Former Enron Accountant Gets 5 1/2 Years for Fraud
Thursday, November 16, 2006
The former chief accountant for Enron Corp. received a 5 1/2 -year prison sentence yesterday, becoming the last member of the energy trader's upper echelon to face judgment for a fraud that cost thousands of employees their jobs and left investors billions of dollars poorer.
Richard A. Causey, 46, pleaded guilty to a single count of securities fraud in December, weeks before he was to face trial on conspiracy and fraud charges in a case that government lawyers have called the most complex white-collar prosecution in history. Causey, who must also serve two years of probation, remained free yesterday while prison officials determined whether to send him to the facility he requested, in Bastrop, Tex.
Causey's sentence follows prison terms recently handed to two other key Enron figures. Former chief executive Jeffrey K. Skilling was sentenced last month to 24 years and four months, while onetime finance chief Andrew S. Fastow was sentenced in September to six years. Company founder Kenneth L. Lay died of heart disease in July, less than two months after a jury convicted him and Skilling of misleading shareholders and employees about Enron's mounting financial problems before its December 2001 bankruptcy.
Corporate insiders portrayed Causey, a former accountant at Arthur Andersen LLP known for his genial personality and his love of golf, as a man cowed by Enron's aggressive, rules-bending culture. But prosecutors on the Justice Department's since-disbanded Enron Task Force contended that fraud could not have flourished without Causey's actions and his failure to blow the whistle on others.
His get-along attitude helped Causey steadily climb the corporate ladder, and he became Enron's top accountant in 1998, three years before the company's demise. Causey and his wife, Elizabeth, last year forfeited $1.25 million in a bank account, and he gave up the rights to about $250,000 more in deferred pay from Enron.
Under the terms of his plea agreement, Causey could have faced as many as seven years in prison, one more than Fastow, who was considered an architect of the Enron scheme and who used business partnerships to siphon as much as $60 million for himself and his friends. In September, a judge shaved four years off his possible sentence.
Prosecutor Kathryn H. Ruemmler requested a reduction of three to six months for Causey. Ultimately, U.S. District Judge Simeon T. Lake III gave Causey an 18-month credit for, among other things, helping to streamline the government's case.
Reid H. Weingarten, Causey's lawyer who is based in the District, said in an e-mail that it was "hard to be happy when a thoroughly decent man you like a lot gets 66 months, but we are relieved given how much worse it could have been."
On Friday, two more members of Enron's middle-management team are scheduled to be sentenced as the nearly five-year-old scandal draws to a close. Former investor relations official Mark E. Koenig and former finance executive Michael J. Kopper, the first man to admit criminal wrongdoing at Enron four years ago, will be sentenced by separate federal judges in Houston.