Andersen's Duncan Pleads Guilty

David B. Duncan, the former Andersen partner in charge of the Enron audit, who made headlines shortly after the Enron bankruptcy occurred when it was discovered that he ordered the "rushed disposal" of documents relating to the Enron audit, has plead guilty to a federal charge of obstructing justice.

Mr. Duncan has agreed to cooperate with the U.S. Justice Department and will most likely be called as a witness against Andersen and Enron in future litigation. Mr. Duncan was fired from Andersen in January.

In his statement filed with the U.S. District Court in Houston, Mr. Duncan admitted that he persuaded co-workers to shred documents to thwart the government's investigation into the Enron collapse. He pleaded guilty to the charge that he did "knowingly, intentionally, and corruptly persuade and attempt to persuade other persons… to withhold records, documents, and other objects from an official proceeding, namely an investigation by the Securities and Exchange Commission."

Mr. Duncan also admitted to personally destroying documents in connection with the Enron audit.

Mr. Duncan faces a possible fine and up to 10 years in prison if convicted of obstruction of justice. His agreement to cooperate with the government and testify against Andersen will presumably buy him some leniency in sentencing, however U.S. District Judge Melinda Harmon, who is hearing the case, warned him that the sentence could be more severe than he expects.

Among the terms of the plea deal, Mr. Duncan is immune to further prosecution relating to charges against Andersen and Enron, he will be available to testify at trials in this matter, and he is prevented from selling his story or otherwise profiting from the event.


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