A plea deal with Fastow would be the biggest catch yet in attempts by US officials to apportion blame for the Enron scandal. The company, once the seventh largest in America, was tilted into bankruptcy after it emerged that debts were being hidden and revenues inflated through a complex web of accounting fraud.
Prosecutors have alleged that Fastow masterminded the scheme which enriched him and a number of colleagues and friends. He is charged with 98 counts of fraud, money laundering, insider trading and other charges. He is free on a $5m bond, pending trial in April.
If lawyers and judges agree, Fastow would change his plea from innocent to guilty, possibly today. One report said the deal could send him to prison for 10 years.
Fastow could also provide a valuable source for prosecutors bringing a case against Enron’s former top executives Jeffrey Skilling and Kenneth Lay. Neither of the men, both former chief executives, have been charged and both have denied wrongdoing. Mr Fastow would have intimate knowledge of what they knew.
His wife, Lea Fastow, a former assistant treasurer at Enron, goes on trial on February 10, facing six counts of conspiracy and filing false tax forms. She has pleaded not guilty but is also negotiating a deal.
Causey was fired in February 2002 for failing to properly monitor LJM, one of the special purpose entities created by Fastow allegedly used to perpetrate the fraud.