A former executive of the Enron Corporation, Michael Kopper, has pleaded guilty to criminal charges related to the financial collapse of the giant energy company. Mr. Kopper is the first person to be convicted in the aftermath of the energy giant's collapse.
During an appearance before a court in Houston, Texas, Kopper, 37, admitted to charges of money laundering and conspiracy to commit wire fraud.
Kopper, who is the former director of Enron Global Finance, also agreed to cooperate with authorities in their investigation of the collapse of the energy company.
The former executive also agreed to forfeit $12 million in illegally-obtained assets.
Kopper was a key aide to Enron's former Chief Financial Officer Andrew Fastow and in his guilty plea said his illegal activities were conducted under the direction of Mr. Fastow and in some cases in concert with him. Both men were at the center of controversial financial partnerships created to inflate Enron's profits and conceal debt, which led to the company's collapse into bankruptcy.
Prosecutors say Kopper used one partnership to earn $10 million on a $125,000 investment.
Legal observers say Kopper's guilty plea gives prosecutors a major break in the case and provides them with a former company insider who can testify against other Enron executives.
Mark Cohen, a New York attorney who specializes in defending clients accused of financial crimes, says other former Enron officials may now also decide to admit wrongdoing and cooperate with federal investigators.
"Well you know prosecutors have an expression, they call it 'the train is leaving the station,' and I think with Mr. Kopper's plea a lot of people are going to try and jump on that train," he said.
Deputy U.S. Attorney General Larry Thompson says he hopes Kopper's guilty plea and continuing high-profile investigations into corporate wrongdoing will help restore faith in U.S. businesses and financial markets.
"I think it is important that we do what the president has asked us to do in the Corporate Fraud Task Force and that is to help to restore the confidence by investors in our markets," he said. "Some of the investigations will lend themselves to some quick charges, rather quick charges, if appropriate. We do not want to do anything in any of these investigations to affect the integrity of the investigation. But we also want to make certain that we are thorough in the investigation and that all the bad actors are identified and appropriate steps taken to bring them to justice."
Enron filed for bankruptcy last December, in what was then the largest U.S. corporate bankruptcy in history. Billions of dollars were lost by investors, including thousands of Enron employees whose retirement funds were invested in company stock.