Enron's Lea Fastow Sentenced to One Year in Prison

Signaling they have bigger fish to fry, federal prosecutors and attorneys for Lea Fastow seem to have struck a deal to end the government’s criminal case against the wife of former Enron Corp. chief financial officer Andrew Fastow. The Wall Street Journal reported she will spend no more than 12 months in prison on a charge of filing a false tax return.

Update: May 6, 2004. On Thursday, Fastow, the 42 year old mother pleaded guilty to a tax charge and was sentenced to one year in prison. Prosecutors want the cooperation of her husband, former Enron Chief Financial Officer Andrew Fastow. He pleaded guilty to two felony charges and faces up to 10 years in prison for his role in the collapse of Enron.

As government investigators step up their probe of former Chairman and Chief Executive Kenneth Lay, they are anxious to resolve the case against Lea Fastow. An earlier deal fell apart earlier this year when a federal judge rejected the deal, saying Mrs. Fastow deserved to spend more than five months in prison followed by five months of house arrest.

Her husband faces up to 10 years in prison after pleading guilty to two felony counts related to his fraudulent conduct at Enron, the Journal reported, adding he has agreed to cooperate in the government's investigation of other top former officials, including Lay.

The Fastow’s deals were designed to ensure that at least one of them would be home with their young sons while the other is in prison. Mrs. Fastow had been heading toward a June 2 trial until last week’s deal was apparently reached. She could have faced several years in prison.

Last week the government filed a superseding criminal case against Mrs. Fastow on the single misdemeanor charge of filing a false tax return. Previously, she had faced up to six felony counts, including conspiracy. Prosecutors had alleged she assisted her husband in his illegal activities at Enron.

Prosecutors are vigorously investigating Lay, seeking possible criminal charges against him, the Journal reported. Among other possible charges, the government is looking into Lay’s activities in late 2001when the company was forced into bankruptcy. Investigators are trying to find out whether or not Lay lied to the public about the company’s condition.

Lay's attorney, Michael Ramsey, acknowledged to the Journal that the government has been actively investigating his client. He said he remains confident Mr. Lay did nothing illegal and that there is no basis to bring criminal charges against him. Andrew Weissmann, head of the Justice Department's Enron Task Force, declined to comment, the Journal reported.

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.