|
Accounting Scandal
|
What They Did Wrong
|
Legal Status
|
|
Kenneth Lay
|
Former Enron CEO and Chairman of the Board, he is accused of participating in widespread schemes to mislead government regulators and investors about the company’s earnings, and of insider trading. Between 1998 and 2001, Lay received $300 million from the sale of Enron stock, netting more than $219 million in profit, and was paid more than $19 million in salary and bonuses.
|
On May 25, 2006, Lay was found guilty on six charges that relate to Enron fraud, including conspiracy to commit wire fraud, perpetrating wire and bank fraud, and making false and misleading statements to employees at a company meeting, as well as to banks, securities analysts and corporate credit-rating agencies. Lay faces a maximum of 45 years in prison. And Lay will also face an additional hefty term in prison (maximum 120 years) for his conviction on four other bank fraud counts that relate to his personal banking. Lay died on July 5, 2006, and his conviction was vacated on Oct. 17, 2006.
|
|
Jeffrey Skilling
|
Former Enron CEO, he is accused of participating in widespread schemes to mislead government regulators and investors about the company’s earnings, and of insider trading. Between 1998 and 2001, Skilling received $200 million from the sale of Enron stock, netting more than $89 million in profit, and was paid more than $14 million in salary and bonuses.
|
On May 25, 2006, Skilling was found guilty on 19 counts of conspiracy, fraud, false statements and insider trading. He was found not guilty on nine counts of insider trading. Skilling faces a maximum of 185 years in prison. Skilling was sentenced to 24 years and four months in prison on Oct. 24, 2006 in Houston.
|
|
Richard Causey
|
Left Arthur Anderson to join Enron in 1991, where he rose to chief accounting officer. Helped the company hide debts by misreporting the books. Between 1998 and 2001, Causey received more than $14 million from the sale of Enron stock, netting more than $5 in profit, and was paid more than $4 million in salary and bonuses.
|
Indicted on six counts of securities fraud and conspiracy to commit securities fraud. Pleaded guilty to securities fraud in December 2005, in a plea deal that calls for a sentence of 7 years in prison that could be reduced to 5 if he cooperates with the government. He may provide evidence and testify against Skilling and Lay, his one-time co-defendents. Causey was sentenced to 5 ½ years in prison on Nov. 15, 2006, and began serving his sentence at the Bastrop Federal Correctional Institution in Texas on Jan. 3, 2007.
|
|
Andrew Fastow
|
Joined Enron in 1990, a protégé of Skilling, who named him CFO. Fastow set up off-the-books partnerships that benefited Enron by hiding debt and inflating revenue, but personally enriched Fastow.
|
Facing 98 counts, he pleaded guilty in January 2004 to one charge of conspiracy to commit wire fraud and one charge of conspiracy to commit wire and securities fraud. He is to serve 10 years, forfeit $23.8 million, including homes in Galveston and Vermont, and forfeit claims on another $6 million. In January 2004, the SEC banned him from ever acting as an officer or director of a public company. Fastow was sentenced to 6 years in federal prison on Sept. 26, 2006.
|
|
Lea Fastow
|
Assistant treasurer at Enron, she served as executive assistant of one of Enron's dubious off-the-book partnerships that stole money from Enron shareholders but personally enriched herself.
|
Pleaded guilty in January 2004 to filing a false tax return. Her deal calls for five months in prison and a year of supervised release, including five months of house arrest.
|
|
Michael Kopper
|
Joined Enron in 1994, and became an important aide to Andrew Fastow, where he helped set up the numerous off-the-books partnerships.
|
Admitted giving kickbacks to Fastow and pleaded guilty to money laundering and wire fraud in August 2002. He is awaiting sentencing. He faces up to 15 years in jail, but his cooperation with prosecutors is likely to make the judge more lenient.
|
|
Ben Glison Jr.
|
Left Arthur Anderson to join Enron in 1996, and rose to treasurer in 2000. Among other things, he earned $1 million on $5,800 investment in one off-the-books partnership.
|
Pleaded guilty to one count of conspiracy to commit wire and security fraud in September 2003 but did not agree to cooperate with prosecutors. The first Enron figure to go to prison, he is serving five years. Forfeited $900,000 seized by government, plus $412,000 in taxes he paid on the money.
|
|
Dan Boyle
|
VP of energy finance and services at Enron. Accused of scheming with Andrew Fastow and Glisan to manipulate Enron's financial reports so the company would appear more successful than it was to boost the share price and get rich. This was done, prosecutors say, by illegally "parking" some poorly performing assets, namely power barges moored off the coast of Nigeria, first with Merrill Lynch and then with an Enron side partnership called LJM.
|
Charged with conspiracy to commit wire fraud, conspiracy to falsify books, records and accounts. Found guilty of conspiracy to commit wire fraud and conspiracy to falsify books, records, and accounts. Also convicted of lying to a Congressional investigator. Sentenced in May 2005 to 3 years, 10 months in prison and ordered to pay $320,000 in fines.
|
|
Dave Delainey
|
Former chairman and CEO of Enron Energy Services (where Thomas White, Bush's former Secretary of the Army, had also been the CEO). Accused of participating in wide-ranging schemes to deceive the public about the true nature of Enron's profitability.
