Houston: Former Enron chief accounting officer Richard Causey was sentenced on Wednesday to five and one-half years in prison for approving the bogus bookkeeping that led to the company's 2001 collapse.
Causey, who faced more than 20 years behind bars if convicted on three-dozen original charges, had agreed to a maximum sentence of seven years in jail under a plea arrangement.
He will also forfeit $1.25 million under the deal. 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. US District Judge Sim Lake set Causey's sentence at 66 months, or five and a half years. Causey was a key figure in the financial scandal that drove Enron to bankruptcy in late 2001 following disclosures that the company used off-the-books partnership deals to hide billions of dollars in debt and to inflate profits.
"Improper things were done at Enron," Causey told the judge. "Some things were done by me and for that I am profoundly sorry." Causey's lawyers asked Lake to cut his jail time to less than five years because of his cooperation and in light of the four-year reduction in prison time obtained by former Enron chief financial officer Andrew Fastow in October.
Prosecutors recommended only a three- to six-month reduction in Causey's punishment, which the judge granted. Causey's attorney Reid Weingarten described him as "the guy you would want to coach your kid, marry your sister." Government attorney Kathryn Ruemmler countered that Enron's accounting department under Causey "drifted toward deceit."
"Without Causey's implicit consent and implicit conduct, the fraud at Enron could not have occurred."
After joining Enron from accounting firm Arthur Andersen in 1991, Causey worked closely with Lay, Skilling and 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 the first quarter of 2000, Enron recorded $85 million in earnings from an interest it held in a partnership called JEDI, which held Enron stock, Causey said in 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 Jan. 20 analyst call, Causey said. Fastow, who pleaded guilty and is serving a six year-prison sentence, testified against Lay and Skilling.
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