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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (10088)	12/7/2002 7:31:52 PM
From: stockman_scott	Respond to of 89467

New indictment sought against Fastow More defendants signaled in case vs. ex-Enron CFO By Anna Marie Stolley, Bloomberg News, 12/6/2002 WASHINGTON - US prosecutors said they will seek a new indictment against former Enron Corp. chief financial officer Andrew Fastow, a signal the government may add charges or defendants in the case against the alleged mastermind of the fraud that led to the energy trader's collapse. Fastow pleaded not guilty Nov. 6 to 78 counts of fraud, money laundering, and other charges. Prosecutors have told him they plan to ask a grand jury for a second indictment, the Justice Department's Enron Task Force said in a court filing. ''As the filing states, Fastow has been informed that a superseding indictment is anticipated,'' said Justice Department spokesman Bryan Sierra. Sierra declined to comment on what new charges Fastow might face. Lawyers following the case say Fastow probably will be charged with securities fraud, supported by additional facts and possibly the naming of new defendants accused of working with him. ''The original indictment charged conspiracy to commit securities fraud but not specific acts of securities fraud,'' said Jacob Frenkel, a former US Securities and Exchange Commission enforcement lawyer and now a partner at Smith, Gambrell & Russell. ''The purposes of adding charges could be to increase the pressure on Fastow to cooperate.'' John Keker, attorney for Fastow, didn't return a message left at his San Francisco office. The Justice Department may also be considering implicating others in securities law violations, Frenkel said. ''By refocusing on securities fraud and corporate governance issues, the prosecutors could bring direct attention to the relationship between Enron and its auditors, lawyers, and directors,'' Frenkel said. Prosecutors are trying to determine ''whether others at Enron and elsewhere were involved in criminal conduct leading to Enron's collapse, and whether those already charged engaged in additional crimes,'' the Justice Department's court filing said. ''The government may well be getting new information from cooperating witnesses who have signed on since the initial indictment was returned,'' said Robert Mintz, a former federal prosecutor. ''If the information has allowed them to broaden the scope of their charges to include others, it's to the government's advantage to try them together with Fastow.'' Last month, former Enron finance executive Lawrence Lawyer pleaded guilty to failing to report as income almost $80,000 he accepted for participating in a scheme. Former Enron executive Michael Kopper, who ran partnerships for Fastow, pleaded guilty in August to fraud and money-laundering conspiracies and implicated Fastow. Enron sought bankruptcy protection a year ago after restating more than $586 million in earnings. The government is trying to get the case against Fastow switched from US District Judge Kenneth Hoyt to Judge Melinda Harmon, who presided over the case against Arthur Andersen LLP for destroying Enron-related documents. Andersen was convicted in June of obstructing justice. Prosecutors argue that Harmon is familiar with the Enron investigation and is overseeing related civil cases. Reassigning the case to her also would save judicial resources and ensure uniformity of rulings, prosecutors said in court papers filed last month. Andersen lawyer Rusty Hardin accused Harmon of favoring the prosecution and hamstringing his defense. Throughout the trial, Hardin argued with Harmon's rulings, and she responded by reprimanding him. While neither side in the Fastow case has indicated a plea agreement is close, some legal experts say that there is evidence of progress toward cooperation. This story ran on page C2 of the Boston Globe on 12/6/2002. © Copyright 2002 Globe Newspaper Company.