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The Enron implosion has brought a team of Dechert litigators to center stage as the firm has spent the last nine months representing former managing director Michael J. Kopper, who pleaded guilty Thursday to money laundering and conspiracy to commit wire fraud. Kopper is the first Enron executive to reach such an agreement with the U.S. Justice Department’s Enron Task Force, which will now be aided in its attempts to build criminal cases against other top officers. Kopper fingered his boss, Enron chief financial officer Andrew Fastow, as a co-conspirator, though Fastow has not been indicted as of yet. According to Dechert litigation partner David Howard, Kopper was referred to Washington, D.C.-based partner Wallace Timmeny late last year. Howard said Enron executives need a firm with expertise and depth in securities enforcement and white-collar criminal defense. Timmeny, the former deputy director of enforcement for the U.S. Securities and Exchange Commission, has a national securities enforcement practice. Howard, though, was brought in from the Philadelphia office to handle the criminal aspect of the representation. An Assistant U.S. Attorney from 1987 to 1994, Howard has been brought in to several corporate mismanagement cases by the firm’s SEC enforcement team, including the recent indictment of Rite Aid executive Timothy Noonan. Timmeny was assisted on SEC matters by Dechert partner Vincent Badolato and counsel Edward Horahan III, both of whom work out of the Washington office. Howard solicited the help of two criminal defense attorneys from outside the firm, solo practitioner Creed Black and Ballard Spahr Andrews & Ingersoll partner Eric Sitarchuk. Howard declined to discuss the firm’s role in the case but did release a public statement Wednesday on Kopper’s behalf in which he said his client was remorseful and taking steps to offer restitution to those affected by his behavior. “Today, Michael Kopper has taken personal responsibility for his role in the Enron tragedy,” Howard said. “Michael has misused his position at Enron to enrich himself and others, and in so doing violated his duties as an Enron employee.” In the plea agreement, a criminal conspiracy between 1997 and 2001 was outlined in which Kopper said he and Fastow and other colleagues used a series of Enron partnerships to help disguise the depth of the company’s debt and declining profits as well as to obtain millions of dollars from those involved. Kopper is scheduled to be sentenced April 4, 2003, and could face up to 15 years in prison and a fine of up to double the amount eventually determined to have been gained through fraudulent means. But if prosecutors believe he has cooperated sufficiently with their investigation, they could argue for a more lenient sentence. He agreed to forfeit $12 million in gains that he admitted he illegally took through a series of transactions with Enron-related partnerships that federal prosecutors say he and Fastow controlled. In addition, the SEC announced that it had filed a settled civil complaint against Kopper, accusing him of securities fraud. Of the money forfeited by Kopper, $8 million will be collected by the SEC and placed in a restitution fund for Enron investors and $4 million will be turned over to the Justice Department. Kopper is also barred from serving as an officer of any U.S. public company. Howard said the recent wave of corporate mismanagement cases represents the federal government’s latest enforcement strategy, which, he observed, changes in focus every so often. In the 1980s, for example, there was defense contract fraud and savings and loan fraud. And in recent years, there was heightened awareness of health care fraud. “What you’re seeing now is a switch to a new enforcement priority — general corporate and securities,” Howard said. “The government creates all sorts of task forces to deal with the latest issue. And this is the flavor of this decade. When problems like this turn into a political problem, it’s inevitably going to become an enforcement priority.” And Howard predicted that SEC and white-collar criminal defense litigators would have busy schedules over the next few years, as he expects more emphasis to be placed on compliance issues for CEOs certifying financial reporting documents. He said that representation of corporate boards and audit committees would be heightened as those entities seek independent counsel. Enforcement matters that were once dealt with quietly will now be handled more aggressively, Howard said. He said the government would be less flexible about what agreements it negotiates with corporate entities.

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