Running head: EVIDENCE OF FRAUD 1

Evidence of Fraud

Lorenze Salas

Professor Aaron Jones

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Evidence of Fraud

Brief Background

Kenneth Lay founded Enron Corporation in 1985 after merging Houston Natural Gas

Corporation and InterNorth, Inc. natural gas companies. In the earlier 1900s, the company lost to

operate their pipelines when the U.S. Congress decided to deregulate the sale of natural gas.

Jeffery Skilling, who later become a CEO of the company, opted “a trader of

energy derivative contracts, acting as an intermediary between natural-gas producers and their

customers” (Bondarenko, n.d.). Under Jefferey Skilling’s role, the company started to take over

the market for natural gas and generating gigantic profits during their trades. Additionally,

Skilling decided to hire MBA programs top candidates around the world and created a

competitive company environment.

After 16 years when the Enron Corporation was founded, the company filed for Chapter

11 bankruptcy after being investigated on the Bondarenko financial statements by number of

analysts. When the details of accounting fraud were announced, the stock price dramatically

decrease from $90 to less than $1. Many of the Enron executives, including Jefferey Skilling,

were charged with fraud and sentenced to prison. Then several civil lawsuits were filed against

Enron and Arthur Andersen LLC. Bondarenko refers “The scandal resulted in a wave of new

regulations and legislation designed to increase the accuracy of financial reporting for publicly

traded companies. The most important of those measures, the Sarbanes-Oxley Act (2002),

imposed harsh penalties for destroying, altering, or fabricating financial records” (Bondarenko,

n.d).

Autopsy Report
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I extract the file from Enron Email dataset, I opened the Autopsy application and fill out

information to go further the next step. Then created a Logical Files as the data source and

configure the ingest module. After waiting for a few hours to analyze the files from the

“2018487913 mailidir folder”, there was about

150 client’s folder which contain valuable

information on what happened with the 2001

Enron scandal. Additionally, 413138

email addresses were listed in the results.

In the client’s files, “lay-k” (who founded Enron) has about 1126 deleted_items and 1127

all_documents, which can be suspicious when investigating different clients within the company.

In the “deleted_items”, it states that:

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within almost thousands of documents towards other people’s addresses and email.
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To identify the fraud charges, I search “fraud” via keyword search, it resulted with 1024 total

searches. According to Investopedia, Troy Segal listed the types of frauds:

 “Conspiracy fraud

 Insider trading

 Securities fraud

 Wire fraud

 Bank fraud” (Segal, 2021).

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References

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