Former Enron chief accounting officer Richard Causey was sentenced on Wednesday to five-and-a-half years in prison for approving the bogus bookkeeping that led to the company’s 2001 collapse.
Causey (46) the last of the top-tier 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 Ken Lay and Jeff Skilling, both of whom were found guilty in May. Lay died of a heart attack July 5.
”Improper things were done at Enron,” Causey told United States 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 forfeit $1,25-million 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.
Enron’s demise as the largest US energy trader contributed to a severe contraction of the entire US electricity trading industry and accelerated a move away from competitive markets for electricity in several states.
After joining Enron from accounting firm Arthur Andersen in 1991, Causey worked closely with Lay, Skilling and former Enron chief financial officer 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 $85-million in earnings from an interest it held in a partnership called Jedi, which held Enron stock, Causey said in his plea deal.
The $85-million was reported as operating earnings when the increase came directly from a rise in Enron’s stock price following a January 20 analyst call, Causey said.
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 has said he would appeal.
Sentences handed down so far for the 16 Enron employees who have pleaded guilty have ranged from probation to 24 years for Skilling.
Causey will begin his prison sentence after the US Bureau of Prisons determines where he will be housed.
He left the courthouse with his wife and three teenage children without commenting to reporters.
Two more ex-Enron executives, who pleaded guilty, will learn their fate on Friday. Michael Kopper, who worked closely with Fastow in setting up the partnerships used by Enron to inflate profit and Mark Koenig, former head of investor relations. – Reuters