Enron man faces 10-year stretch after plea-bargain

Federal prosecutors finally won their battle to persuade Andrew Fastow, the former chief financial officer of the collapsed energy giant Enron, and his wife, Lea Fastow, to enter guilty pleas yesterday for their roles in the company's demise in exchange for reduced prison sentences.

Andrew Fastow pleaded guilty to criminal charges during a court hearing in Houston yesterday. His wife later admitted to one count of filing a false tax return. The high-profile pair have been under intense pressure from the American government for more than a year to reverse their claims of innocence. Mr Fastow is described as the mastermind of the web of hidden partnerships in Enron used to disguise its true financial troubles.

Mr Fastow pleaded guilty to two charges of conspiracy and has agreed to serve 10 years in prison and to forfeit $23.4m assets, most of which have already been frozen. Prosecutors dropped another 96 counts against Mr Fastow after he agreed to help the government investigation into Enron's collapse.

Expectations are high that the deal will give prosecutors the leads they need to crack open the Enron case and possibly file criminal charges against Kenneth Lay and Jeffrey Skilling, two of its most senior former executives, who have both maintained they are innocent of any wrongdoing. Neither man has yet been charged.

"Unquestionably, this is the breakthrough that the government has been pursuing" to lead them to Mr Lay and Mr Skilling, said Robert Mintz, a former federal prosecutor and an expert in white-collar crime. "There is nobody besides [Andrew] Fastow who can make this case for the government and that's why they have been pursuing him for so long and so aggressively."

The former chief financial officer, who was charged with multiple offences in 2002, including money laundering, tax evasion, fraud and insider trading, had resisted all attempts by prosecutors to agree to a guilty plea, insisting instead he would go to trial.

He apparently changed his mind, however, on the eve of jury selection for a separate trial for his wife, who is accused of conspiracy and filing false tax forms.

Targeting a family member is a common strategy for US prosecutors. The Fastows have two young children and it seems that it was the prospect of them being "orphaned" that led to the breakthrough. Mrs Fastow is expected to complete a five-month sentence before her husband goes to prison.

An earlier attempt to seal the guilty agreements unexpectedly stalled last week after the judge in Mrs Fastow's case objected to proposed limits on her prison sentence.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea