Fastows Plead Guilty In Enron Case
Husband and wife each face jail timeJan 14, 2004 | www.cbsmarketwatch.com
Andrew Fastow, Enron's former chief financial officer, pleaded guilty Wednesday to fraud charges in the highest level corruption plea yet after the energy giant's collapse three years ago.
He will serve 10 years in jail without parole and pay a $23 million fine.
Separately, Fastow's wife, Lea, pleaded guilty to a charge of filing a false income tax return and faces at least five months in prison.
Fastow reached a settlement with the Securities and Exchange Commission that, in addition to the $23 million fine, permanently bars him from serving as an officer or director of a public company.
In an afternoon press conference in Washington, Justice Department officials said the remaining 96 criminal counts against Andrew Fastow are still pending and will be dismissed only if the government decides that he cooperated with the investigations of other Enron executives.
In the plea deal, Fastow promised that his cooperation would include answering all questions posed by federal investigators.
As part of the agreement, Fastow admitted that "he and other members of Enron's senior management conspired in a wide-ranging scheme to fraudulently manipulate Enron's publicly reported results," a Justice Department press release said.
Fastow also admitted to using Enron's off-the-books LJM entities for his own personal gain.
Fastow's cooperation will give federal prosecutors a first-hand account of the events that led to Houston-based Enron's collapse. "Using Mr. Fastow's cooperation," said Deputy Attorney General James Comey, "we will continue ... by prosecuting each person to which the evidence and the law lead us."
The assistance may help bring charges against Enron's former Chairman Ken Lay and former CEO Jeff Skilling. Both maintain their innocence, and neither has been charged in the accounting scandal that cost many shareholders their life savings.
People close to the case told the Houston Chronicle they expect Skilling to be charged soon. In a press conference in front of the Houston federal courthouse, Leslie Caldwell, head of the government's Enron Task Force, declined to comment on potential indictments.
His cooperation is expected to spark criminal charges against Enron's former chief accounting officer, Richard Causey.
Andrew Fastow's trial had been scheduled for April 20, while Lea Fastow's had been set for Feb. 10. The couple have two small children and hoped to avoid concurrent jail terms.
Caldwell said it appears that Lea Fastow will serve ahead of her husband because Andrew Fastow will be assisting the government for some time before beginning to serve his sentence. Following a presentencing investigation, Fastow will be sentenced on April 19.
Previously, former Enron treasurer Ben Glisan had pleaded guilty to conspiracy charges but did not agree to cooperate with prosecutors and is serving a five-year prison term.
Michael Kopper, Andrew Fastow's top aide in running Enron's partnerships, pleaded guilty to conspiracy and money-laundering charges. He surrendered $12 million as well as agreeing to testify against his ex-boss.
David Delainey, chief executive of Enron North America and Enron Energy Services, pleaded guilty to the one-count indictment of insider trading. Delainey, who is cooperating with the Justice Department, reported directly to Skilling. Enron North America's former chief accounting officer, Wesley Colwell, settled SEC charges similar to Delainey's. He also is cooperating with the federal prosecutors.