Top Former Enron Executive 'to Plead Guilty'

The former finance chief of the disgraced energy company Enron, Andrew Fastow, is set to change his plea from innocent to guilty in charges relating to the scandal that brought down Enron, as part of a plea bargain, according to reports.

The New York Times reports today that Mr Fastow has agreed to plead guilty to fraud charges and has given evidence against another former Enron executive, who will also be charged this week.

Mr Fastow could face a ten-year sentence, according to the paper.

A potential agreement for Fastow to pay at least $20m (£11m) to the securities and exchange commission and his plea bargain are contingent upon a separate plea deal being reached for his wife, Lea, former assistant treasurer at Enron, before she left in 1997.

The district judge David Hittner, who is presiding over Lea Fastow's case, yesterday threw out a plea deal that would have called for her to serve five months in prison and be released before her husband's trial began.

The judge said the deal was too binding and he wanted more leeway on her sentence.

The Fastows, who have two young children, do not want to agree to any plea deal that would force them to serve their sentences at the same time.

Andrew Fastow's plea deal, if finalised, would go before Judge Kenneth Hoyt.

In November, plea talks with Lea Fastow, which also would have called for a five-month sentence, broke down shortly before Judge Hittner denied her request to move her February 10 trial outside of Houston.

Mr Fastow would be the highest-ranking executive to plead guilty in the criminal investigation of Enron.

The company's collapse into bankruptcy in late 2001 was the first in a series of scandals that rocked corporate America and shook investors' confidence in the stock market.

Mr Fastow allegedly masterminded complicated accounting schemes that hid Enron's inflated profits and allowed him to enrich his family and selected friends and colleagues.

Prosecutors claim Mr Fastow benefited to the tune of $30m from side-deals.

The potential plea deal could raise the likelihood of prosecutors bringing charges against Enron's former top executives, Kenneth Lay and Jeffrey Skilling.

Authorities also were preparing criminal charges against Enron's former chief accountant, Richard Causey.

The Associated Press news agency quotes unnamed sources as saying Mr Causey could surrender today or tomorrow.

Mr Causey was responsible for reviewing all Enron transactions with a partnership called LJM, which was controlled by Mr Fastow.

Prosecutors claim LJM was used to conduct sham transactions to improve Enron's financial health fraudulently and enrich Mr Fastow and others.

The 98-count indictment against Mr Fastow says Mr Causey and others had a secret side agreement with Mr Fastow that LJM would not lose money in its dealings with the energy giant.

If attorneys and judges agree on the proposed plea deal with Mr Fastow, the former executive could appear in court to change his innocent plea to guilty today, according to reports.

When Mr Fastow was indicted, in October 2002, his lawyers said Mr Skilling and Mr Lay approved his work.

Mr Skilling and Mr Lay have not been charged and both maintain their innocence in the implosion that wiped out billions of investor and employee savings and resulted in thousands of layoffs and dozens of lawsuits.

The Houston Chronicle quotes anonymous sources as saying that federal prosecutors are offering Mr Fastow a 10-year sentence.

The former financial chief has been charged with fraud, money laundering, insider trading and other charges.

He is free on $5m bail pending trial scheduled for April. If convicted, the maximum penalties for the charges against Fastow include 20 years in prison for money laundering, ten years for securities fraud and five years each on the mail fraud and conspiracy charges.

Lea Fastow, 42, is charged with six counts of conspiracy and filing false tax forms for allegedly participating in some of her husband's deals.

Mr Causey, 43, was dismissed in February 14 2002, after a board of directors' report noted his failure to properly monitor the LJM partnership that became a focal point of the fraud investigation.