HOUSTON – A former top accountant at Enron Corp. sealed his plea deal with prosecutors Wednesday and became a key helper for the government in its pursuit of convictions of former CEOs Kenneth Lay and Jeffrey Skilling, who were granted two extra weeks to adjust to the setback.
The accountant, Richard Causey, pleaded guilty to securities fraud Wednesday in return for a seven-year prison term, which could be shortened to five years if prosecutors are satisfied with his cooperation in the much-anticipated trial. He also must forfeit $1.25 million to the government, according to the plea deal.
Causey’s arrangement included a five-page statement of fact in which he admitted that he and other senior Enron managers made various false public filings and statements.
“Did you intend in these false public filings and false public statements, intend to deceive the investing public?” U.S. District Judge Sim Lake asked.
“Yes, your honor,” replied Causey, who said little during the short hearing, appearing calm, whispering to his attorneys and answering questions politely.
Lay, Skilling and Causey had been scheduled to be tried together Jan. 17 on conspiracy, fraud and other charges related to the scandal-ridden company’s collapse more than four years ago. The deal leaves Lay and Skilling with another opponent rather than an ally who has been part of their united defense front since the trio was first indicted last year.
After Causey’s plea, the judge granted a defense request to delay the trial’s start for two weeks, until Jan. 30.
Causey’s formal sentencing was set for April 21 but could be postponed. The maximum penalty for securities fraud is 10 years in prison and a fine of $1 million or twice the amount illegally gained, followed by three years of probation.
The amount of cash Causey must forfeit is slim compared with multimillion-dollar fines and forfeitures assessed to other former Enron executives who admitted to crimes.
Former finance chief Andrew Fastow, who masterminded schemes to manipulate Enron’s books while skimming millions for himself on the side, agreed to forfeit nearly $30 million in cash and property when he pleaded guilty to two counts of conspiracy in January 2004.
Also, Causey’s lawyers have repeatedly noted in filings that their client didn’t have the resources to set aside $20 million-plus for legal fees like Skilling and Fastow, often forcing them to tag on to the wealthier defendants’ trial preparation efforts.
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