Houston – Former Enron Corp. chief accounting officer Richard Causey will cooperate with prosecutors in their case against Ken Lay and Jeff Skilling as part of a plea agreement that sends him to prison for as much as seven years.
Causey, 45, pleaded guilty Wednesday to one count of securities fraud in federal court. He had faced more than 20 years in prison if convicted on more than 30 counts of fraud, conspiracy and illegal insider trading tied to Enron’s collapse. Causey was to go on trial next month alongside Lay, 63, Enron’s former chairman, and Skilling, 52, the former chief executive.
“Causey makes the government’s case” if he testifies, said David Berg, a Houston defense lawyer. “He has the road map through the off-the-books deals Enron used to hide its debt.”
The highest-ranking Enron executive to cooperate with prosecutors had been former chief financial officer Andrew Fastow. He agreed to serve 10 years in prison for orchestrating an accounting fraud that led in December 2001 to what was then the largest bankruptcy in U.S. history.
U.S. District Judge Sim Lake postponed the start of jury selection in the trial of Lay and Skilling to Jan. 30 from Jan. 17.
Causey’s testimony might help the former executives by showing that Fastow’s “thievery” was to blame for Enron’s demise, said Michael Ramsey, Lay’s attorney.
Fastow “was the worm that ate through the apple,” said Daniel Petrocelli, Skilling’s lead lawyer. He attributed Causey’s plea to his financial difficulties and desire to avoid a longer sentence that would keep him from his wife and three children.
Causey will “cooperate fully” with prosecutors and pay a $1.25 million fine, plus restitution, Lake said, reading from the plea agreement. It didn’t specify whether Causey will testify.
The judge plans to sentence Causey to between five and seven years on April 21.
