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WASHINGTON, D.C. - Deputy Attorney General James B. Comey, Assistant Attorney General Christopher A. Wray of the Criminal Division, Enron Task Force Director Leslie R. Caldwell and Assistant Director Grant Ashley of the FBI’s Criminal Investigative Division announced today that Enron’s former chief accounting officer, Richard Causey, has been charged with securities fraud and conspiracy.

Causey, 43, of The Woodlands, Texas, was charged in a six-count indictment returned by a federal grand jury in Houston yesterday. Causey surrendered this morning to agents of the Federal Bureau of Investigation in Houston. Causey is scheduled to appear later today before U.S. Magistrate Judge Frances H. Stacy of the United States District Court for the Southern District of Texas.

“Richard Causey and the other corrupt executives that ran Enron into the ground used some of the most sophisticated tricks in the corporate fraud playbook to con the public into believing that Enron was a success,” said Deputy Attorney General and Chair of the President's Corporate Fraud Task Force, James B. Comey. “As today’s action shows, the government is committed to using the full legal arsenal of the Justice Department and its partners on the President's Corporate Fraud Task Force to ensure that all those responsible for Enron's collapse are brought to justice.”

“The dominoes continue to fall as we expose the truth about the massive fraud at Enron,” added Assistant Attorney General Christopher A. Wray. “On the heels of guilty pleas by Enron’s former chief financial officer and treasurer, today’s indictment demonstrates that the same tried and true law enforcement methods that we use against drug cartels and organized crime families will also penetrate the most complex corporate fraud scheme.”

Richard Causey was Enron’s chief accounting officer from 1998 until the end of 2001, when Enron collapsed. Causey reported to Enron’s Chief Executive Officer, and worked with Enron’s Chief Financial Officer Andrew Fastow and Treasurer Ben Glisan. The indictment filed today charges Causey in a scheme to fraudulently manipulate Enron’s publicly reported financial results and artificially inflate its stock price. The indictment describes how Causey, Andrew Fastow and other Enron senior managers allegedly employed a variety of deceptive devices, ranging from use of improper financial structures to manipulation of reserve accounts and business segment reporting, to produce consistent financial results that would meet investment analysts’ expectations but did not truthfully reflect the condition of Enron’s businesses.

These devices included a series of fraudulent “hedging” structures known as the “Raptors” which formed the basis of guilty pleas of both Andrew Fastow and Ben Glisan. The Raptors were designed to allow Enron to lock-in the values of many of its volatile, poorly performing and fraudulently inflated assets on its public financial reports, and to ensure that the company would not have to report expected future losses in the value of many of those assets. Causey implemented the “Raptors” by allegedly entering, on behalf of Enron, into an improper and undisclosed side agreement with Fastow. As alleged in the indictment, Causey guaranteed that LJM would receive the return of its money plus a large profit for providing Enron with the fictitious “outside” funding that would be required for Enron to claim that the “Raptors” did not have to be consolidated in Enron’s financial statements. In return, Fastow ceded effective control over the Raptors to Enron. Consequently, as Causey and Fastow allegedly knew, the “Raptors” never qualified for the accounting treatment Enron gave them because the “outside” funding by LJM was not at risk and LJM never exercised the requisite control over the Raptors that was necessary for them to be off Enron’s balance sheet.

The indictment charges Causey with five counts of securities fraud and one count of conspiracy to commit securities fraud. If convicted, Causey faces a maximum sentence of 55 years in prison and a $5,250,000 fine on the six charges contained in the indictment.

Enron, at one time the seventh-ranked company in the United States with stock trading as high as $80 per share in August 1999, filed for bankruptcy protection on Dec. 2, 2001 and its stock became virtually worthless.

The investigation into Enron’s collapse is being conducted by the Enron Task Force, a team of federal prosecutors supervised by the Justice Department’s Criminal Division and agents from the FBI and the IRS Criminal Investigations Division. The Task Force also has coordinated with and received considerable assistance from the Securities and Exchange Commission. The Enron Task Force is part of President Bush’s Corporate Fraud Task Force, created in July 2002 to investigate allegations of fraud and corruption at U.S. corporations.

Twenty-eight individuals have been charged to date, including 20 former Enron executives. Ten defendants have been convicted to date. In addition, the Task Force has restrained more than $95 million in proceeds derived from criminal activity. The Task Force investigation is continuing.