Wednesday, December 28, 2005

Ex-Enron exec pleads guilty

Former Enron chief accounting officer Richard Causey and his wife Bitsy leave the federal courthouse Wednesday, Dec. 28, 2005 in Houston after pleading guilty to criminal charges pending against him. (AP Photo/Pat Sullivan)

This is from CNN.Com:

NEW YORK ( - Former Enron accounting chief Richard Causey's guilty plea to securities fraud Wednesday for his role in the financial scandal that drove the energy company into bankruptcy in 2001 is being hailed as a big win for the government in their case against former top executives at Enron.

Causey is expected to cooperate with prosecutors seeking convictions of his former bosses, Enron founder Ken Lay and ex-CEO Jeff Skilling, who face charges of fraud and conspiracy from the scandal that rocked corporate America in 2001. The two men were due to go on trial with Causey next month in Houston.

Causey, who had been facing multiple counts of conspiracy and fraud charges, entered his plea before a federal judge overseeing the case in Houston.

His eleventh hour plea agreement could tip the scales in favor of the prosecution by providing prosecutors with an additional corroborating witness against the defendants.

"Causey has long been the keys to the kingdom because he's the most important person in the Enron saga in terms of knowing who knew and who didn't know," said a source familiar with the case. "The government has been trying to get him to plead guilty long before anyone was even indicted. It's a huge win."

So the feds have got themselves another witness to bolster their case against Lay and Skilling. According to the CNN story, Causey was the chief accountant who dreamed up these creative accounting schemes. The CNN story also said that Causey "has not been accused of personally profiting from any misdeeds, [and] may prove to be a more likeable witness by a jury," over that of chief financial officer, Andrew Fastow. Not only did Fastow plead guilty to two counts of wire and securities fraud last year, but Fastow's own credibility as a witness was undermined when it was revealed that Fastow and his wife funneled cash payments to themselves, disguised as gifts. Defense lawyers for Lay and Skilling would certainly work at destroying Fastow's credibility as a government witness to the jurors. But now with Causey entering the picture as a government witness, it could certainly bolster the government's case against both Lay and Skilling, and make it harder for the defense attorneys claiming that Lay and Skilling didn't know what was going on in the company. So this complicated case is getting even more interesting.

The trial starts January 30th.

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