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Fastow's wife gets one year in jail

After months of negotiations, Lea Fastow pleads guilty to helping her husband hide money swindled from the energy company.

By Associated Press
Published May 7, 2004

HOUSTON - The wife of former Enron finance chief Andrew Fastow pleaded guilty Thursday to helping her husband hide some of his ill-gotten gains and was sentenced to the maximum of one year in prison.

The plea came after months of legal wrangling in which the Fastows' lawyers sought to minimize Lea Fastow's time away from their two young children.

U.S. District Judge David Hittner turned aside pleas to give Lea Fastow only a few months in prison on the misdemeanor charge of filing a false tax form.

Several of Lea Fastow's supporters wept in the courtroom as she was sentenced. She began crying after the judge left the room.

"I've made errors in judgment I will always regret for the rest of my life," she told the judge. "But I can't undo the past. I am only able to do what is right now."

Lea Fastow, 42, was a former assistant treasurer at Enron, but the case involved only her role in her and her husband's tax filings. She has admitted hiding his ill-gotten income from the government by disguising it as gifts.

Her case was part of a deal that included a plea agreement for her husband. He pleaded guilty in January to two counts of conspiracy, admitting to running a complex web of schemes and partnerships designed to make Enron appear financially healthy while enriching himself at the company's expense.

He agreed to relinquish nearly $24-million in cash and property, serve the maximum 10-year prison sentence and help prosecutors pursue other cases. His help led to indictments of former Enron chief executive Jeffrey Skilling and former Enron top accountant Richard Causey.

Enron imploded into bankruptcy in late 2001 amid a series of questionable financial transactions. The collapse cost thousands their jobs and erased the investments of thousands more who owned its stock.

Lea Fastow had originally pleaded guilty to a felony tax crime in January, in exchange for a sentence of five months in prison and five months of home confinement. The Fastows have two young sons.

Hittner rejected the plea agreement, saying he wanted to consider the 10 to 16 months called for by federal sentencing guidelines.

Hittner scheduled a trial to begin June 2 on six felony charges, but prosecutors wiped out those counts last week and filed the single misdemeanor charge in exchange for her guilty plea. The misdemeanor charge meant the most she could serve is one year.

Hittner said replacing the felony charges with a single misdemeanor "might be seen as a blatant manipulation of the federal justice system, and is of considerable concern to this court."

Linda Lacewell, a prosecutor with the Justice Department's Enron Task Force, said closing out the Fastows' cases "enables us to go forward up the chain in the company."

"We do not minimize the seriousness of the crime," Lacewell said. "We do not do this lightly. We do it rarely."

Prosecutors supported a 10-month sentence split between prison and home confinement. "The judge disagreed. He had absolute discretion to impose 12 months," said Andrew Weissmann, chief of the Enron Task Force.

As he asked for leniency, Mike DeGeurin, Lea Fastow's lawyer, emphasized his client's role in securing Andrew Fastow's guilty plea.

"While he's standing there ready to take them on," DeGeurin said of Andrew Fastow, his wife was telling him to "put your weapons down. We'll get through this."'

The judge gave Lea Fastow no fine but placed her on a year of supervised release once the sentence is completed. She remains free until she is given a date to report to a federal prison.

[Last modified May 7, 2004, 01:03:18]

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