Dynegy going down next like Enron?

And to think I almost got a job with this company...

http://www.nytimes.com/aponline/business/AP-Dynegy-Execs-Indictment.html

HOUSTON (AP) -- Three former Dynegy Inc. executives were charged in a federal indictment unsealed Thursday with conspiracy and fraud for their roles in accounting transactions that regulators say improperly boosted the energy company's cash flow and lowered its taxes.

In addition, the Securities and Exchange Commission filed a civil lawsuit agsinst the three people.

``These defendants are accused of withholding the truth about Dynegy's true fiscal condition from the SEC, shareholders and the public,'' U.S. Attorney Michael Shelby said.

Named in the indictment were Jamie Olis, 37, Dynegy's former senior director of tax planning; Gene Shannon Foster, 44, former vice president of tax; and Helen Christine Sharkey, 31, a former member of Dynegy's risk control and deal structure group.

Each is charged with conspiracy, securities fraud, mail fraud and wire fraud and was to appear later Thursday before a federal magistrate. If convicted of all charges, each defendant would face a maximum of 35 years in prison and fines of up to $2.25 million.

Last September, Dynegy agreed to pay the SEC $3 million to settle the commission's investigation of a natural gas deal -- dubbed Project Alpha -- which improperly boosted the company's cash flow. The federal government alleges Olis, Foster and Sharkey created Project Alpha to make Dynegy's books look better and deliberately kept it from auditors at Arthur Andersen.

Shelby said Project Alpha was a $300 million short-term loan secured during the last nine months of 2001 which created the appearance of improved cash flows for Dynegy. He said Olis, Foster and Sharkey agreed to buy gas from ABG Gas Supply LLC, which was backed by several banks, at a $300 million discount with the secret promise the banks would be repaid plus interest. The money was repaid in 2002, Shelby said.

Auditors from Arthur Anderson told Olis, Foster and Sharkey they would have to report such a transaction as debt, so the trio made sure to conceal the agreement from the accounting firm, Shelby said. He said the investigation of Project Alpha was continuing.

Rob Doty, who resigned a year ago as Dynegy's chief financial officer, publicly had defended the project.

The SEC said the $300 million should have been identified as financing rather than cash flow on Dynegy's annual filing for 2001 and that the company overstated net income by the same amount as the tax benefit. Dynegy agreed to settle the investigation without admitting to or denying the agency's allegations of securities fraud.

Dynegy, in a statement released after the indictments were announced, said the company remained ``committed to complete cooperation with the U.S. Attorney's office in Houston and other governmental agencies'' to resolve ``past issues.''

``Dynegy has been, and will continue to be, committed to restoring the confidence of all stakeholders,'' Dynegy said.

In midday trading on the New York Stock Exchange, Dynegy shares were up 8 cents at $4.28.

Earlier this year, another former Dynegy worker was indicted on an unrelated charge of reporting 43 fake trades on three occasions from November 2000 to February 2001 to an industry newsletter, ``Inside FERC Gas Market Report.''

 

Wow, and to think at the end of 2000...early 2001, if you were an IT person looking for a job, those were the companies to go to. Now, they are worthless crap. Is Reliant and El Paso on it's way too?