Enron Criminal Case Expands to New Defendants | AccountingWEB

Enron Criminal Case Expands to New Defendants

Criminal charges were filed this week against ten former Enron executives, including the wife of ex-Chief Financial Officer Andrew Fastow. From wind farms to online movies to floating power plants in Nigeria, the number of schemes the defendants were allegedly involved in is staggering. And, some were charged with insider trading that led to enormous personal gains, leaving the nation’s seventh largest firm in tatters. The 101-count indictment supercedes the existing indictment against Fastow and adds an insider trading charge to his worries.

"There are many people at Enron and other institutions, including Merrill Lynch, who are responsible for reducing the seventh-largest corporation in America to rubble," said Enron prosecutor Andrew Weissmann. "The Enron task force is continuing to sift diligently through the rubble that is Enron - piece by piece, scheme by scheme, and lie by lie."

Fastow’s wife Lea, a former Enron assistant treasurer, hugged her husband and then surrendered at the IRS headquarters in downtown Houston on Thursday. She stands accused of conspiring with her husband to hide their investment in an “off-the-books” partnership that involved Enron in a California wind farm, providing the company with a tax break. She was handcuffed and charged with conspiracy to commit wire fraud and money laundering as well as filing false income tax returns from 1997-2000. In 2000, the couple declared income of $45,583,318, but the indictment charges they knew they had earned more.

The case against Andrew Fastow grew to include charges of insider trading, when he sold more than 234,000 shares of Enron, worth $18 million, from March to November of 2000. This new charge was added to a slew of existing charges against Fastow, including conspiracy, wire fraud, obstruction of justice, money laundering, securities fraud and filing false tax returns.

Charges were also filed against:

  • Dan Boyle, a former vice president in Fastow's finance group. He was charged with conspiracy to commit wire and securities fraud and falsify books.
  • Ben F. Glisan Jr., a former Enron treasurer in Fastow's finance group, was charged with conspiracy to commit wire fraud and falsify books. In one transaction, prosecutors charge that Fastow invested $5,816 in one scheme in 2000, and 41 days later received a return of $1,0450,744.

An additional seven executives of Enron Broadband Services (EBS) faced charges they inflated the company stock:

  • Kevin A. Howard, vice president of finance until September 2001
  • Michael W. Krautz, a senior accountant
  • Ken Rice, co-chief executive officer
  • Joe Hirko, co-chief executive officer
  • Kevin Hannon, chief operating officer
  • F. Scott Yeager, an EBS executive
  • Rex Shelby, an EBS executive