Enron's Fastow Faces Fate
More than 2½ years after pleading guilty for his participation in Enron Corp.'s collapse, financial whiz Andrew Fastow's fate was to be revealed Tuesday.
U.S. District Judge Kenneth Hoyt was expected to give Fastow 10 years, which the former chief financial officer previously agreed to. Hoyt can't increase his sentence but could reduce it.
Enron, once the nation's seventh-largest company, crumbled into bankruptcy proceedings in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable. The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
Under a 2-year-old federal law that enhances the rights of victims of federal crimes, Hoyt will allow Enron victims to speak at Fastow's sentencing.
It's not certain how many people will take advantage of that, but former Enron investor Brian Durbin says he'll be one of them.
"All of those Enron executives are responsible, and need to answer for it," Durbin told .
"It will help bring closure I think once he starts serving his sentence," said former Enron employee Diana Peters, who can't attend Fastow's sentencing, but submitted a letter to the court detailing how Enron's collapse caused her financial hardship.
"This will allow those that were hurt looking for closure to find that closure. Some people need that, but there are not too many evidently," said Rod Jordan, chairman of the Severed Enron Employee Coalition, who also won't attend the hearing.
Jordan said some former Enron workers believe Fastow should be forgiven because unlike Skilling, he admitted his guilt and "is taking his medicine."
Fastow, 44, agreed to serve a maximum 10-year term when he pleaded guilty in 2004. Fastow attorneys David Gerger and John Keker have asked the judge to reduce the term.
"Prison is expected, but 10 years is not 'necessary' for the message of deterrence to be heard," Gerger and Keker said in a court filing last week.
Fastow was originally indicted on 98 counts, including fraud, insider trading and money laundering. He pleaded guilty to two counts of conspiracy, admitting to running various schemes to hide Enron debt and inflate profits while enriching himself. He also surrendered nearly $30 million in cash and property.
His cooperation helped prosecutors secure the convictions of Enron founder Kenneth Lay and the former chief executive, Jeffrey Skilling.
At their trial, Fastow testified Lay and Skilling were aware of fraudulent financial structures engineered by Fastow and his staff.
Skilling and Lay were convicted in May of conspiracy and fraud. Lay's attorneys are working to erase his convictions since his July 5 death from heart disease. Skilling is to be sentenced next month.
Fastow's wife, Lea, pleaded guilty in 2004 to a misdemeanor tax crime and served a year in prison for helping him hide ill-gotten gains from his schemes.