First sentencing coming Monday

Houston Chronicle

Former Enron finance worker has pleaded guilty

By JOHN C. ROPER

June 25, 2006, 11:52AM

Copyright 2006 Houston Chronicle

 

When Lawrence Lawyer stands before a federal judge on Monday, he’ll be the first of 14 former Enron workers scheduled to be sentenced before the end of the year.

Typically, defendants such as Lawyer, who have pleaded guilty and agreed to cooperate with the government, are sentenced after the main defendants they helped to convict. In this case, however, Lawyer is one of nine with plea deals scheduled to be sentenced before former Enron CEO Jeff Skilling and former Chairman Ken Lay, whose sentencings were first scheduled for Sept. 11 but have been pushed to Oct. 23.

“Usually, those sentencings take place long after the main defendants have been sentenced,” Houston defense attorney David Berg said. Lawyer, a 38-year-old Houston resident, admitted before U.S. District Judge Kenneth Hoyt in November 2002 that he failed to report to the Internal Revenue Service $79,469 he received from then-Enron executive Michael Kopper, a lieutenant of former Enron finance chief Andrew Fastow.

Lawyer’s attorney, Bob Sussman, declined comment.

The money was paid to Lawyer between 1997 and 2000 for his work on a partnership called RADR, one of several of Fastow’s side deals at Enron. Prosecutors called the payments to Lawyer “kickbacks,” but Lawyer has said he incorrectly considered the money to be “gifts.”

According to Justice Department documents, Kopper, Fastow and others at Enron “devised a scheme secretly to enrich themselves through the sale of Enron’s interest in the wind farms” to special partnerships they created.

The government claims as much as $4.5 million was skimmed through the transaction, which was unknown to Enron and came at the company’s expense.

For his work on closing the RADR transaction, Lawyer and his family received four checks over four years from Kopper. They included payments of $24,015.50 in 1997; $8,209.03 in 1998; $8,222.90 in 1999; and $39,021.40 in 2000. In his plea agreement on Nov. 26, 2002, Lawyer agreed to cooperate in the Enron investigation in exchange for the possibility of a lighter sentence. Exactly what information or the degree of help he provided has not been made public. Lawyer never testified in court.

Lawyer faces a maximum of three years in prison and up to a $250,000 fine for filing a false tax return.

Such deals are a scourge to defense attorneys. Skilling lawyer Daniel Petrocelli frequently referred to them during the Enron trial as “legal bribery” that coerces witnesses into fabricating testimony.

In all, 11 with deals are scheduled to be sentenced this year. Although Lawyer will be sentenced before Skilling and Lay, some defense attorneys believe the cooperators can reap some benefit by following the sentencings of Lay and Skilling.

“I think you’re going to find there’s going to be a drop-off in attention on the Enron case after that, and I would want to come in the aftermath of the drop-off where nobody really pays attention anymore,” said Jim Parkman, a defense attorney from Alabama. Parkman – who represented Richard Scrushy in the high-profile HealthSouth case where the former CEO was acquitted of directing a massive $2.7 billion earnings overstatement – said the decreased spotlight can help bring about a more lenient sentence.

A courtroom without the media glare “takes a lot of heat off the judge,” Parkman said. “They are going to say they don’t have any heat, but let’s face reality. When you’ve got a courtroom packed with reporters, the judge knows the next morning he’s fixing to be plastered all over the paper,” Parkman said.

After the sentencing of Skilling and Lay, Parkman believes judges “can probably take a little better approach to listening to some arguments about leniency.” For most if not all of the cooperators, however, that will probably be moot as Lay and Skilling are apt to seek further delays in their sentencing dates.

“I would be surprised if they get sentenced before the end of the year,” said Michael

Wynne, a former federal prosecutor who is now a Houston defense attorney. The other defendants are likely eager to move on with their lives and not seek further delays, Wynne said.

It’s not uncommon for sentencing dates to change several times. Just this month, the sentencings of former Enron executives Paula Rieker and David Delainey were rescheduled. They were supposed to be sentenced after Lawyer, in July, but will now face a judge in September.

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