Justice Department prosecutors plan to file a criminal complaint against former Enron chief financial officer Andrew Fastow in Houston on Wednesday.
The complaint includes multiple counts of financial fraud, stemming from a series of trades that Fastow engineered between Enron and certain partnerships that he controlled. Fastow reaped millions of dollars in profits from the deals, often to the detriment of Enron and its shareholders.
According to sources close to the investigation, the government will initially outline its case against Fastow in a criminal complaint rather than an indictment. USA TODAY reported last week that Fastow would be indicted.
The difference is this:
An indictment is a document returned to prosecutors by a grand jury, indicating that the grand jury thinks there’s probable cause to charge an individual with one or more crimes. Customarily, an aggressive prosecutor will load up an indictment with every possible charge in the hope of intimidating a target into agreeing to plead to a smaller number of charges.
A criminal complaint forms the basis for an arrest. It outlines the possible case, but prosecutors are not committed to bringing formal charges for everything contained in the complaint.
Once a complaint is filed, prosecutors typically have 30 days to obtain an indictment. Plea negotiations could affect the timetable.
”In the current political climate, for the government to return a multiple-count indictment and then dismiss some of those counts at the time of a plea would meet with derision from Congress and the public,” says Jacob Frenkel of Smith Gambrell & Russell.
Through a spokesman, neither Fastow nor his attorneys would comment. Justice Department spokesman Bryan Sierra also declined to comment.
Fastow will probably enter federal court in front of reporters and camera crews, but he might avoid the humiliation of Adelphia and ImClone executives who were brought to court in handcuffs. A source with knowledge of Wednesday’s events described it as ”perp walk lite.”
The Enron Task Force’s complaint could embarrass other parties, from former Enron executives who profited from Fastow’s deals to banks that curried favor with him.