Enron Accountant Settles, Will Cooperate

Ex-chief accounting executive Wesley Colwell was accused of fraud violations.
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The

Securities and Exchange Commission

charged

Enron's

(ENRNQ)

former chief accounting executive, Wesley H. Colwell, with violating antifraud laws.

Without admitting or denying any wrongdoing, Colwell agreed to be barred from acting as an executive of a public company and will pay $300,000 in disgorgement and a $200,000 penalty, while still cooperating with the SEC probe into the fallen energy company.

"Colwell, along with others at Enron, engaged in a wide-ranging scheme to defraud by manipulating Enron's publicly reported earnings through a variety of devices designed to produce materially false and misleading financial results," the SEC said in a statement.

Those devices involved improper use of reserves to manage earnings, hiding losses in the company's retail business, fraudulently inflating assets and improperly avoiding writedowns, according to the statement.

Colwell conceivably could be useful in the government's case against former CFO Andrew Fastow, the highest-ranking Enron executive to be charged either criminally or civilly in the scandals. Fastow, one of the alleged masterminds behind Enron's scheme to inflate its earnings, is scheduled to go on trial next April on a raft of federal securities fraud charges.

In September, prosecutors charged three former

Merrill Lynch

(MER)

investment bankers with helping Enron manufacture a profit in late 1999 through the bogus purchase of energy equipment. Days before that, former Enron Treasurer Ben Glisan was sentenced to five years in prison after admitting his role in cooking the company's books.