Another former Enron Corp. official reached a plea agreement with federal prosecutors in Houston last week, a sign that the Enron Task Force is continuing its two-year investigation of the failed energy merchant and its management team.
Timothy DeSpain, a former assistant treasurer at Enron, plead guilty late Tuesday in a Houston federal courtroom to one count of conspiracy to commit securities fraud. The plea agreement states that between 1999 and just before Enron filed for bankruptcy in Dec. 2001, DeSpain falsely represented the company’s true financial condition to credit ratings agencies.
According to the plea agreement, Enron entered into billions of dollars in prepay transactions with financial institutions that assisted the company in misrepresenting its cash flow. DeSpain was a key contact with the major credit ratings agencies.
DeSpain admitted in the agreement that he had been “directed” by undisclosed superiors to engage in conduct “to manipulate fraudulently Enron’s credit rating.” DeSpain now faces up to five years in prison.
DeSpain’s agreement contains a reference to Halliburton Co., where he previously worked. Although no specific activities are mentioned, the U.S. Justice Department agreed to not bring additional charges against DeSpain “for any heretofore disclosed participation in criminal activity in which he engaged in his capacity as an officer or employee of Enron and Halliburton.”
Houston-based Halliburton is under investigation by several government agencies related to its overseas contract work, and it has denied any wrongdoing. A spokeswoman could not detail when DeSpain worked for the company.
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