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Former top Enron accountant may be next

Prosecutors may now pursue criminal charges against a former top in-house Enron accountant not that Enron's former finance chief Andrew Fastow has pleaded guilty, sources have told The Associated Press.
/ Source: The Associated Press

Now that prosecutors have secured a guilty plea and cooperation from Enron Corp.'s former finance chief Andrew Fastow, criminal charges against the company's former top accountant won't be far behind, sources told The Associated Press.

Like Fastow, Enron's chief accounting officer Richard A. Causey answered directly to former Enron chief executives Kenneth Lay and his successor, Jeffrey Skilling.

Authorities were preparing a criminal complaint against Causey on charges stemming from the Justice Department's two-year investigation of the energy giant's collapse, people close to the investigation said last week, speaking on condition of anonymity.

But the parties involved in the guilty pleas from Fastow and his wife wanted those secured before moving on to Causey, the sources said. Snags in plea talks for Lea Fastow put any action against Causey on the back burner, the sources said this week.

With that now done, Causey could surrender as early as Friday, but more likely next week, the sources said.

In pleading guilty Wednesday to two counts of conspiracy to fraud, Andrew Fastow admitted that he and other senior managers fraudulently manipulated Enron's financial results.

His indictment, handed up in October 2002, also referred to the chief accounting officer as having a secret deal with Fastow ensuring that Fastow 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.

Fastow accepted a 10-year prison sentence and agreed to forfeit $23.8 million in cash and property. Lea Fastow pleaded guilty to one count of filing false tax forms. She is awaiting a judge's decision on whether to accept a plea agreement that would send her to prison for five months and keep her confined at home another five months.

Mark Hulkower, one of Causey's lawyers, didn't immediately return calls for comment Thursday. Justice Department spokesman Bryan Sierra declined to comment.

Causey's proximity to the former top executives at Enron could help prosecutors build cases against Skilling and Lay if he cooperates and has incriminating information. Neither Skilling nor Lay have been charged, and both have steadfastly denied wrongdoing.

Lay's attorney, Michael Ramsey, was slated to release a statement from his client Thursday afternoon.

Causey, who turned 44 last week, 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 worked his way up to executive vice president and chief accounting officer in 1999.

Enron imploded in late 2001 in a sea of hidden debt, inflated profits and accounting tricks that made the company appear much more financially stable than it was.

Causey was fired on Valentine's Day 2002 after an internal probe into Enron's collapse headed by University of Texas School of Law dean William Powers Jr. found that he and former chief risk officer Rick Buy failed in their duty to look out for Enron's interests when the company did deals with Fastow's partnerships.

Fastow pleaded guilty Wednesday to two counts of conspiracy for his role in the financial skullduggery that brought down the energy giant, leaving thousands of workers jobless and reducing stock that had once traded at $90 to pennies.