A Collaboration with the University of Pittsburgh

Ex-Enron chief accounting officer to testify against executives under plea agreement

[JURIST] Former Enron [JURIST news archive] Chief Accounting Officer Richard Causey [profile] has reached a deal with prosecutors and is expected to plead guilty Wednesday to one or more criminal charges and a reduced prison sentence in exchange for his testimony against former bosses Kenneth Lay [defense website] and Jeffrey Skilling [BBC profile]. Causey, who was responsible for Enron's public accounting statements, faces 35 charges of fraud, conspiracy, insider trading, lying to auditors and money laundering for his role in misleading investors regarding the health of Enron's balance sheet. Former Enron Chief Financial Officer Andrew Fastow [BBC profile] has already agreed to testify, pleading guilty [plea agreement, PDF] to wire and securities fraud charges and receiving a ten year prison sentence. Causey is expected to be a stronger prosecution witness than Fastow because he was not personally enriched by Enron's fraudulent balance sheet transactions and has not been demonized in the media to the same extent. Jury selection for Skilling and Lay's trial is scheduled to begin on January 17. AP has more. The Houston Chronicle has local coverage.

3:20 PM ET - Reuters is reporting that Causey has told the judge presiding in his case that he will plead guilty.

3:35 PM ET - Causey has pleaded guilty to a single count of securities fraud; under the plea agreement prosecutors have committed themselves to asking the judge for a seven-year sentence which could be reduced to five if Causey "provides truthful, complete and accurate information." The court could still impose a maximum ten-year sentence, however.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.