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Wednesday, November 27, 2002

Midlevel Enron Corp. executive pleads guilty to filing false tax return

By KRISTEN HAYS

Associated Press Writer

HOUSTON (AP) - A midlevel executive for Enron Corp.'s defunct broadband unit pleaded guilty Tuesday to filing false tax returns that failed to identify more than $79,000 in income from 1997 to 2000.

Larry Lawyer, 34, became the fourth person federal prosecutors have secured a guilty plea from in their ongoing probe of Enron. The company filed for bankruptcy in December after revelations about years of inflated profits and hidden debt.

Enron's collapse was only the first in a series of corporate scandals that sent investors fleeing from a volatile stock market. Enron's stock collapse destroyed employee retirement accounts, and the bankruptcy cost more than 4,500 workers their jobs.

Lawyer, who was among thousands of employees laid off the day after Enron filed for bankruptcy protection, faces up to three years in prison and a fine of up to $250,000. He is scheduled to be sentenced in February.

After a brief appearance before U.S. District Judge Kenneth Hoyt, Lawyer was released on $50,000 bond.

The tax evasion charge stems from a 1997 deal to sell wind farms Enron owned in California.

The wind farm buyers were friends of former Enron chief financial officer Andrew Fastow and his aide, Michael Kopper.

Lawyer's attorney, Robert Sussman, said his client was working for Enron Capital Trade when he was involved in handling the wind farm sales. Kopper gave Lawyer four payments, one per year between 1997 and 2000, which he called gifts, Sussman said. The payments totaled $79,468.23. Of that amount, Lawyer owed the federal government more than $29,000. He admitted Tuesday that he did not report the money.

"Even if Mr. Kopper told him it was a gift, he should have reported it," Sussman said. "This is a fairly simple tax case."

Lawyer plans to give the $79,000 to former Enron employees through a relief fund set up for the thousands of employees who lost their jobs and retirement accounts.

"We don't want to have the money," Sussman said. "We want to give it to somebody. We decided the most appropriate place was the ex-Enron Employees Relief Fund. They need it the most."

Prosecutor Tom Hanusik declined to comment.

Others who have pleaded guilty to charges as a result of the Enron probe are: Arthur Andersen's former auditor in charge of the Enron account, David Duncan, who pleaded guilty to obstruction; Kopper, who pleaded guilty to wire fraud, conspiracy and money laundering; and a former top Enron trader from Portland, Ore., Timothy Velden, who pleaded guilty to wire fraud for scheming to manipulate the California energy market.

from the Reporter-News