FOR IMMEDIATE RELEASE TUESDAY, NOVEMBER 26, 2002 WWW.USDOJ.GOV CRM (202) 514-2008 TDD (202) 514-1888 WASHINGTON, D.C. A former finance executive of the Enron Corporation pleaded guilty in federal court in Houston, Texas, today to a one-count criminal information charging him with filing a false income tax return and failing to report taxable income on kickbacks received while he was employed at Enron.
Lawrence M. Lawyer, a resident of Houston, entered the plea before Judge Hoyt at U.S. District Court in Houston. The plea agreement requires Lawyer to cooperate with prosecutors from the Justice Department's Enron Task Force, which is investigating the collapse of Enron, once the seventh-largest corporation in the United States.
According to the criminal information filed along with the plea agreement, Lawyer held various positions at Enron between 1996 and 2001, and worked in the Enron Capital Management Group in 1997. In approximately May 1997, Lawyer was assigned to work on a transaction involving a "special purpose entity" known as RADR, which was established to purchase Enron's interest in a number of California wind farms. RADR was a limited partnership whose partners were known internally at Enron as "Friends of Enron" because they were friends of Enron executives.
The information states that RADR generated approximately $4.5 million in proceeds for the "Friends of Enron" between August 1997 and July 2000. Lawyer received approximately $79,468.83 in payments as taxable income for his work on the RADR transaction, disguised as gifts to Lawyer and his family. According to the information, Lawyer willfully failed to report payments from RADR on his tax returns for 1997, 1998, 1999 and 2000.
The charge of willfully making and subscribing to a false tax return, in violation of Title 26 USC Section 7206 (1) carries a maximum penalty of three years in prison. Lawyer's sentencing will be determined at a later date.
The Enron investigation is being led by the Enron Task Force, formed in January 2002 to investigate matters related to the collapse of Enron Corp. The task force consists of a team of federal prosecutors supervised by the Justice Department's Criminal Division and agents from the Federal Bureau of Investigation and the Internal Revenue Service's Criminal Investigation Division.
The Task Force has brought several charges in the Enron investigation. Former Enron Chief Financial Officer Andrew S. Fastow was indicted by a federal grand jury in Houston on Oct. 31 on 78 counts of wire fraud, money laundering and conspiracy. In August 2002, former Enron financial executive Michael J. Kopper pleaded guilty to conspiracy to commit wire fraud and money laundering. Former Enron energy trader Timothy N. Belden pleaded guilty in October 2002 to conspiracy to commit fraud by manipulating energy prices in the California market, and is cooperating with the government's ongoing investigation. And in September 2002, a federal grand jury in Houston returned an indictment charging three former British bankers with wire fraud in a scheme involving the Southampton special purpose entity.
On June 15, 2002, a federal jury in Houston convicted accounting firm Arthur Andersen LLP of obstruction of justice for destroying documents to keep them from the Securities and Exchange Commission, which had begun an investigation of Enron. Former Andersen auditor David Duncan also pleaded guilty to obstruction of justice in connection with his role in the destruction of Enron-related documents. 02-696
Source: US Department of Justice
