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(Photo: AP)
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Enron's former chief accounting officer, Causey handled Enron audits for Arthur Andersen LLP before joining Enron. When the LJM investments were proposed to Enron's board of directors in 1999, he and chief risk officer Rick Buy were assigned to review all Enron transactions with LJM. Causey was fired Feb. 14, 2002, after the release of an in-house report noting his failure to review the deals. He is mentioned repeatedly by title in Andrew Fastow's indictment as having a secret agreement with Fastow that LJMs would never lose money on deals with Enron. He told David Duncan, the top Enron auditor at Arthur Andersen, that Enron didn't like another Andersen auditor's objections to grouping investment vehicles known as Raptors to hide that two of the four were bleeding cash.
Causey is alleged to have sold about 209,000 Enron shares for $13.3 million. He also received bonus payments of more than $1.5 million from 1997-2000, when Enron was inflating profits and hiding debt based largely on the partnerships he was supposed to police.
An indictment charging him with conspiracy and fraud was unsealed Jan. 22, 2004. It was later expanded to include increased charges against him and new charges against Skilling: 35 counts for Jeffrey Skilling, 31 counts for Causey.
On Dec. 28, 2005, he pleaded guilty to securities fraud in return for a seven-year prison term. If prosecutors are satisfied with his cooperation, the term could be reduced to five years.
In a five-page statement, Causey admitted that he and other senior Enron managers made various false public filings and statements. He also agreed to turn over $1.25 million to the government and agreed to help pursue convictions against Enron founder Kenneth Lay and former Chief Executive Jeffrey Skilling as part of his plea deal.
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