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Two More Sentenced in Dynegy's Project Alpha Scheme

Former Dynegy Inc. vice president Gene Foster in Houston Thursday was sentenced to 15 months in prison, and former accountant Helen Sharkey received a one-month prison sentence for their roles in Dynegy's Project Alpha, which helped the company artificially inflate its reported cash flow in 2001. Foster also was given three years probation and fined $1,000; Sharkey will pay a $10,000 fine.

Jamie Olis, Dynegy's former senior director of tax planning; Foster, former vice president of tax; and Sharkey, a former member of Dynegy's risk control and deal structure group, were indicted in 2003, and each was charged with conspiracy, securities fraud, mail fraud and wire fraud by the U.S. Attorney's Office in Houston. Foster and Sharkey agreed to cooperate with the federal government, and they pleaded guilty to conspiracy in August 2003 (see NGI, Aug. 11, 2003).

Judge Sim Lake gave Sharkey a lesser sentence but higher fine, noting she will not begin serving her prison term until Oct. 5 so that she may continue to care for her twin 3-week-old sons. Lake said the sentence "will interfere with your family, but it's the least severe sentence I could in good conscience impose."

Olis, who had pleaded innocent, was convicted in 2003 on six counts of criminal conspiracy as well as securities, wire and mail fraud (see NGI, Nov. 17, 2003). Using federal sentencing guidelines based on investors' losses, Lake sentenced Olis to 24 years in prison, but the conviction was overturned last November by the 5th Circuit Court of Appeals (see NGI, Nov. 7, 2005). Olis' resentencing will be delayed until prosecutors and Olis' defense team can agree on a damages figure.

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