The Fastows Roll Over

Discussion in 'Current Events' started by wonderwench, Jan 14, 2004.

  1. wonderwench
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    wonderwench Guest

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    Prosecutors in the Enron scandal have just about bagged a big fish. The Fastows have approved a plea agreement. If this goes through, watch out for Fastow to spill the beans on Lay and Skilling.

    I doubt that the judge will approve any agreement which does not require Fastow to completely cooperate in the ongoing investigations.


    Former Enron chief financial officer Andrew Fastow and his wife, Lea Fastow, were set to plead guilty on Wednesday to federal criminal charges arising from the collapse of the bankrupt merchant energy giant.

    A source close to the case said they would admit to misdeeds in exchange for far more lenient sentences than they might have gotten had they been convicted in a jury trial.

    The plea deals, which must be approved by federal judges, could give a boost to prosecutors seeking to indict other former Enron bigwigs if the Fastows agree to tell investigators everything they know.

    Still not charged in the financial scandal that opened a window on wider U.S. corporate misdeeds are former Enron chairman Ken Lay and former chief executive officer Jeff Skilling, both of whom have proclaimed their innocence.

    Andrew Fastow was the numbers whiz kid who masterminded Enron's use of off-the-books partnerships to hide billions of dollars in debt and artificially boost profits. Authorities say at least $45 million from those deals were siphoned off by him and his wife.

    Enron was the leading U.S. energy merchant firm and a Wall Street darling until its loose accounting, once praised by experts as innovative, led to a restatement of earnings and a $1.2 billion writedown of shareholder equity in the weeks leading up to a Dec. 2, 2001 filing for bankruptcy from which the company has not yet emerged.

    News reports say Fastow was expected to plead guilty before U.S. District Judge Kenneth Hoyt to some part of the 98 criminal charges against him in exchange for a 10-year sentence. He could have faced life in prison if convicted of the crimes.

    Lea Fastow earlier agreed to plead guilty to a tax fraud charge that was one of six counts against her in exchange for a five-month sentence. But U.S. District Judge David Hittner, who is handling her case, scotched that deal last week, saying he might want to impose a stiffer penalty and asked for a pre-sentencing investigation to help him decide.

    Negotiations have been carried out since then to work out a new deal that defense and government lawyers hope will be approved by Hittner.

    She could have faced up to 37 years in prison if convicted on all counts.

    Andrew Fastow's plea bargain was said by attorneys to be contingent on Hittner's acceptance of his wife's deal.

    The couple hopes to avoid overlapping jail sentences because of their two young sons, their lawyers said.

    If no plea bargains are reached, Lea Fastow is set to go to trial starting Feb. 10. Her husband is scheduled for trial in April.


    http://story.news.yahoo.com/news?tmpl=story&cid=568&e=4&u=/nm/20040114/bs_nm/enron_fastows_dc
     
  2. DKSuddeth
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    DKSuddeth Senior Member

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    Once again, they should have thought about their children before they ripped off 30 million dollars. They both should have to serve 10 years at a minimum AND pay the fines they are given AFTER they return the 30 million.
     
  3. wonderwench
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    DK,

    If the investigations into Lay and Skilling did not depend upon Fastow's cooperation, then I would agree. But the only way prosecutors are going to be able to make a case for the top guys is to flip Fastow. If he doesn't gain anything by cooperation, then he'll stay silent.

    In any case, he will miss 10 years of his children growing up - and his professional career has ended in one of the most disgraceful ways possible. He is a pariah. I doubt he will be able to rehab himself the way Milken did as he is not a billionaire.

    For the sake of instilling confidence in business, it's important that Enron be fully investigated up to and including Lay.
     
  4. wonderwench
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    NEWS FLASH:

    Wow!

    Fastow will cooperate with prosecutors. His sentence: 10 years in prison plus he will forfeit $24M

    Good.


    Former Enron Corp. financial chief Andrew Fastow agreed on Wednesday to cooperate with prosecutors in exchange for 10 years in prison as part of his pleading guilty to two criminal counts in the Enron scandal.

    In a hearing before U.S. District Judge Kenneth Hoyt, Fastow also agreed to forfeit $23.8 million in assets, most of which were previously frozen by federal authorities.


    http://story.news.yahoo.com/news?tmpl=story&cid=578&e=2&u=/nm/20040114/ts_nm/enron_fastows_dc
     
  5. DKSuddeth
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    DKSuddeth Senior Member

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    $620,000 a year for serving time. who said crime doesn't pay?

    Have they solidified the deal with the wife? anyone know for how much time?
     
  6. jimnyc
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    I wonder if I could work out a deal to go away for just a year? :D

    Seriously though, I'm glad they're getting what they deserve.
     
  7. wonderwench
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    Where did you get that figure? I haven't seen that referenced before.
     
  8. DKSuddeth
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    DKSuddeth Senior Member

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    looks like they got more compassion than they deserve. Lea Fastow will be receiving a 5 month sentence and a 6.2 million dollar bonus so that her children won't have to be without both parents at once.
     
  9. DKSuddeth
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    In one of the stories a few days ago it was reported that Fastow had received 30 million from the illegal accounting. If he returns 23.8 of it, that leaves 6.2 million unaccounted for. 6.2 million divided by 10 years in prison equals 620k a year.
     
  10. wonderwench
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    I would suspect that some of that money has already been spent and that some has already gone to the government in the form of taxes.

    They didn't nail him for tax evasion.

    I still think this is a good sentence. I would assume that he had to preview some of his evidence on Lay and Skilling to get this deal.

    In any event, the future developments are going to be quite interesting to observe.
     

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