|
Plead guilty { August 21 2002 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A42253-2002Aug20.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A42253-2002Aug20.html
Ex-Enron Official Will Plead Guilty
First Case Against a Company Executive
By Carrie Johnson
Washington Post Staff Writer
Wednesday, August 21, 2002; Page A01
Former Enron Corp. executive Michael J. Kopper will plead guilty to financial wrongdoing as early as today and has agreed to surrender $12 million in the first criminal case against a company official, sources close to the investigation said yesterday.
Kopper, a former director in Enron's global finance unit, will plead guilty to single counts of conspiracy to commit wire fraud and conspiracy to commit money laundering, sources said. The Securities and Exchange Commission will file separate civil charges alleging that Kopper broke securities laws, sources said.
A Kopper plea would be the first admission of guilt by a former Enron official resulting from the Justice Department's eight-month probe of the company's downfall. More significantly, prosecutors intend to use Kopper's testimony to snare former Enron chief financial officer Andrew S. Fastow and former chief executive Jeffrey K. Skilling, according to sources close to the investigation.
As part of the deal, Kopper has agreed to cooperate with investigators, sources said.
Kopper served as a right-hand man to Fastow and was the architect of many of the off-balance-sheet partnerships that concealed millions in Enron debt. The unraveling of some of those secret partnerships led the company to spiral downward and eventually to file for bankruptcy protection last December -- touching off more than a dozen federal investigations and leaving shareholders and employees out billions of dollars.
Kopper's attorney, Edward B. Horahan III, declined comment, as did Justice Department and SEC spokesmen and a representative for Fastow. Skilling's attorney did not return phone calls.
Along with Fastow, Kopper allegedly helped three British bankers defraud their employer, National Westminster Bank PLC, of more than $7 million in connection with a stake in an Enron-related partnership in 2000, according to a criminal complaint filed by the Justice Department against the three bankers in late June. The complaint mentions notations from Kopper's work notebook, which ostensibly has been turned over to prosecutors.
Fastow and Kopper took part in meetings with the bankers to help them further their scheme and exchanged e-mail messages and letters with them, according to the complaint.
Legal experts said Kopper's plea deal could create problems for Fastow, considering the close business connection between the men.
"In my estimation, Fastow is what we call in the law 'dead meat,' " said David Berg, a Houston defense lawyer who is not involved in the case.
The off-balance-sheet partnerships enriched Fastow, Kopper and associates by more than $50 million, according to investigations by Congress and Enron's board. Indeed, Kopper and his domestic partner, William D. Dodson, reaped $10.5 million based on a $125,000 investment in a partnership called Chewco -- "an enormous financial windfall," according to an investigative report issued by Enron's board of directors earlier this year.
Kopper, who left the company last June, before signs of trouble became public, separately collected hundreds of thousands of dollars in salary and bonuses during his seven-year tenure at Enron -- as well as six-figure annual fees for managing the partnerships, a task that did not entail much work, according to the Enron board report.
A plea deal would potentially relieve some pressure on the Bush administration, which has drawn sharp criticism from members of Congress and others about the pace of the Enron investigation. Some executives at ImClone Systems Inc., Adelphia Communications Corp. and WorldCom Inc. already have been arrested for alleged white-collar offenses in recent weeks. The Justice Department's Enron task force already has won a criminal conviction against Arthur Andersen LLP, Enron's auditor, and secured a guilty plea from David B. Duncan, who managed the Enron account for Andersen.
Last week, Sen. Byron L. Dorgan (D-N.D.) wrote Attorney General John D. Ashcroft to ask why no Enron officials had yet been criminally charged.
"The Enron scandal was the corporate scandal first to be uncovered," wrote Dorgan, chairman of the Senate Commerce Committee's subcommittee on consumer affairs. "Yet the investors, the employees, and the American public have seen no action taken against those who were involved."
This summer, prosecutors and SEC investigators have intensified their interviews with members of the finance team and accountants at Enron, according to lawyers and other people familiar with the investigations.
Other Enron executives who profited from their investments in Enron-related partnerships, including Ben Glisan, former company treasurer, and Kristina Mordaunt, a onetime in-house lawyer at Enron, have been negotiating with prosecutors, sources said.
Kopper declined to testify before the House Energy and Commerce Committee in February, invoking his Fifth Amendment right against self-incrimination. He also turned down requests to talk with investigators representing Enron's board.
As part of the plea deal, reported yesterday afternoon by Bloomberg News, Kopper is likely to be given leeway at the time of his sentencing in exchange for the information he provides about other improper activities at Enron, according to sources familiar with the arrangement. Each conspiracy charge generally carries a five-year sentence.
Kopper, 37, is a native of New York's Long Island who attended Duke University and the London School of Economics. He and Dodson shared a home in Houston's ritzy Southampton Place neighborhood, where Fastow also lived. The locale later became the name of one of the controversial financial partnerships from which they profited.
Staff writer Susan Schmidt and researcher Richard Drezen contributed to this report.
© 2002 The Washington Post Company
|
|
