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Former Enron Ex Faces Arraignment

Nov 6, 2002 | AP

As Enron Corp.'s chief financial officer, Andrew Fastow allegedly masterminded a series of complex financial schemes that contributed to the energy trader's downfall.

A flood of criminal charges followed, and on Wednesday he faced arraignment in a federal courtroom on a 78-count indictment.

His attorneys have indicated Fastow, 40, would plead innocent.

Fastow, who was ousted a year ago as Enron spiraled toward bankruptcy, was initially charged Oct. 2 and indicted last week on various counts of fraud, money laundering, conspiracy, obstruction of justice and other charges.

Technically he faces a maximum 860 years in prison, though under complicated federal sentencing guidelines he would receive far less if convicted.

The indictments, handed up by a special Enron grand jury in Houston, allege Fastow crafted multiple schemes that produced phantom profits and let him skim millions for himself, his family and inner circle.

Fastow's attorneys have said top Enron executives approved his work and that Fastow did not believe he committed any crimes. Former chief executive officers Jeffrey Skilling and Kenneth Lay were Fastow's immediate superior at different times.

Fastow is free on $5 million bond.

At the time of his initial charge, Fastow attorney John W. Keker predicted his client "will be set free" by a jury once all the facts are known. He declined to elaborate.

Prosecutors have said Fastow has not cooperated as the Enron Task Force further pursues the case. Assistant U.S. Attorney Andrew Weissmann has publicly left the door open to a deal, noting last month the charges against Fastow "carry significant jail time."

Enron grew from a small pipeline company to a high-flying trading firm that reached No. 7 on the Fortune 500 list two years ago. It filed for bankruptcy Dec. 2 after revealing a $618 million loss and eliminating $1.2 billion of shareholder equity.

Enron's collapse was only the first in a series of corporate scandals that pummeled investor confidence in the volatile stock market. Enron's collapse destroyed employee retirement accounts, and its bankruptcy cost more than 4,500 workers their jobs.

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