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Fastow and wife plea bargain Original Source Link: (May no longer be active)
http://apnews.myway.com/article/20040114/D802B4380.htmlhttp://apnews.myway.com/article/20040114/D802B4380.html
Ex-Enron Exec Fastow, Wife OK Guilty Plea
Jan 13, 10:05 PM (ET)
(AP) Lea Fastow, center, leaves the federal courthouse in Houston with husband and former Enron chief...
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HOUSTON (AP) - Former Enron finance chief Andrew S. Fastow and his wife have agreed to plead guilty for their roles in a massive accounting scandal that brought down the energy giant in 2001, sources told The Associated Press on Tuesday.
The two sources, who spoke on condition of anonymity, said an impasse that erupted last week over a judge's refusal to give Lea Fastow only a five-month prison sentence had been resolved.
Fastow will become the highest ranking executive to plead guilty in the federal government's criminal investigation into the Enron collapse.
It wasn't immediately clear whether Fastow's negotiated plea involves an agreement to help the government develop cases against Enron's former top executives, Kenneth Lay and Jeffrey Skilling. Neither Lay nor Skilling has been charged; both maintain their innocence.
The Fastows were expected to enter their pleas Wednesday in federal court, according to the sources, both of whom are close to the investigation.
Lea Fastow is expected to plead guilty to a tax charge after her husband pleads guilty in a deal that involves a 10-year prison sentence. It wasn't clear Tuesday what crimes Andrew Fastow would plead guilty to.
Bryan Sierra, spokesman for the Justice Department, declined comment. Mike DeGeurin, Lea Fastow's lead attorney, and John Keker, her husband's lead attorney, didn't immediately return calls for comment. Fastow family spokesman Gordon Andrew also declined comment.
Lawyers for the government and for Lea Fastow had been expected to appear before U.S. District Judge David Hittner on Wednesday for a routine hearing to discuss potential jurors in her criminal trial set for Feb. 10.
The Houston Chronicle first reported the Fastows' plea agreements in its online edition Tuesday evening.
A plea deal with Lea Fastow, a former assistant treasurer at Enron, snagged after Hittner balked at a requirement that he sentence her to five months in prison for her alleged role in the accounting schemes. The judge insisted he retain the right to alter her sentence.
The issue threatened a proposed package of plea agreements for both the Fastows, who have two young sons. Sources said no deal for Lea Fastow meant no deal for her husband, wiping out the possibility that his cooperation could help the Justice Department build cases against Lay and Skilling.
Sources said her legal team had likely agreed to have Lea Fastow plead guilty, and then await a pre-sentence investigation by federal probation authorities to recommend an appropriate term.
Under federal sentencing guidelines, Hittner is to consider a prison term of 10 months to 16 months for the tax charge, said Kirby Behre, a former federal prosecutor in Washington D.C. The judge could depart from that range, and a 10-month sentence could be structured so that only half would be served in prison.
U.S. District Judge Kenneth Hoyt, who is presiding over Andrew Fastow's case, will accept his plea, sources said.
Andrew Fastow, who was indicted in October 2002, is charged with 98 counts of insider trading, fraud, money laundering, tax violations and others for allegedly running a complicated web of partnerships and financing methods that hid debt, inflated profits and funneled millions of dollars to him, his family and chosen friends and colleagues.
His wife is charged with six counts of conspiracy and filing false tax forms. She is accused of helping her husband to make one of those partnerships appear independent of Enron so the company would continue receiving tax benefits for wind farms after it bought a utility.
Michael Kopper, Fastow's one-time top lieutenant at Enron, led prosecutors to Fastow when he pleaded guilty to conspiracy in August 2002. Fastow was indicted two months later, and his wife was indicted in May 2003.
The day after Kopper's plea, a federal judge froze more than $23 million in bank and brokerage accounts held by the Fastows, their family foundation, his brother, several former Enron employees and two holding companies. Also frozen is $3.9 million in proceeds from the 2002 sale of a three-story, 11,493-square-foot mansion the Fastows built in Houston's wealthiest neighborhood, River Oaks, where Skilling and Lay live.
Behre called a 10-year sentence for Andrew Fastow "excellent" given the millions of dollars involved in the fraud.
"What drives sentencing is predominantly the amount of the fraud," he said. Fastow is accused of pocketing at least $45 million from the Enron deals.
Though the maximum penalties for all 98 counts against him soar to hundreds of years, Fastow would realistically get a prison sentence of at least 20 years if convicted at trial, Behre said.
"For someone facing more than 20 to get an offer that locks in 10 years with possibly good time off, and could get lower if he cooperates with prosecutors, that's as close to a sweet deal you can have in this kind of case," he said.
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