Former Enron Corp. executive Ben Glisan Jr. was led off from a Houston courtroom in chains last week after pleading guilty to one count of criminal conspiracy. Handpicked by former CEO Jeffrey Skilling as the company’s treasurer in May 2000, the former whiz kid was given the maximum sentence of five years. He will serve his time in a federal minimum security prison.

Glisan had pleaded innocent last May after he was indicted on 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 (DOJ) Enron Task Force, said after the sentencing that she had not counted on Glisan to cooperate 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.”

Federal prosecutors apparently have stepped up their efforts in recent weeks to determine whether others, including former Enron Chairman Kenneth Lay and Skilling should face criminal charges, and the sentencing last week of Glisan may prod those under indictment or facing trials to come forward. Both Lay and Skilling have repeatedly denied any wrongdoing during their tenure at Enron — and neither have been indicted — but investigators apparently are focusing on “individuals who possess evidence” to decide whether they could pursue criminal charges.

A DOJ spokesman declined to comment, but said the Enron investigation is “ongoing.” Meanwhile, a secret federal grand jury in Houston has been hearing evidence related to the bankrupt energy trader for more than a year, and “the investigation is clearly moving into a very aggressive stage,” a source told the Wall Street Journal last week. Among other things, Caldwell, who has been splitting her time between the DOJ’s Washington, DC office and Houston, is moving to Houston full time.

To date, 19 former Enron employees have been charged in the wide-ranging federal investigation. Nearly all of those indicted were executives who worked with former CFO Andrew Fastow, whose trial is set for April 2004.

According to the Journal, federal investigators now are warning certain witnesses that they may face a “change of status” and rather than being treated only as a witness, “such an individual could become subject to possible criminal charges.” Pressure apparently is being applied in cases where investigators believe individuals have not been completely forthcoming.

Several ex-Enron executives now under indictment apparently are cooperating with investigators. Michael J. Kopper, a former finance executive who worked under Fastow, pleaded guilty last year to twin counts of felony conspiracy to commit wire fraud and money laundering and is said to be cooperating with the federal investigation (see NGI, Sept. 2, 2002). Also said to be cooperating on the case is Larry Lawyer, who had worked for Enron Broadband Services. Lawyer pleaded guilty last year to not reporting $79,000 in Enron-related income (see NGI, Dec. 2, 2002).

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, also are said to be talking with investigators (see NGI, Oct. 21, 2002).

Enron prosecutors separately are considering criminal charges against other individuals, possibly within the next few weeks, Caldwell said in Houston last week. Among other things, the activities of officials at investment banks and banks that helped Enron establish the complex financial structures that are central to the criminal probe are being investigated. Merrill Lynch & Co., J.P. Morgan Chase & Co. and Citigroup Inc. settled civil charges earlier this year, without admitting or denying wrongdoing.

In addition to serving as Enron’s treasurer, Glisan also had been a managing director and once headed the Enron Broadband Services unit. He was originally charged in May on 24 counts of money laundering, fraud and conspiracy in a superseding indictment that included Fastow and Dan Boyle, another ex-Enron finance executive (see NGI, May 5).

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 NGI, Nov. 12, 2001).

Glisan was terminated from Enron for his involvement in Southampton, an off-balance sheet entity put together by Fastow. In the deal, Glisan invested $5,800 and within a few months, he made about $1.04 million. As part of his sentencing agreement, Glisan agreed to pay back $916,137 that he netted after taxes from the investment. He also will not attempt to recover $412,000 in taxes that he paid on the deal in April 3002.

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