Fastows plead guilty
HOUSTON -- Andrew Fastow, chief architect of the off-the-books deals that brought down Enron, pleaded guilty along with his wife yesterday in a deal that could take prosecutors to the top of the corporate ladder at the scandal-ridden company.
The former finance chief agreed to a 10-year prison sentence and will help prosecutors build a case against the executives who once occupied the most opulent offices on the company's top floor: former chairman Kenneth Lay and former chief executive Jeffrey Skilling.
The plea bargains represent the biggest breakthrough yet in the two-year investigation into a scandal that led to the energy giant's collapse and rocked Wall Street and Washington alike.
"I and other members of Enron senior management fraudulently manipulated Enron's publicly reported financial results," Fastow said in a statement, adding that the purpose was to mislead investors and inflate the company's stock price and credit rating.
Fastow's wife, Lea, pleaded guilty to filing false tax forms related to $141,000 in gains from 1997-2000 from a wind farm deal.
Lea Fastow, 42, was Enron's assistant treasurer.
Lea Fastow's deal calls for a five-month prison sentence and a year of supervised release, including five months of house arrest. US District Judge David Hittner will decide later whether to accept the sentencing deal.
"This is very significant to the Enron Task Force because whatever Andrew Fastow knows about what went on on the 50th floor, the Enron Task Force will now know as well," said Leslie Caldwell, head of the Justice Department unit probing the firm's downfall.
Both Lay and Skilling have maintained their innocence. Neither has been charged with a crime. The Fastows remain free on bond and are scheduled for sentencing in April.
Andrew Fastow, 42, is the highest-ranking Enron executive charged in the 2001 collapse of the Houston energy company. Without a plea, he would have gone to trial on 98 counts of fraud, money laundering, insider trading, and other charges. He pleaded guilty to two counts of conspiracy to commit fraud. The agreement calls for the other counts against him to be dismissed if he forfeits at least $23.8 million and cooperates with authorities.
