Enron accountant jailed for five and a half years

Enron‘s former chief accounting officer
Richard Causey has been sentenced to five and a half years in prison for
approving the bogus bookkeeping that led to the company’s 2001 implosion.

Causey, 46, the last of the high-ranking Enron executives to be sentenced,
pleaded guilty to securities fraud in December 2005, weeks before he was
scheduled to go on trial with former Enron chief executives Kenneth Lay and
Jeffrey Skilling, both of whom were found guilty in May. Lay died of a heart
attack on 5 July.

‘Improper things were done at Enron,’ Causey told US District Judge Sim Lake
at his sentencing hearing. ‘Some things were done by me, and for that I am
profoundly sorry.’

Causey, who faced more than 20 years in prison if convicted on three dozen
original charges, agreed to a maximum sentence of seven years in jail and
forfeited $1.25m under a plea deal. Causey was a key figure in the financial
scandal that followed disclosures the company used off-the-books partnership
deals to hide billions of dollars in debt and to inflate profits.

Financial scandals at Enron,
WorldCom
and Tyco led to tighter financial reporting disclosure standards for all US
companies and increased accountability for top executives.

After joining Enron from accounting firm
Arthur Andersen in
1991, Causey worked closely with Lay, Skilling and convicted ex-CFO Andrew
Fastow. In his plea, Causey admitted to conspiring with other Enron senior
managers to mislead investors about the company’s finances in order to inflate
Enron’s stock price.

In early 2000, Enron recorded $85m in earnings from an interest it held in a
partnership called JEDI, which held Enron stock, Causey said in his plea deal.
The $85m was reported as operating earnings when the increase came directly from
a rise in Enron’s stock price following a 20 January analyst call,
Causey confessed.

Fastow, who pleaded guilty and is serving a six year-prison sentence,
testified against Lay and Skilling. Causey did not testify against them.
Skilling was sentenced in October to 24 years in jail but is intending to mount
an appeal.

Related links:

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