Former Enron Corp. executive Ben Glisan Jr., handpicked by former CEO Jeffrey Skilling as the company’s treasurer in May 2000, pleaded guilty Wednesday in Houston to one count of criminal conspiracy and was sentenced to the maximum sentence of five years in a federal minimum security prison. He was immediately taken into custody.

In May, Glisan had pleaded innocent to more than 20 criminal charges, but he told U.S. District Judge Kenneth Hoyt Wednesday morning that he took “full responsibility” for his actions while he worked for Enron. As part of the sentencing agreement, Glisan will forfeit more than $900,000 that he received in an Enron-related scheme. He also will be on probation for three years after his release from prison.

Leslie Caldwell, who is leading the Department of Justice’s Enron Task Force, said that she had not counted on Glisan cooperating with investigators, but “the fact that he now admitted he created a fraudulent way for Enron to hide things off its books I think will send a somewhat chilling message to other people.”

In addition to serving as Enron’s treasurer, Glisan also had been a managing director and once headed the Enron Broadband Services unit. Earlier this year he was charged with more than 24 counts of money laundering, fraud and conspiracy in a superseding indictment that included ex-CFO Andrew Fastow and Dan Boyle, another ex-Enron finance executive (see Daily GPI, May 2).

Glisan’s deal with prosecutors is considered key, because apparently an investigation continues into whether Skilling or former Chairman Kenneth Lay knew about the shady financial transactions during their tenure at Enron (see Daily GPI, Sept. 10). Both Skilling and Lay have denied any knowledge of the fraudulent deals, and neither has been indicted.

Prosecutors alleged that Glisan conspired with Fastow, Boyle, Merrill Lynch & Co. and others to fraudulently improve Enron’s balance sheet by illegally “parking” some poorly performing barges moored off the coast of Nigeria, first with Merrill Lynch and then with Enron in an off-balance sheet transaction known as LJM. Glisan also had been charged with Fastow for creating Talon, another special-purpose entity, which engaged in hedging transactions with Enron that allowed the company to substantially improve its reported financial results. According to the indictment, Talon failed to comply with accounting requirements because Enron had guaranteed a profit to LJM.

Glisan, 37, joined Enron in 1996 after working as an accountant for Coopers & Lybrand in Dallas and later at Arthur Andersen LLC. As a protege of Fastow, Glisan was one of Enron’s highest ranking financial executives before he was fired in November 2001, just weeks before Enron declared bankruptcy (see Daily GPI, Nov. 9, 2001).

Glisan was terminated from Enron for his involvement in Southampton, an entity put together by Fastow. In the deal, Glisan invested $5,800 and within a few months, he made about $1.04 million. Last year, Glisan agreed to pay back $916,137 that he netted after taxes from the investment. He stated that after he received his profit in the Southampton deal, he had paid $412,000 in taxes in April 3002, and did not believe he had done anything improper.

Glisan is the third ex-Enron finance executive to plead guilty in the government’s case. Michael J. Kopper, who worked closely with Fastow, pleaded guilty in August 2002 to money laundering and conspiracy (see Daily GPI, Aug. 22, 2002). As part of his plea agreement, Kopper is cooperating in the investigation. And Larry Lawyer, who had worked for Enron Broadband Services, last November pleaded guilty to not reporting $79,000 in Enron-related income (see Daily GPI, Nov. 27, 2002). Lawyer also accepted a plea arrangement and is cooperating with prosecutors. Also agreeing to cooperate with the government are former Enron energy traders Timothy N. Belden and Jeffrey Richter, who pleaded guilty to conspiracy to commit fraud by manipulating energy prices in the California market.

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