks to conceal a deteriorating financial condition and to inflate profits.
Now Mr Ebbers, who built Worldcom into the US's second-largest long-distance phone carrier, has been charged.
He is charged with conspiracy to commit securities fraud, securities fraud, and filing misleading data with the Securities and Exchange Commission (SEC).
The charges were revealed by US Attorney General John Ashcroft, speaking in New York.
He said Mr Ebbers had been behind the filing of reports that did not reveal the true position of Worldcom's finances.
And he said that Mr Ebbers and his co-conspirators had engaged in "an illegal scheme" to mislead the investing public, shareholders, analysts and the SEC.
Mr Ebbers, who resigned under pressure in April 2002, has always denied any involvement in any financial fraud.
'Losses hidden'
Federal investigators had earlier filed charges against a handful of former executives, including Scott Sullivan.
Four executives have pleaded guilty to federal charges and are cooperating with the investigation - however, until now Mr Sullivan had denied any wrongdoing.
According to Mr Ashcroft, the former finance chief has now admitted, in a Federal Court in Manhattan, charges of conspiracy, fraud and making false statements about Worldcom's financial health to regulators.
The finance boss, due to go on trial in April, had previously denied charges he orchestrated the accounting fraud that improperly recorded capital expenses and masked net losses.
The 42-year-old was fired from the company in June 2002, and Mr Ashcroft said Mr Sullivan now was ready to cooperate with investigators.
'Strategic move'
Last November, Oklahoma state prosecutors dropped criminal charges against Mr Ebbers in a "strategic move" in deference to state prosecutors.
In July 2003, a US court approved a plan to make Worldcom pay a record $750m (£450m) to investors who lost money as a result of its accounting fraud.
The company hopes to emerge soon from Chapter 11 bankruptcy protection after shedding all but a fraction of the $41 billion in corporate debt.
It has revamped its management team, board of directors, and operations.
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