Andrew Fastow, former Enron chief financial officer, entered guilty pleas on two counts of fraud on Wednesday, accepting a plea agreement under which he will serve time in prison and might have to testify against his former bosses.
In a separate deal with the Securities and Exchange Commission, he will pay a fine of about $23m and be permanently barred from ever serving as an officer or director of a public company, according to people familiar with the deal.
His wife, Lea, a former assistant treasurer at the energy trading company, was also expected to enter a guilty plea. Mr and Mrs Fastow had been prepared to accept a plea agreement after being assured they would not serve their jail sentences at the same time.
On Friday, Mrs Fastow withdrew an earlier agreement after Judge David Hittner said he would accept her offer to plead guilty but reserved the right to decide her sentence after viewing a report by prosecutors on her alleged involvement.
She had sought the judge’s approval of her proposed plea agreement, under which she would serve a five-month prison sentence. That would pave the way for Mr Fastow to plead guilty, to be sentenced to 10 years in prison and forfeit about $20m.
By serving just five months, Mrs Fastow could emerge from prison before he entered, ensuring one parent was at home with their young children.
To break the deadlock, prosecutors agreed to try to delay the beginning of Mr Fastow’s prison term if Judge Hittner extended Mrs Fastow’s sentence beyond five months, according to a person familiar with negotiations.
Federal prosecutors bargained for days with the Fastows as the unravelling of the plea agreements would have been a heavy blow to their effort to make Enron executives accountable for the collapse of the company.