New York, Nov. 27: A former Enron executive who helped structure transactions with off-the-book partnerships pleaded guilty Tuesday to tax violations and agreed to co-operate with the criminal inquiry into the company’s collapse.
Appearing in the US district court at Houston, the executive, Lawrence M. Lawyer, admitted to filing false tax returns by failing to disclose what prosecutors described as kickbacks for his work on a partnership that was involved in an Enron wind-farm project.
In the court appearance, Lawyer admitted that he underreported his taxable income by more than $ 79,000 over the four-year period ended in 2000. That money mostly came in the form of payments funnelled to Lawyer in a deal structured by Andrew Fastow, Enron’s former chief financial officer, and Michael Kopper, another former finance executive.
Lawyer himself was a minor participant in the events that have enveloped Enron over the last year and the charge against him was the least serious of any brought to date, carrying a maximum prison term of up to three years.
However, the deal signals not only the strengthening of the government’s case against Fastow, who was indicted earlier this month on 78 felony charges, but also underscores the expanding inquiry into events at Enron’s broadband unit. That division was opened with hopes of huge financial benefit to the company but ended with little but losses.
Already, people involved in the case said Lawyer has provided statements about dealings in the broadband unit, providing leads for the investigation. He joins another executive, Timothy N. Belden, a former senior trader, who provided evidence about the broadband division as part of his co-operation agreement after pleading guilty to charges that he conspired to illegally manipulate the California energy market. After his brief appearance Tuesday before Judge Kenneth Hoyt, Lawyer, 34, was released on $ 50,000 bond.
The transaction that resulted in Lawyer’s guilty plea has already played a prominent role in the Enron criminal investigation.