|
Pleaded guilty to one count of insider trading in October 2003 and agreed to cooperate in the government's Enron investigations. Must pay the government $4.2 million as part of his plea bargain, plus hand over $3.7 million as part of a deal with the SEC. Agreed not to serve as an officer or director of any traded company. Sentenced to 2 ½ years in prison on Sept. 18.
|
|
Lawrence Lawyer
|
In 1997, while he was an employee of Enron Capital Management, Lawyer helped Kopper create the RADR partnership, which prosecutors say was devised "to secretly to enrich" Enron executives through the sale of Enron's interest in wind farms. Lawyer failed to report $80,000 in kickbacks he recieved.
|
Pleaded guilty in November 2002 to filing a false tax return that did not report money he received from work on the questionable Enron partnership. Awaiting sentencing.
|
|
Sheila Kahanek
|
Joined Enron in 1998 to become an accountant and senior director of a division called Enron Asia Pacific/Africa/China, where she is accused in connection with a Nigerian barge deal that the government says helped Enron falsely inflate its 1999 earnings.
|
Indicted on a charge of conspiracy to commit wire fraud and falsify books and records. In November 2004 after six weeks of testimony, Kahanek is acquitted.
|
|
David Duncan
|
Headed Arthur Anderson's Enron account beginning in 1997. Admitted he ordered Enron-related documents shredded in October 2001, two days after learning of a federal probe.
|
Pleaded guilty to obstruction of justice in April 2002, but because he agreed to cooperate with prosecutors, his sentencing has been repeatedly postponed. Arthur Andersen itself was found guilty by a jury in June 2002 of obstructing an expected Securities and Exchange Commission investigation of its client. Andersen drew the maximum $500,000 fine and five years' probation. But with Arthur Andersen’s conviction overturned by the U.S. Supreme Court and prosecutors declining to retry the case, Duncan’s plea and the charge against him were withdrawn in December 2005.
|
|
Kenneth Rice
|
The DOJ and SEC allege that Rice and others engaged in a scheme to inflate Enron's stock through fradulent activitiy related to Enron Broadband Services. Rice sold broadband stock at prices that were inflated by $53 million.
|
Pleaded guilty in July 2004 to a single count of securities fraud. Rice was sentenced to 27 months in prison on June 18, 2007.
|
|
Joseph Hirko
|
The DOJ and SEC allege that Hirko and others engaged in a scheme to inflate Enron's stock through fradulent activitiy related to Enron Broadband Services. Hirko sold broadband stock at prices that were inflated by $35 million.
|
Trial ended in July 2005 with an acquittal of some insider trading and money laundering charges. Mistrial declared on remaining charges, which include conspiracy, securities fraud and wire fraud. Scheduled for a new trial in September 2006.
|
|
Kevin Hannon
|
The DOJ and SEC allege that Hannon, former Chief Operating Officer for Enron Broadband, and others engaged in a scheme to inflate Enron's stock through fradulent activitiy related to Enron Broadband Services. Hannon sold broadband stock at prices that were inflated by $8 million.
|
Pleaded guilty in August 2004 to conspiracy to commit securities and wire fraud. He could face up to 5 years in prison.
|
|
Rex Shelby
|
The DOJ and SEC allege that Shelby and others engaged in a scheme to inflate Enron's stock through fradulent activitiy related to Enron Broadband Services. Shelby sold broadband stock at prices that were inflated by $35 million.
|
Trial ended in July 2005 with an acquittal of some of some insider trading charges. Mistrial declared on remaining charges, which include conspiracy, securities fraud and wire fraud and money laundering. Scheduled for a new trial in September 2006.
|
|
Scott Yeager
|
The DOJ and SEC allege that Yeager and others engaged in a scheme to inflate Enron's stock through fradulent activitiy related to Enron Broadband Services. Yeager sold broadband stock at prices that were inflated by $55 million.
|
Trial ended in July 2005 with acquittal on all fraud and conspiracy charges. Mistrial declared on remaining charges of insider trading and money laundering. Scheduled for a new trial in June 2006.
|
|
Kevin Howard
|
Faces a criminal indictment relating to a video-on-demand partnership with Blockbuster. "Project Braveheart" improperly booked $111 in revenue, when it really had accomplished nothing at all.
|
Trial ended in July 2005 with the jury deadlocked on all of the charges against him, which included conspiracy, fraud and money laundering. Mistrial declared and new trial scheduled for May 2006.
|
|
Michael Krautz
|
Also faces criminal charges stemming from the fraudulent "Project Braveheart".
|
Tried ended July 2005 with the jury deadlocked on conspiracy and fraud charges against him. Mistrial declared and new trial scheduled for May 2006.
|
|
Paula Rieker
|
Former Enron Corporate Secretary, she may soon (May 2004) settle several charges with the SEC and cooperate in further investigations.
|
The SEC charges Rieker with insider trading and deliberately misleading investors about the financial health of the company’s energy services and broadband business units. The SEC said that under a settlement, Rieker agreed to be barred from acting as an officer or director of a public company and to repay nearly $500,000 the government alleges she earned through insider trades. The SEC brought action in coordination with the U.S. Department of Justice’s Enron Task Force, which files a related criminal charge against Rieker. She could face up to 10 years in prison but her cooperation with prosecutors is likely to make the judge more lenient. Rieker was sentenced to two years of probation on Oct. 6, 2006.
|
