Ex-Enron CFO settles fraud allegation

WASHINGTON: Enron's former Chief Financial Officer will pay $ 300,000 to settle allegations that he helped the company commit fraud, federal regulators have said.

Jeffrey McMahon, who neither admitted nor denied the Securities and Exchange Commission allegations, also will be barred from serving as an officer or director of a public company for five years, and will be suspended as an accountant for at least three years.

Under the agreement, which is subject to the approval of the US District Court, McMahon will pay disgorgement of $150,000 and a civil penalty of $150,000.

Tom Kirkendall, McMahon's attorney, said that his client "has long since moved on ... (and) appreciates the opportunity to put this matter behind him."

McMahon has been the president of Houston-based Zilkha Biomass Energy since 2004.

The SEC alleged that McMahon participated in the "sale" of an interest in Nigerian power generating barges to Merrill Lynch that allowed Enron to improperly report $12 million in earnings in the fourth quarter of 1999.

"Enron never should have recorded profits from this purported sale because the risks and rewards of ownership in the barges never passed to Merrill Lynch due to an oral side agreement made by McMahon and others," according to the SEC.

McMahon also made false and misleading statements to the national credit rating agencies regarding Enron's financial position and cash flow, the SEC alleged.