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Lea Fastow Reportedly Faces U.S. Charges

The ex-executive and wife of onetime Enron CFO allegedly gained from off-books entities.

May 01, 2003|From Bloomberg News

Lea Fastow, the wife of former Enron Corp. Chief Financial Officer Andrew S. Fastow, will face undisclosed federal charges today, cable television channels CNBC and CNN reported.

The nature of the charges wasn't clear, CNBC said. Fastow's wife worked at Enron as assistant treasurer until 1997. Prosecutors claim she received payments from off-the-books partnerships that her husband controlled, the financial news network said.

Andrew Fastow pleaded innocent in November to 78 counts of fraud, money laundering and other charges. He has been accused of being the mastermind of the scheme that led to the 2001 collapse of Enron, which had been the world's largest energy trader.

Prosecutors said in a December filing they might seek a new indictment against Andrew Fastow, indicating the government would add charges or defendants in the case.

Lea Fastow couldn't immediately be reached for comment. Gordon Andrew, Andrew Fastow's spokesman, declined to comment. The Justice Department also declined to comment. Andrew Fastow's attorney, John Keker, didn't return a message left at his office. Enron spokesman Mark Palmer didn't return a call for comment.

Houston-based Enron was forced to restate $586 million in earnings because of improper accounting tied to partnerships used to hide billions of dollars in debt. Enron's December 2001 bankruptcy filing was at the time the largest in U.S. history.

Andrew Fastow created partnerships including LJM2 Co-Investment, according to prosecutors. He sold his interest in LJM2 to Enron executive Michael Kopper in July 2001. Kopper pleaded guilty in August to fraud and money laundering charges in connection with the partnership. He also agreed to cooperate with prosecutors' probe of Andrew Fastow's actions.

CNBC also reported that Kenneth Rice, the former head of Enron's failed broadband division, could face criminal charges.

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