Ex-Duke Energy Trader Pleads Guilty To Falsifying Books
02-10-05 08:28 PM EST
SAN FRANCISCO (Dow Jones)--A former natural gas trader at Duke Energy Corp. ( DUK) pleaded guilty Thursday to falsifying books and agreed to cooperate in the prosecution of two former officers at Duke.
Brian Lavielle, 34, of Houston pleaded guilty in U.S. District Court in Houston to the criminal charge, U.S. Attorney Michael Shelby said. He faces a maximum sentence of twenty years imprisonment and a fine of $5 million. Sentencing has been set for December 9, the U.S. Attorney's office said.
Lavielle and two former officers of Duke Energy subsidiaries were indicted last April for using bogus trades to make the company appear more profitable than it was. A grand jury charged them with racketeering, conspiracy, wire and mail fraud, money laundering and falsifying corporate books. The other two defendants are former vice presidents Timothy Kramer, 40, and Todd Reid, 41.
Lavielle agreed to plead guilty and cooperate in the other cases in exchange for his dismissal from the April indictment.
The original indictment alleged that more than 400 bogus "roundtrip" trades resulted in $50 million in fraudulent profits for Duke Energy North America, Duke's energy trading and merchant power subdivision. In 2001, Duke paid bonuses in cash and stock of $5 million to Reid, $4 million to Kramer and $340,000 to Lavielle.
Duke cooperated with the U.S. Attorney on the case, a Duke Energy spokeswoman said Thursday. All three employees had left Duke before last April, and Duke forwarded the results of its internal investigation to the U.S. Department of Justice. Duke has said that it may seek restitution of the bonuses pending resolution of the criminal proceeding.
"We remain committed to restoring the public's faith and confidence in the marketplace and remain resolute in our joint efforts to hold corporate criminals accountable for their conduct," U.S. Attorney Michael Shelby said.
During Thursday's hearing, Lavielle said that his former supervisor and alleged co-conspirator asked him to break up portions of trades into smaller portions when entering them into the books and to enter them with slightly different prices, the U.S. Attorney's office said. These steps - part of the April indictment's conspiracy charges - were taken to conceal the alleged scheme.
-By Mark Golden, Dow Jones Newswires; 415-765-6118; mark.golden@dowjones.com