Former top accountant Richard Causey pleaded guilty to securities fraud on Wednesday and agreed to help pursue convictions against founder Kenneth Lay and former Chief Executive Jeffrey Skilling. The three had been scheduled to be tried together on conspiracy, fraud and other charges.
Causey will serve seven years in prison and forfeit $1.25 million to the government, according to the plea deal.
Andrew Fastow, the former chief financial officer, pleaded guilty in January 2004 to two counts of conspiracy, admitting to orchestrating schemes to hide the company’s debt and inflate profits while pocketing millions of dollars. He agreed to serve the maximum 10-year sentence, which will begin in July 2006, after he testifies against his former bosses.
Before bankruptcy, Enron was one
Fastow’s wife, Lea Fastow, completed a year-long sentence in July on a misdemeanour tax charge for failing to report her husband’s kickbacks.
Ben Glisan Jr, the former treasurer, is serving a five-year sentence for his role in the scandal.
Two former Merrill Lynch & Co executives were sentenced to short prison terms for their roles in a bogus Enron sale of power barges.
Qwest Communications International Inc
Joseph Nacchio, former Qwest CEO, was indicted last Tuesday on 42 counts of insider trading accusing him of illegally selling off $101 million in stock.
In July, Robin Szeliga, former CFO, pleaded guilty to one criminal count of insider trading to become the highest-ranking officer to admit wrongdoing in a scandal that forced the telephone company to erase billions of dollars in revenue. She has reached a plea bargain in the SEC case, agreeing to co-operate with federal investigators.
Qwest agreed last year to pay $250 million to settle SEC charges of fraud in a deal that did not include individuals.
Adelphia Communications Corporation
Michael Rigas, a son of the founder of Adelphia, pleaded guilty last month to a charge of making a false entry in a financial record, eliminating the need for his retrial on securities fraud and bank fraud charges in a scandal that forced the cable giant into bankruptcy.
John Rigas and his son, Timothy, were convicted in federal court last year of conspiracy, bank fraud and securities fraud. On 20 June, John Rigas was sentenced to 15 years in prison, and Timothy Rigas to 20 years. They are free pending appeal.
A fourth executive, Michael Mulcahey, was found not guilty of conspiracy and securities fraud.
In October, John and Timothy were indicted in Philadelphia on charges they and other family members did not pay $300 million in taxes.
WorldCom chief Bernard Ebbers
Bernard Ebbers, who as CEO of WorldCom oversaw the largest corporate fraud in US history, was sentenced on 13 July to 25 years in prison.
The sentence was handed down in Manhattan three years after WorldCom collapsed in an $11-billion accounting fraud, wiping out billions of investor dollars. A judge ruled in September that Ebbers can stay out of prison while he appeals his conviction.
Richard Scrushy, the former CEO, was acquitted on 28 June on all 36 counts of conspiracy, false reporting, fraud and money laundering in an alleged $2.7-billion earnings overstatement at the rehabilitation and medical services chain over seven years, beginning in 1996.
He blamed the fraud on 15 former HealthSouth executives who pleaded guilty. Hannibal “Sonny” Crumpler, a former HealthSouth executive, the second person to stand trial in the fraud, was convicted last month of conspiracy and lying to auditors.
On 10 December, Bill Owens, a one-time HealthSouth chief financial officer, was sentenced to five years in prison. Owens was a main government witness in the failed prosecution of Scrushy.
Tyco International Ltd
L. Dennis Kozlowski, the former CEO, and Mark H Swartz, the CFO, were convicted on 17 June on 22 of 23 counts of grand larceny, conspiracy, securities fraud and falsifying business records.
Prosecutors accused the two of conspiring to defraud Tyco of millions of dollars to fund extravagant lifestyles.
The two were sentenced to eight and one-third to 25 years in prison. A judge refused to release Kozlowski and Swartz on bail while they appeal their convictions.
Credit Suisse First Boston
The company’s former investment banking star, Frank Quattrone, was convicted in May 2004 on federal charges of obstruction of justice, after his first trial ended in a hung jury.
Quattrone, who made a fortune taking internet companies public during the dot-com stock boom, was sentenced to 18 months in prison.
He is free on bail, appealing the conviction.
E Kirk Shelton, former vice-chairman, was convicted in January of conspiracy and securities, wire and mail fraud. He was sentenced on 3 August to 10 years in prison and ordered to pay full restitution for his role in an accounting scandal that cost investors and the company more than $3 billion.
Shelton was ordered to pay $3.27 billion to Cendant including an initial “lump sum” payment of $15 million last month. He delivered cash, company stock and company-funded insurance policies, a combination that Cendant said is at least $2.4 million short and fluctuates daily.
Shelton stood trial with Walter Forbes, former Cendant chairman, whose case ended in a mistrial and will be retried. Shelton is free pending his appeal.
Four other former executives have already pleaded guilty.