In June, 2002, an internal audit discovered that US$3.8 billion had been 'misaccounted.' The US Securities and Exchange Commission launched an investigation into these matters on June 26, 2002 (See accounting scandals).
On July 21, 2002 WorldCom filed for Chapter 11 bankruptcy protection in the largest such filling in United States history. Its CEO and founder, Bernard Ebbers, came under fire for his failure to prevent the bankruptcy.
In August, 2002, an additional $3.3 billion in improper accounting since 1999 was announced. By the end of 2003, it was estimated that the company's assets had been inflated by around $12 billion.
In light of these accounting scandals, the company has changed its name back to MCI.
In May, 2003, the company was given a no-bid contract by the United States Department of Defense to build a cellular telephone network in Iraq. The deal has been criticized by competitors and others who cite the company's lack of experience in the area.