Prosecutors have informed Andrew S. Fastow, the alleged mastermind behind accounting schemes at Enron Corp., that they will change a 78-count indictment against him in coming weeks.
A Houston grand jury indicted Enron’s former chief financial officer last month on charges of wire fraud, money laundering and obstruction of justice. Fastow controlled secretive business partnerships that prosecutors say he used to conceal Enron’s worsening financial problems and to enrich himself and his family and friends by millions of dollars.
Fastow has pleaded not guilty to the charges and is free on $5 million bond.
In court papers filed last week, prosecutors on the Enron task force disclosed plans to alter the Fastow indictment with a “superseding” set of charges. The prosecutors could add other crimes allegedly committed by Fastow, remove some of the criminal charges against him, or add new defendants.
Information filed by prosecutors earlier in the Fastow case showed their interest in other former Enron officials who have not been charged but who allegedly conspired with him, including former chief accounting officer Richard A. Causey. But prosecutors mentioned the other executives only by title, not by name.
A Justice Department spokesman declined to comment on the ongoing investigation, as did a spokesman for the Fastow family.
Prosecutors have said in court papers that they are continuing to examine the role others played in Enron’s collapse.
Grand juries in Houston and San Francisco are gathering evidence about fraud allegedly committed by Enron executives, including those at Enron’s Internet broadband unit, and the alleged manipulation of California energy prices during a power crisis there, according to lawyers involved in the cases.
“The scale of the Enron Task Force’s investigation is massive: to date, hundreds of witnesses have been interviewed and many more interviews are anticipated,” Justice Department lawyers wrote in court papers.
Meanwhile, government lawyers asked that Fastow’s case be transferred to U.S. District Judge Melinda Harmon, who presided over the criminal trial of Arthur Andersen LLP, Enron’s auditor, and who is handling civil cases involving Enron. Fastow’s lawyer, John Keker, opposed the request, and another Houston-based federal judge has yet to issue a ruling on the issue.
Enron filed for bankruptcy protection and fired thousands of employees one year ago this week, leading to heightened scrutiny of accounting practices. A wave of corporate scandals followed.