Former Enron Investor Relations Supervisor and Corporate Secretary Paula
Rieker received a sentence of two years probation from Judge Melinda Harmon of
the US District Court for the Southern District of Texas in Houston on October 6.
Rieker's probation sentence compares favorably with the
two-and-a-half-year sentence handed down in early September to former Enron
North America and Enron Energy Services CEO David Delainey and the six-year
sentence given to ex-Enron CFO Andrew Fastow on September 26. Rieker testified
at the trial of ex-Enron CEO Jeffrey Skilling and former Chairman Kenneth Lay.
US government lawyers filed October 3 a motion for a "downward departure
from the advisory sentencing guidelines," which Judge Harmon used to sentence
Rieker. The government's motion was signed by Sean Berkowitz and John Hueston,
the lead prosecutors from the Enron Task Force who argued the case against
Skilling and Lay.
On May 25, a jury found Lay guilty of six counts of Enron-related
offenses, plus four counts of personal bank fraud. Lay died of an apparent
heart attack on July 5. Skilling was found guilty on 19 of 28 charges. He is
due to be sentenced October 23 by US District Judge Sim Lake.
On May 19, 2004, Rieker -- who had worked for Mark Koenig, Enron's head of
investor relations -- entered a guilty plea to one count of insider trading,
which carries a maximum sentence of 10 years in prison.
The government said in its October 3 motion that Rieker had "carefully
detailed at trial how, on the eve of an earnings release, she discovered that
Enron would miss by one penny a newly revised consensus expectation by stock
analysts."
Rieker "provided the jury with a key recollection of Skilling's
involvement in tailoring and amending a press release in a manner that misled
the investing public," the government said.
They added: "Together with the testimony of her supervisor Mark Koenig,
Rieker provided compelling accounts of how those statements materially misled
investors."
In the motion, the government added that Rieker "provided particularly
powerful evidence" in the government's case against Lay. They told Harmon that
Rieker was "the first government witness to address broadly Lay's involvement
in misrepresenting the true financial state of Enron."
"For instance, she described unheeded warnings to Lay that he was
misleadingly describing the true nature of profits from Enron Energy
Services," the company's retail electricity unit, it said.
"Most importantly, as the former Enron Corporate Secretary during the
critical third and fourth quarters of 2001, she deciphered for the jury
comprehensive and detailed notes of interactions between Lay and fellow board
members," the government said in the motion.
"After Rieker agreed to cooperate, her supervisor, Mark Koenig, entered
into a cooperation agreement of his own. Koenig, in turn, proved to be one of
the most credible witnesses at the trial of Lay and Skilling," the government
said.
Koenig pleaded guilty in August 2004 to aiding and abetting securities
fraud. He faces up to 10 years in prison and a fine of $1 million. Koenig is
set to be sentenced by US District Judge Ewing Werlein in Houston on November
17 at 10:30 am CST.
October 6, 2006
Return to top
Next Page: Fastow gets 6 years for Enron debacle role
Printer-friendly format