Fastows Expected To Reach Plea DealJan 8, 2004 | www.ft.com
Andrew Fastow, Enron's former chief financial officer, and his wife, Lea, are nearing a possible plea agreement with federal prosecutors under which Mr Fastow would plead guilty to crimes stemming from the Houston energy company's collapse and be sentenced to 10 years in prison.
Under the proposed deal, Mrs Fastow would serve a five-month sentence, allowing her to leave prison and care for their children before her husband begins his own incarceration.
The Justice Department and lawyers for the Fastows declined to comment on the negotiations yesterday, which were first reported by the Houston Chronicle. But people familiar with the talks said a deal could be announced as early as today.
The agreement would make Mr Fastow the highest-ranking former Enron executive to go to prison for his role in the energy company's spectacular 2001 collapse. However, it was not clear whether such a deal would help prosecutors build cases against the company's most senior executives, former chairman Ken Lay and former chief executive Jeff Skilling.
Some legal analysts doubted the Fastows had much to offer the government, citing the severity of the proposed sentences.
Mr Fastow was indicted in October 2002 and again last May on 98 counts of insider trading, securities fraud, money laundering and other crimes. He is scheduled to go on trial in April. As Enron's chief financial officer, he allegedly created a web of off-balance sheet partnerships that prosecutors say duped Enron investors by hiding billions of dollars of the company's debt and souring assets.
It was also alleged that the partnerships paid Mr Fastow tens of millions of dollars in addition to his Enron salary.
The former executive has resisted prosecutors for months, maintaining his innocence even after his two top deputies at Enron - Michael Kopper and Ben Glisan - pleaded guilty to charges of securities and wire fraud.
Mrs Fastow, who once served as an assistant treasurer at Enron, was indicted in May on charges that she participated in the partnerships.
Defence lawyers have previously declined to comment on the proposed agreement until its details could be confirmed.
But several have said they believe Mr Fastow would have struck a better deal if he had had valuable information to supply.