Enron CFO Fastow sentenced to six years in jail
Andrew Fastow, who helped engineer the financial trickery that sank Enron and then helped convict his former bosses in the scandal, on Tuesday got four years knocked off the plea deal he had made, receiving a six-year sentence instead.
United States District Judge Ken Hoyt said the 44-year-old former Enron chief financial officer (CFO) had given “exceptional” assistance to prosecutors, had pledged to help victims and had shown remorse, and his wife had gone to prison for a year.
Fastow, who oversaw Enron’s finances during the giant energy trader’s spectacular rise and fall, pleaded guilty to fraud and conspiracy in 2004, agreeing to a 10-year sentence and pledging to help prosecutors. His testimony helped convict former Chairman Kenneth Lay and former CEO Jeffrey Skilling.
His voice breaking in an anguished statement before hearing his sentence, he expressed his shame, pledged to work for redemption and apologised to the victims of the Enron fraud and to his friends and family. “I failed them,” he said.
“Andy Fastow, by any measure, should be the happiest guy on Earth today,” said Kirby Behre, former federal prosecutor and an expert on sentencing.
“He was slated to get 10, could have gotten 20, and with any luck, he’ll be out with five and change.”
The judge rejected a request from lawyers for Enron victims that Fastow be allowed to delay his surrender until October 23, which they said would make it easier for him to give a deposition that could facilitate billions more in recoveries from Enron’s banks. But the judge ordered him into custody immediately.
Hoyt imposed no fine and recommended a minimum-security prison for Fastow. “What moves the arm of justice is mercy,” he told Fastow. “You were drunk on the wine of greed ... [but] you had a double portion, in that your wife shared in that [punishment].”
Enron’s crash caused investors to lose billions and cost thousands of employees their jobs and retirement savings. Lay and Skilling blamed Fastow for the fall, but some experts said his fiscal maneuvers merely propped up a flawed firm. The judge said Fastow was only one of a number of people responsible.
Fastow—first indicted on 78 counts of fraud, money-laundering and conspiracy, with 31 more added later—pleaded guilty to two counts after his wife was charged with tax fraud. She signed a return that hid Fastow’s secret profits on the off-balance-sheet deals he used to fund Enron.
His wife, Lea, served a year in prison after making her own plea bargain with prosecutors. She sat among friends and family, many of them weeping, as her husband was sentenced on Tuesday. She hugged and kissed him before he was led away.
The judge said that since Fastow had forfeited $24-million and his family and friends more than $5-million, he was not imposing a fine, but he ordered two years’ supervised release after the prison sentence.
He recommended that Fastow be sent to the minimum-security prison in Bastrop, Texas, and that he receive drug treatment for medicines he has been taking for anxiety.
Hoyt had invited the public to come to court and blast an Enron villain, under a law allowing victim statements, but the only statements he wound up hearing before sentencing were from a prosecutor, a defense lawyer, three plaintiff lawyers and one victim—Brian Durbin, a small investor angry over losing his money who argued that 10 years would be a fair sentence.
Prosecutor John Hueston said Fastow has changed since his indictment and has worked hard to help correct his wrongdoing. “Mr Fastow’s cooperation proved critical,” he said.
The judge said he had received about 50 letters from people supporting Fastow and about a dozen from people criticising him. He read from one victim’s letter saying 10 years would be less time that it will take him to recover from his loss.
When Fastow made his plea deal, he promised not to seek leniency but he changed his mind after the US Supreme Court altered sentencing guidelines in 2005, making them advisory and not mandatory and telling judges to consider a defendant’s overall record.
In all, two dozen people have been convicted or pleaded guilty in the Enron scandal, with other cases still pending. - Reuters