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.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.