When the FBI Comes Calling…®
April 8, 2004
Lea Fastow pulls plea, faces tax-evasion trial
Judge scuttles deal for ex-Enron figure
ROBERT MANOR
The wife of Andrew Fastow, a key player in the financial collapse of Enron Corp., pulled out of a plea agreement Wednesday after a federal judge would not guarantee her a brief prison term, but prosecutors and legal experts said that would not affect her husband's plea deal.
Lea Fastow withdrew her plea of guilty to a felony tax charge after U.S. District Judge David Hittner in Houston indicated he was not bound by the terms of a deal between her and the Justice Department.
The plea bargain called for a jail term of no more than five months, but Hittner has repeatedly kept open the possibility of a longer sentence.
Never a major figure in the Enron case, Lea Fastow earlier this year pleaded guilty to filing a false tax return. Her husband is the former chief financial officer of Enron who was accused of helping the company falsify its financial results.
Andrew Fastow has his own plea agreement with prosecutors that calls for him to testify against former chief executive Jeffrey Skilling and others in the case and to receive a 10-year prison term.
The Justice Department issued a statement saying Andrew Fastow is still obligated to work with prosecutors.
"The plea and cooperation agreement reached with Lea Fastow's husband . . . is not affected by today's rulings," said Assistant Attorney General Christopher Wray.
Andrew Fastow's attorneys and his spokesman did not return messages seeking comment.
Lawyers said they were surprised that Hittner would balk at a brief sentence for Lea Fastow.
"The way the judge has reacted to this is highly unusual," said Kirby Behre, a former federal prosecutor who is now a white-collar defense attorney. "She is not a major criminal."
Behre said the judge could be sending a message that sentencing is his responsibility and not something determined by negotiations between prosecutors and defense lawyers.
But lawyers also were surprised that Lea Fastow would take a chance on a trial and the possibility of a significantly longer sentence.
Federal sentencing guidelines call for shorter jail terms when defendants acknowledge their responsibility, and she is now scheduled to go to trial on all six original charges -- four counts of filing false tax forms and two counts of conspiracy.
Douglas McNabb, a federal defense attorney in Houston, noted that Lea Fastow still has time to negotiate a deal acceptable to the judge. And, of course, she could be acquitted at trial.