The Securities and Exchange Commission (SEC) brought civil charges against former Enron Corp. executive Michael J. Kopper Wednesday for violating the antifraud provisions of the federal securities laws. The SEC charges came on the same day he appeared in a Houston federal courtroom to plead guilty to twin counts of felony conspiracy to commit wire fraud and money laundering. Kopper, who is expected to be sentenced April 4, 2003 on the felonies, is the first former Enron official to admit any wrongdoing in the accounting scandal.

Kopper neither admitted nor denied the SEC charges, which an agency spokeswoman said were the “most severe of the civil law enforcement remedies” that could be levied against him. As part of the agreement, which is subject to approval by the U.S. District Court, Kopper is permanently barred from acting as an officer or director of a public company and is required to surrender approximately $12 million of “criminally derived” funds and assets.

He further has agreed to cooperate with the SEC and Department of Justice in their continuing investigations of other former officials of the failed energy giant, such as CEO Jeffrey Skilling and CFO Andrew Fastow. The criminal conspiracy charges to which Kopper admitted Wednesday were part of an agreement he reached with the Justice Department.

“We anticipate that the cooperation Mr. Kopper has agreed to provide will be important in identifying fully the individuals and entities that contributed to the company’s collapse,” said SEC Enforcement Division Director Stephen M. Cutler.

“This is the first in what we anticipate to be a series of actions brought as the result of the close cooperation between the SEC and the Justice Department’s Enron task force,” he also noted.

The maximum prison term facing Kopper, 37, would be five years for the felony charge of wire fraud and 10 years for money laundering, as well as penalties ranging from $500,000 to $750,000. However, prosecutors indicated they will recommend a lighter sentence to the judge, provided he continues to cooperate with federal agencies. Kopper could be released in as little as three years, according to the cooperation agreement he signed with Justice. U.S. District Judge Ewing Werlein set bond for Kopper at $5 million, the Houston Chronicle reported.

In court Wednesday, Kopper admitted to stealing millions from Enron as he helped to set up and run three off-the-book partnerships, called Chewco, Radar and Southampton, the newspaper said. Kopper, who was Fastow’s right-hand man at the company, said the two men defrauded shareholders and investors, and kept secret from Enron the fact that they were profiting personally from the questionable partnerships, it noted.

According to the SEC complaint, the former managing director of Enron’s Global Finance shared in gains of up to $13.5 million from the partnership deals. Kopper, who lives in Houston, left Enron months before it slid into bankruptcy last December.

The Justice Department also said in documents filed Wednesday it plans to seize close to $23.5 million in funds from several former Enron executives and others, monies that it says were obtained through illegal acts traced back to Kopper. This includes about $14.2 million held in bank accounts of Fastow and his wife, the Fastow Family Foundation and a relative, Peter Fastow. Also subject to forfeiture is a house owned by Fastow and his wife in the posh River Oaks section of Houston, according to the documents.

If any of the funds or assets cannot be located, have been transferred or sold, have been placed beyond the jurisdiction of the court, have “substantially diminished in value,” or have been “commingled with other property,” then the agreement calls for “other property” held by Kopper to be turned over to the federal government.

In addition to the plea agreement with Kopper, the Department of Justice has successfully prosecuted several non-Enron players in the accounting scandal this year. Arthur Andersen, Enron’s one-time auditor, was tried for obstruction of justice, and David Duncan, an Arthur Andersen executive who oversaw the Enron account in Houston, pleaded guilty to obstruction charges earlier this summer related to the destruction of documents sought in the government’s sweeping probe of Enron.

Also, the federal government brought indictments in late June against three former British bankers for fraudulently making off with more than $7 million in profits through an Enron third-party entity. The bankers allegedly were part of an elaborate hedging scheme set up by Fastow and his aide, Kopper.

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