- The Washington Times - Thursday, January 22, 2004

HOUSTON (AP) — A former Enron Corp. accountant described as “a principal architect” of a scheme to mislead investors and regulators surrendered to authorities yesterday and pleaded not guilty to federal fraud charges related to the energy giant’s 2001 collapse.

Richard Causey, 44, entered his plea before U.S. Magistrate Judge Frances H. Stacy. He was released on $1 million bond, secured by $500,000 in cash provided by a brother-in-law.

When asked whether he was employed, Mr. Causey replied: “I am not.”

Mr. Causey, who surrendered to the FBI before daybreak and was taken to court in handcuffs, was described in a six-count indictment unsealed yesterday as “a principal architect and operator of the scheme to manipulate Enron’s reported earnings.” He was charged with securities fraud and conspiracy to commit securities fraud.

If convicted of all charges, Mr. Causey faces a maximum sentence of 55 years in prison and $5.25 million in fines.

The indictment handed up Wednesday said Mr. Causey, along with other Enron executives and senior managers, “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.”

The document noted that Mr. Causey reported to Enron’s chairman and chief executive officer but did not name former Enron Chairman Kenneth L. Lay or former CEO Jeffrey Skilling. Neither of them has been charged with any crime.

The indictment said the scheme’s objectives, among other things, were to produce earnings that grew by 15 percent to 20 percent annually and meet or exceed “without fail” the published expectations of industry analysts while avoiding public reporting of large losses.

Mr. Causey’s trial was set for March 8. Prosecutor Sam Buell estimated the trial would take three to six weeks.

Also yesterday, the Securities and Exchange Commission filed a civil complaint accusing Mr. Causey of helping Enron file fraudulent information with the agency.

“Rick Causey is a decent, honorable and innocent man,” said Mark Hulkower, his attorney. “He has done nothing, absolutely nothing, wrong. We will vigorously contest these charges and we look forward to the day when Mr. Causey’s vindicated in this courthouse.”

Mr. Causey 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 wife Lea hit a snag.

Last 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 Mr. Causey, sources close to the investigation said Wednesday on the condition of anonymity.

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