Plea Deal for Wife of Former Enron Exec Gets Preliminary OK

A tentative plea agreement for the wife of former Enron Corp. finance chief Andrew S. Fastow may lead to a plea from Fastow himself and perhaps his cooperation into the investigation of the company’s collapse, observers say.

U.S. District Court Judge David Hittner on Thursday tentatively accepted Lea Fastow’s plea agreement, which would send the former assistant Enron treasurer to prison for five months on one count of filing a false tax return, the Wall Street Journal reported.

However, Hittner said he has "preliminary concerns" and ordered a presentencing investigation, which could take two months, to determine if the sentence is appropriate before finalizing it.

Andrew Fastow’s plea deal, being negotiated with prosecutors, would mean guilty pleas on some of the nearly 100 counts against him and 10 years of prison time in exchange for cooperation in the Enron probe, the Journal reported. Fastow was the alleged brainchild behind a series of schemes that hid Enron's debt, inflated profits and allowed him to skim millions of dollars for himself, his family and selected friends and colleagues.

Plea deals often involve agreements to testify against others, raising the possibility that cases could be brought against Enron's former top executives, Kenneth Lay and Jeffrey Skilling, who have not been charged. Both have denied wrongdoing at Enron, which collapsed in 2001.

Fastow has already provided some information on former Chief Accounting Officer Richard Causey — and a criminal complaint has been drawn up — but the information can’t be used unless Fastow’s plea agreement is approved.

Fastow plea deal is apparently contingent upon a deal for his wife. They want to avoid prison at the same time, so one of them can care for their two sons, 8 and 4.

"She has two children at home .. and five months works. Anything more than that doesn't," said Mike DeGeurin, Lea Fastow's attorney. "It is a problem because of timing. If Andy, her husband, has to go to jail at some time, we don't want the children to be without parents. For reasons I don't want to go too much into right now, five months will work." DeGeurin also said the plea bargain included "no agreement that Mrs. Fastow cooperate."

Hittner gave attorneys until noon Friday to accept his findings and said he would delay Lea Fastow's trial, scheduled for Feb. 10, if all parties agreed. DeGeurin told reporters that his client hadn't decided whether to accept the plea agreement under the conditions laid out by the judge.

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.