Spouse in Enron case gets new deal

HOUSTON (AP) — The wife of former Enron Corp. Chief Financial Officer Andrew Fastow has a new proposed plea deal that reduces her prison time.

Federal prosecutors yesterday wiped out an indictment charging Lea Fastow with six felonies — four counts of filing false tax forms and two counts of conspiracy — and replaced it with a single misdemeanor charge of filing a false tax form.

Under federal sentencing guidelines, because the conduct is the same, she still faces the sentencing range of 10 to 16 months she faced for a felony tax charge. However, because the new charge is a misdemeanor, she cannot serve more than the maximum of 12 months behind bars, essentially cutting the range to 10 to 12 months.

“She saved four months, worst case,” said Kirby Behre, a former federal prosecutor and an authority on sentencing guidelines. She is scheduled to plead guilty to the lesser count and be sentenced Thursday.

The new deal will let her avoid a trial scheduled for June 2 on the six felony counts and bypass U.S. District Judge David Hittner’s rejection of a previous plea deal that would have bound him to sentence her to five months in prison and five months confined at home.

“They restructured the deal so she would get the benefit she thought she was going to get all along,” Mr. Behre said.

Andrew Fastow pleaded guilty Jan. 14 to two counts of conspiracy, admitting to running schemes to make Enron appear financially healthy while he enriched himself at the company’s expense on the side.

The same day, Mrs. Fastow pleaded guilty to a single felony tax crime, admitting that she helped her husband hide ill-gotten gains from the government and their accountants.

He agreed to hand over nearly $24 million in cash and property, serve the maximum 10-year prison sentence on two counts of conspiracy and help prosecutors pursue other cases. His help led to subsequent indictments of former Enron Chief Executive Officer Jeffrey Skilling and former Enron top accountant Richard Causey.

Prosecutors didn’t need Mrs. Fastow’s cooperation but supported the proposed sentence because they said she played an “integral role” in securing her husband’s guilty plea and cooperation more than a year after he was indicted.