Lea Fastow, 42, Enron’s former assistant treasurer, faces trial June 2. She had pleaded guilty Jan. 14 to filing a false income-tax return. The same day, her husband, also 42, agreed to a 10-year prison term and to help prosecutors investigate other former Enron executives. He admitted orchestrating an accounting fraud that led in December 2001 to what was then largest bankruptcy in U.S. history.
Andrew Fastow may refuse to cooperate with prosecutors because his wife’s plea bargain, designed to leave one parent out of jail at all times to care for their children, did not work out, said Chip Lewis, a defense lawyer in Houston. Fastow’s refusal to cooperate might jeopardize the government’s cases against other former Enron officers, Lewis said.
“This may be a deal breaker for him,” said Lewis, of Andrew Fastow’s plea bargain. “He can tell the Department of Justice `I’m done. I came to the table. I did what you asked. You couldn’t deliver.”’
Prosecutors could drop charges against Lea Fastow to assure cooperation of her husband should he decide not to cooperate, Lewis said.
Andrew Fastow’s cooperation led to the Feb. 19 indictment of former Enron Chief Executive Officer Jeffrey Skilling and Enron accounting chief Richard Causey for fraud. Prosecutors are investigating former Chairman Kenneth Lay. All three former executives have denied wrongdoing.
“This is a message to all those folks out there that the government can’t deliver on their promises,” said Dan Petrocelli, a lawyer for Skilling.
John Keker, Andrew Fastow’s lawyer, and Reid Weingarten, Causey’s lawyer, did not return calls seeking comment.
At today’s hearing, U.S. District Judge David Hittner, 64, told Lea Fastow that his court would not “voluntarily limit its role in sentencing.”
Fastow told Hittner at her January plea hearing that she hoped to serve her sentence at a time different from that imposed on her husband so one parent would be available at all times to care for their two sons, ages 8 and 5. Andrew Fastow, sued by Enron investors claiming $30 billion in stock and bond losses, is to be sentenced on Oct. 25.
Under federal sentencing guidelines, Lea Fastow faced a sentence of 10 to 16 months’ confinement for the one count of filing a false tax return, half of which could have been spent under monitored house detention. A conviction at trial on the same