The defendants in the first criminal fraud trial stemming from the collapse of the Enron Corporation may have found help from an unlikely source: Andrew S. Fastow, the former executive who is the government’s star cooperator.
Even before the start of the trial, scheduled for Monday, the prosecution’s case against four former executives of Merrill Lynch & Company and two former officials of Enron ran into complications. A letter provided by prosecutors to the defense on Wednesday revealed that Mr. Fastow made statements in government interviews that could prove favorable to them.
Mr. Fastow’s statements, as described in a government document, do not exonerate the defendants. But they contain enough equivocation about the events surrounding the questionable financial deal between Enron and Merrill that is at the center of the case that defense lawyers could use his comments to cast doubt on whether their clients entered into the deal with the intent to commit a crime.
The government is expected to introduce documents — including a number written by some of the defendants — and call other witnesses to argue its case. Prosecutors have indicated, however, that they now are not planning to call Mr. Fastow, the former chief financial officer who has already pleaded guilty to separate fraud charges as part of an agreement to get a shorter prison term in return for his cooperation.
The development underscores one truism with criminal cases, particularly white-collar ones: Even seemingly sure-thing prosecutions can be draped with uncertainty once the basic details of the case emerge before and during trial.
The fraud case that includes the Merrill defendants has long been considered the easiest for the government among those that have emerged from the Enron debacle. In the months to come, prosecutors will be taking on far more complex cases, like those against Jeffrey Skilling, the former chief executive of Enron, and Richard Causey, its former chief accounting officer.