• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Judge to Decide Fastow's Wife Trial Fate

Posted on: Thursday, 8 January 2004, 06:00 CST

A federal judge promised a quick decision Thursday on whether to delay a scheduled trial for the wife of Enron's former finance chief or to accept a plea agreement with her that also could result in a plea agreement involving her husband.

U.S. District Court Judge David Hittner was expected to hold a late morning hearing in the case of Lea Fastow, a former assistant treasurer at Enron Corp. whose husband is Andrew Fastow, a central figure in Enron's scandalous implosion.

"We are going to lay it all out," Hittner said Thursday.

The hearing was to follow Hittner's remarks to more than 200 potential jurors summoned to the federal courthouse to fill out questionnaires related to Lea Fastow's scheduled Feb. 10 trial.

Hittner told attorneys he wanted to discuss the circumstances of a plea involving Lea Fastow so a plea in another Enron-related matter could go forward.

He did not identify by name Andrew Fastow, who people close to the case said was negotiating a plea deal with prosecutors that could send him to prison and force him to pay $20 million.

Hittner said one of the issues to be discussed was a plea agreement that binds him to a specific sentence.

Hittner, who presides over Lea Fastow's case, rejected a plea deal Wednesday that would have sent her to prison for five months, saying it did not allow him sufficient leeway on her sentence. Attorneys could still revise that deal.

Any deal with Fastow also could bring Enron's former top executives, Kenneth Lay and Jeffrey Skilling, closer to prosecution for the energy giant's downfall.

Leslie Caldwell, head of the Justice Department's Enron Task Force, was asked Thursday as she arrived at the Houston federal courthouse whether there would be any developments. She said: "We'll see."

Andrew Fastow - whose deal would include an agreement to pay at least $20 million to the Securities and Exchange Commission - could nix a plea agreement for himself if no deal is reached for his wife, sources close to the case said, speaking on condition of anonymity.

U.S. District Judge Kenneth Hoyt would have to approve a deal for Fastow, which may include a 10-year prison sentence, the sources said.

If attorneys and judges agree on a deal, the former executive could appear in court to change his plea to guilty as early as Thursday, the sources said. Fastow's lawyers went to Hoyt's chambers immediately after arriving at the courthouse Thursday.

Plea deals often involve agreements to testify against others, and the potential of a Fastow plea deal raises the possibility that prosecutors are closer to bringing a case against Lay and Skilling.

Neither Lay nor Skilling has been charged in the Enron scandal, and attorneys have not said whether Fastow is willing to cooperate in prosecuting them. Enron whistle-blower Sherron Watkins said Thursday that Fastow's knowledge of Enron's inner workings could crack open the case.

"Sometimes I liken Jeff Skilling to a Mafia boss who used particular words. He never said, 'Go whack Joey.' He said, 'Go take care of Joey.' And now that there have been corporate problems, he tries to say that 'I just meant, send Joey on vacation.'

"Andy's almost like the assassin who can now tell the government what his orders were or were not," Watkins told ABC's "Good Morning America."

Fastow would be the highest-ranking executive to plead guilty in the criminal investigation of Enron. The company's collapse into bankruptcy in late 2001 was the first in a series of scandals that rattled corporate America and shook investors' confidence in the stock market.

He allegedly masterminded a complex web of schemes that hid Enron's debt, inflated profits and allowed him to skim millions of dollars for himself, his family and selected friends and colleagues. Prosecutors say he reaped an estimated $30 million from the web of partnerships he set up.

When Fastow was indicted in October 2002, his lawyers said Skilling and Lay approved his work. Skilling and Lay both maintain their innocence in Enron's demise.

Fastow, 42, is charged with fraud, money laundering, insider trading and other charges. He is free on $5 million bond pending trial scheduled for April. If convicted, the maximum penalties for the charges against him include 20 years in prison for money laundering, 10 years for securities fraud and five years each on the mail fraud and conspiracy charges.

His wife, Lea, is charged with six counts of conspiracy and filing false tax forms for allegedly participating in some of her husband's deals.

Attorneys for the Fastows did not return calls seeking comment. The family's spokesman, Gordon Andrew, declined comment.

Authorities also were preparing criminal charges against Enron's former chief accountant, Richard A. Causey, but backed off plans for him to surrender as early as Thursday, sources with knowledge of the matter told The Associated Press on condition of anonymity. Causey could surrender Friday instead, the sources said.

The exact nature of a complaint against Causey was not immediately clear.

Causey, 43, was fired Feb. 14, 2002, after a board of directors report noted his failure to properly monitor a partnership that became a focal point of the fraud investigation. The partnership, called LJM, was devised by Andrew Fastow, and prosecutors say it was used to conduct sham transactions to fraudulently improve Enron's books and enrich Fastow and others.

Causey's lawyer, Reid Weingarten, did not return calls.

-----

AP Business Writer Marcy Gordon in Washington contributed to this report.

More News in this Category