Former Enron accountant indicted

HOUSTON -- A former Enron Corp. accountant described as "a principal architect" of a scheme to mislead government regulators and investors turned himself in Thursday, and pleaded innocent to federal fraud charges related to the energy giant's 2001 collapse.\nRichard Causey, 44, entered his plea before U.S. Magistrate Judge, Frances Stacy. He was released on $1 million bond, secured by $500,000 in cash provided by a brother-in-law.\nWhen asked if he was employed, Causey replied, "I am not."\nCausey, who surrendered to the FBI before daybreak Thursday and was taken to court in handcuffs, was described in a six-count indictment unsealed Thursday as "a principal architect and operator of the scheme to manipulate Enron's reported earnings." He was charged with security fraud and conspiracy to commit security fraud.\nIf convicted of all charges, Causey faces a maximum sentence of 55 years in prison and $5.25 million in fines.\nAlong with other Enron executives and senior managers, the indictment handed up Wednesday said Causey "engaged in a wide-ranging scheme, through a variety of devices, to deceive the investing public about the true performance and profitability of Enron's businesses."\nThe document noted Causey reported to Enron's chairman and chief executive officer but did not name former Enron Chairman Kenneth Lay or former CEO Jeffrey Skilling. Neither of them have been charged with any crime.\nAccording to the indictment, the scheme's objectives -- among other things -- were to produce earnings that grew by 15 to 20 percent annually and meet or exceed "without fail" the published expectations of industry analysts, while avoiding public reporting of large losses.\nCausey's trial was set for March 8. Prosecutor Sam Buell estimated the trial would take three to six weeks.\nAlso Thursday, the Securities and Exchange Commission filed a civil complaint accusing Causey of helping Enron file fraudulent information with the agency.\nMark Hulkower, one of Causey's attorneys, said Wednesday his client "has done absolutely nothing wrong, and we will vigorously contest any charges the government may bring."\nCausey had been expected to turn himself in and appear in federal court two weeks ago. But his case moved to the back burner when a plea bargain package for former Enron finance chief Andrew Fastow and Fastow's wife, Lea, hit a snag.\nLast week, the Fastows pleaded guilty in their separate cases -- Andrew Fastow to two counts of conspiracy, Lea Fastow to one count of filing a false tax return. Those guilty pleas needed to be secured before moving on to Causey, sources close to the investigation said Wednesday on condition of anonymity.\nLike Andrew Fastow, Causey reported directly to Lay and Skilling. Causey and Fastow split financial duties at Enron and were at the same management level.\nEnron imploded in late 2001 in a sea of hidden debt, inflated profits and accounting tricks.\nCausey was fired in February 2002 after an internal probe concluded he failed in his duty to adequately look out for Enron's interests when the energy giant did deals with Andrew Fastow's partnerships. He also invoked the Fifth Amendment and declined to answer questions when he appeared before a congressional committee that year.\n"Richard Causey and the other corrupt executives that ran Enron into the ground, used some of the most sophisticated tricks in the corporate-fraud playbook to con the public into believing Enron was a success," James B. Comey, a deputy attorney general, said in Washington.\nAndrew Fastow's October 2002 indictment referred to the chief accounting officer as having a secret deal with Fastow ensuring he wouldn't lose money when one of many shady partnerships he ran did business with Enron. Causey was chief accounting officer when the partnerships were operating.\nAndrew Fastow admitted he and others in Enron's senior management misled investors about Enron's finances to inflate its stock and he schemed to enrich himself and others at shareholders' expenses.\nCausey was one of many Enron executives who joined the energy giant after working at its former outside auditor, Arthur Andersen LLP. He started at Enron in 1991 as assistant controller and became chief accounting officer in 1999.