Enron's Fastow in Plea Bargain Talks
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By Kevin Drawbaugh
WASHINGTON (Reuters) - Andrew Fastow, former Enron Corp. (Other OTC:ENRNQ - news) financial mastermind, is negotiating a plea bargain and another former Enron executive is expected to face charges soon, sources close to the case said on Wednesday.
As prosecutors work their way up the management hierarchy at the bankrupt energy trader in a massive fraud case now two years old, the sources said former Enron chief accountant Richard Causey was expected to be charged soon.
But timing and details of any action to be brought against Causey depend partly on the Fastow case, the sources said.
Fastow, Enron's former chief financial officer, has agreed to pay "more than $20 million" to settle civil charges by the U.S. Securities and Exchange Commission (news - web sites), according to a source familiar with the matter.
He has agreed to settle the SEC charges without admitting or denying any wrongdoing but a deal is not expected to be announced until he negotiates a plea agreement with criminal prosecutors.
In the criminal case, Fastow is negotiating a plea bargain deal that could send him to prison for 10 years, said sources familiar with the matter. If no deal is reached, his trial is slated for April.
Fastow is accused of engineering complex financial deals that hid Enron's debt and boosted its stock price. Fastow has pleaded not guilty to 98 counts of fraud, money laundering, insider trading and falsification of accounting records.
A federal judge in Houston has rejected a proposed plea bargain that would have resulted in a five-month prison sentence for Fastow's wife, Lea Fastow, who was once Enron's assistant treasurer, the sources said.
Both Fastows have been accused of playing roles in the financial chicanery that led to the downfall of Houston-based Enron, once America's seventh-largest company and the first in a series of corporate scandals that have rocked world markets.
A spokesman for the Fastows declined to comment.
Former Enron chairman Kenneth Lay and former chief executive Jeffrey Skilling have not been charged in the two-year-old case, although several mid-level executives have pleaded guilty, agreed to cooperate or face trial.
If Fastow cuts a plea deal, it is unclear if he would agree to cooperate with investigators. If he does, some lawyers said, his former superiors would have immediate cause to worry about what he might tell authorities.
"If I were Skilling or even Lay, I would be sweating bullets" over the possibility of Fastow agreeing to talk, said a lawyer close to the case who asked not to be named.
Plea bargain talks with Andrew Fastow could still falter, as those for his wife did today, the sources said.
Craig Smyser, a Houston attorney who is defending Andrew Fastow in civil litigation, declined to comment on the talks. He said civil proceedings against his client were on hold pending resolution of the criminal case.
John Keker, Andrew Fastow's attorney in the criminal case against him, could not be reached for comment.
Lawyers for Causey and Skilling could not be reached.
Michael Ramsey, one of Lay's lawyers, said he was not concerned about Fastow possibly cooperating. "As long as the guy tells the truth, then it's no threat to us. Because the truth is Ken didn't commit a crime," Ramsey said.
"We've cooperated as fully as we know how" with government investigators over the past few months, he said.
Lea Fastow has pleaded not guilty to six criminal counts, including false tax reporting and conspiracy in her husband's dealings. She is scheduled to go to trial next month. (Additional reporting by John Poirier and Erwin Seba) |
