The government's massive Enron Corp. investigation is nearly complete following the sentencing Friday of two former executives of the bankrupt company.
Michael Kopper, 41, a former global finance manager, who was the first former Enron executive to plead guilty, was sentenced in Houston to three years and one month in prison. Under ex-CFO Andrew Fastow's direction, Kopper helped create the dubious special purpose entities (SPE) that shifted Enron's business losses off the books. His dealings were first detailed in a Securities and Exchange Commission filing by Enron as it attempted its ill-fated merger with Dynegy Inc. in November 2001 (see Daily GPI, Nov. 9, 2001).
An Enron internal probe, led by William C. Powers of the University of Texas School of Law, in early 2002 reported that Kopper illegally pocketed at least $10 million from the SPE transactions (see Daily GPI, Feb. 6, 2002). Ordered that month to testify before a House subcommittee, Kopper invoked his rights under the Fifth Amendment to avoid self-incrimination (see Daily GPI, Feb. 8, 2002). Kopper was indicted, and he pleaded guilty in August 2002 to felony conspiracy to commit wire fraud and money laundering, and at that time, agreed to surrender $12 million to the federal government (see Daily GPI, Aug. 21, 2002). He could have received up to 15 years in prison.
Also on Friday, Mark Koenig, 51, the company's former investor relations director, was sentenced to 18 months in prison. Koenig was one of the prosecution's key witnesses in its successful prosecution of Enron founder Kenneth Lay and ex-CEO Jeffrey Skilling earlier this year.
Koenig had never been accused by the government of enriching himself through any of Enron's illegal schemes. However, Koenig was in charge at one time of writing the earnings press releases for the quarterly statements, and he admitted that he had provided false information to shareholders and financial analysts for some quarterly reports.
Koenig pleaded guilty in 2004 to aiding and abetting securities fraud and agreed to pay a $1.49 million fine to the Securities and Exchange Commission (see Daily GPI, Aug. 26, 2004).
In related news, the Department of Labor on Thursday entered into an agreement with Skilling to settle an $85 million lawsuit. The agreement bars Skilling from overseeing any company's employee benefit program. It also waives Skilling's rights to pension benefits from Enron. The agreement requires approval by the U.S. District for the Southern District of Texas. If the settlement is approved, it will resolve all Labor Department civil actions against Skilling.
If Skilling's convictions are overturned or vacated, the settlement requires Skilling to still pay $2.5 million to the bankrupt company's pension fund participants and beneficiaries in Enron's savings and stock ownership plans, plus $500,000 in penalties to the Labor Department.
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.