Former Enron Chief Accountant Faces Criminal, Civil Charges

Andrew Fastow’s alleged partner in Enron crime pleaded not guilty yesterday to six criminal charges handed up in an indictment by a federal grand jury looking into the collapse of what was the nation’s seventh largest company.

Richard A. Causey, 44, who was the energy giant’s chief accountant during the years in which massive fraud allegedly occurred, is accused of five counts of securities fraud and one count of conspiracy to commit securities fraud. He will be released on $1 million bail to await trial.

In conjunction with the criminal case filed by the Justice Department, Causey was charged yesterday by the Securities and Exchange Commission with violating, and aiding and abetting the violation of, the antifraud, periodic reporting, books and records, and internal controls provisions of the federal securities laws. The SEC seeks restitution of all ill-gotten gains, seeks to bar Causey from serving as a director or officer of a publicly held company and seeks an injunction against future violations of federal securities laws.

Causey shared financial duties and rank with former Chief Financial Officer Andrew Fastow, and like Fastow, reported to former Chief Executive Officer Kenneth Lay.

Fastow and his wife Lea entered into plea agreements last week with federal prosecutors with Andrew Fastow pleading guilty to two counts of conspiracy and Lea Fastow pleading guilty to filing a false tax return. He faces 10 years in prison and she will spend 5 months in prison. Anonymous sources told Dow Jones Newswires that the Fastow deal needed to be finalized before prosecutors could turn their attention to Causey.

"Rick Causey has done absolutely nothing wrong and we will vigorously contest any charges the government may bring," Mark Hulkower, one of Mr. Causey's attorneys, said Wednesday.

Last week, reporters speculated about how well others in Houston were sleeping knowing that Fastow’s deal hinged on his cooperating with prosecutors attempting to make cases against other Enron players.

As part of his deal, Fastow admitted that he and other senior Enron managers misled investigators about Enron’s finances to inflate the stock and that he participated in schemes designed to enrich himself and others at the expense of stockholders, Dow Jones reported.

Dow Jones reported that Causey was the chief accounting officer when many of Fastow’s schemes were operational. Fastow’s October 2002 indictment indicates that Causey had a secret deal with Fastow, guaranteeing that Fastow wouldn’t lose money when one of his partnerships did business with Enron, Dow Jones reported.

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.