Risk Management

Guilty Plea in New Enron Scandal

The culture of corporate greed continues at Enron, but this time it is limited to a single executive.
Stephen TaubDecember 18, 2006

In a case unconnected to the initial fraud that brought down the company, a former member of Enron Corp.’s human resources department pleaded guilty to defrauding the company of about $3 million, according to the Associated Press.

Christian Deeb Rahaim, formerly senior director of benefits, admitted that in June 2005 he concocted a scheme in which he presented Enron a fraudulent bill of nearly $1.2 million for consultation services, according to the wire service. He admitted to then putting the money into accounts that he controlled to pay off personal debts and buy a $500,000 home in suburban Houston, according to the report.

The scheme was discovered by Enron in November 2005 when employees of Bank One questioned Rahaim’s attempt to transfer another $1.8 million that Enron had recently wired to that bank, according to the report. Rahaim faces up to 20 years in prison and faces a fine of up to $250,000, or twice the amount of the loss to Enron, the AP noted.

The scheme is not connected to Enron’s 2001 bankruptcy. Rahaim is scheduled to be sentenced on March 26, according to the report.

4 Powerful Communication Strategies for Your Next Board Meeting