The prosecution has rested in the ninth week of the government's fraud and conspiracy trial of former Enron chairman Kenneth Lay and chief executive Jeffrey Skilling.
In Houston, U.S. District Judge Sim Lake dismissed two counts of securities fraud and one count of lying to auditors against Skilling, who still faces 28 other criminal counts. One count of securities fraud against Lay was also dropped. He still faces six counts. The charges were dropped because the crimes were alleged to have taken place during the first quarter of 2000, a time period for which prosecutors presented no evidence.
The government called 22 witnesses during its case, including former top executives Andrew Fastow, David Delainey and Ken Rice, who all testified that Skilling and Lay knew of the improper financial deals inside Enron that were used to hide billions of dollars in debt while inflating revenues.
The prosecutors' final witness was Joanne Cortez, a former Enron employee who oversaw a line of credit the company had set up for Lay. Attorneys for Skilling and Lay are expected to begin presenting their cases on Monday. Both defendants are expected to testify.
Separately, two former Enron Corp. employees will each shell out $30,000 in civil fines to settle earnings manipulation charges brought by the Securities and Exchange Commission.
David Leboe, 38, an accountant, and Dale Rasmussen, 46, an attorney, neither admitted nor denied the charges. Leboe is suspended from auditing any public company for at least five years and Rasmussen is barred from working as an attorney for a public company for at least three years.
The fines will go into a fund for Enron shareholders.According to the SEC's suit, Leboe and Rasmussen allegedly conspired to skirt accounting rules and prematurely book revenues related to the 2000 sale of Coyote Springs II, a project involving equity interest in an Oregon power plant, a construction contract to build the plant and a turbine for the plant. The men allegedly used side deals to conceal their own cut of the profits from the Arthur Andersen audit team.
