Richard Causey, Enron Corp.'s former top accountant, will serve five-and-a-half years in prison for his role in the company's fraud schemes. Causey was sentenced on Wednesday in Houston.
Causey, 46, had faced 30 criminal charges and was bound for trial with Enron founder Kenneth Lay and ex-CEO Jeffrey Skilling, but he grabbed a plea deal last December just two weeks before the trial began (see Daily GPI, Dec. 29, 2005).
Causey pleaded innocent when he was charged in early 2004 on fraud and conspiracy charges (see Daily GPI, Jan. 23, 2004). However, after taking the government's offer last year, Causey became the 16th cooperating witness for the government. He never took the stand against his former bosses -- and some feared he could have even hurt the prosecution's case if he had -- but his behind-the-scenes involvement in the trial was considered integral to obtaining convictions against Lay and Skilling.
The plea agreement stipulated that Causey serve a seven-year prison term, which could be reduced to no less than five years with a government recommendation. The maximum penalty for securities fraud is 10 years in prison and a fine of $1 million or twice the amount illegally gained. Causey was fined $1.25 million, and he forfeited a claim to $250,000 in deferred compensation from Enron. However, prosecutors dropped plans to seize Causey's Houston home, estimated to be worth about $950,000.
Causey had been promoted to chief accounting officer in 1998, seven years after he began his career at Enron as assistant controller. He previously worked for Enron's outside accounting firm, Arthur Andersen LLP. Brought on board by Skilling, Causey was considered to be on equal executive footing with former CFO Andrew Fastow. Fastow pleaded guilty to two counts of conspiracy in January 2004 and is serving a six-year prison term.
Following Enron's collapse in late 2001, Causey remained at Enron. However, he was fired in February 2002 after an independent investigation concluded he had failed to provide proper oversight on Enron's notorious special purpose entities (see Daily GPI, Feb. 15, 2002). The firing came a week after Causey pleaded the Fifth Amendment when called to testify about the company's demise before a Congressional committee.
The government's massive Enron investigation is nearly complete. In Houston on Friday, former investor relations director Mark Koenig and Michael Kopper, a former managing director and Fastow aide, are scheduled to be sentenced. Koenig pleaded guilty to fraud in August 2004 (see Daily GPI, Aug. 26, 2004). Kopper pleaded guilty to fraud and money laundering in 2002 (see Daily GPI, Aug. 22, 2002). Kopper also was the first Enron executive to admit to any wrongdoing in the scandal.
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