Enron's Fastow Seeks — and Receives — Leniency

White-Collar Crime

  • In another high-profile case, Bernard Ebbers drove a Mercedes through the gates of the federal prison in Oakdale, La., Tuesday to begin a 25-year sentence for his role in Worldcom's $11 billion accounting fraud.
  • Scroll down for a summary of recent white-collar crime cases.

Enron's former finance chief, Andrew Fastow, is sentenced to six years with an additional two years under supervised release. Fastow had worked out a plea deal with prosecutors back in 2004, when he agreed to a prison term of up to 10 years. But Fastow asked Federal Court Judge Kenneth Hoyt for a shorter sentence.

Three years ago, Fastow competed with Enron's former CEO Jeffery Skilling for the title of the most despised man in Houston. But today, not a single person showed up to oppose Fastow's request for lenience.

Instead, there was a chorus of voices all saying the same thing: that Andrew Fastow had profoundly changed. Assistant U.S. Attorney John Heuston, one of the Enron prosecution team's top lawyers, told Hoyt that the government now believes it could not have won convictions of Enron's two top executives, Ken Lay and Skilling, without Fastow's help.

"Mr. Fastow's decision to cooperate allowed us to take the jury inside the company's executive suites," Heuston said.

The prosecutor told the judge that in his 13 years as a federal prosecutor, he'd never seen anyone undergo such an extensive transformation.

But it was not only grateful federal prosecutors who stepped up to the plate.

Now that the criminal trials are over, Fastow has begun helping the lawyers who represent Enron's investors, who lost billions of dollars when the company imploded. They're suing several banks, who they say conspired with Enron to make bank loans appear as corporate profits by concocting sham transactions.

When if was Fastow's turn to speak, he wept as he apologized to Enron's employees, its investors and his family.

"I'm ashamed of what I did, I wish I could undo what I did at Enron but I can't," Fastow said.

He said he would accept whatever sentence was imposed without bitterness.

Judge Hoyt told Fastow that he'd been drunk on the wine of greed. But he said Fastow had become a scapegoat for Enron's sins and that his family had suffered acutely. After he was sentenced, Fastow was allowed a few seconds to hug his distraught wife and then was led away by federal marshals.

White Collar Crooks: Pleas and Punishments

Enron's former finance chief, Andrew Fastow, is sentenced today to six years for his financial wrongdoings. Here's how other white-collar criminals have fared in recent encounters with the justice system.

Martha Stewart, CEO of Martha Stewart Living Omnimedia, Inc.

The Charge: Securities fraud, obstruction of justice, conspiracy and making false statements.

The Plea: Innocent.

Sentence Reduction Effort: Offered to work up to 1,000 hours for Women’s Venture Fund, a nonprofit organization based in New York, in order to get a reduced sentence. (Stewart was not sentenced to perform such community service and does not appear to have followed through on her offer.)

Sentence: Five months in prison, two years probation, five months of home confinement after her release and $30,000 fine.

Outcome: Served full term in prison and house arrest; three extra weeks of home confinement were later added to the sentence.

***

Sam Waksal, Founder of ImClone Systems

The Charge: Six counts, including securities fraud, bank fraud, conspiracy to obstruct justice and perjury.

The Plea: Guilty.

Sentence Reduction Effort: Waksal said that ImClone's cancer research and his own humanitarian works should yield a lighter sentence. It didn't work.

Sentence: Seven years and three months in prison and $4 million in fines and back taxes.

Outcome: Currently serving sentence.

***

Bernard Ebbers, WorldCom CEO

The Charge: One count of conspiracy, one count of securities fraud and seven counts of false regulatory filings.

The Plea: Innocent.

Sentence Reduction Effort: Appealed verdict, claiming he was denied a fair trial and that his lengthy prison sentence was unreasonable. Appeal was overturned.

Sentence: 25 years in prison.

Outcome: Began his sentence Tuesday.

***

Richard Causey, Enron’s chief accounting officer

The Charge: Securities fraud.

The Plea: Guilty.

Sentence Reduction Effort: Agreed to cooperate with authorities in exchange for shorter sentence.

Sentence: 7 years in prison, though may be shortened to 5 if he sufficiently cooperates with authorities in pending trials of other Enron execs. Must forfeit $1.25 million to the government.

Outcome: Won't begin to do time until other Enron trials are over.

***

Diana Brooks, former CEO of Sotheby’s auction house

The Charge: Price-fixing.

The Plea: Guilty.

Sentence Reduction Effort: She agreed to be a key cooperating witness against Sotheby’s chairman A. Alfred Taubman. But she was not granted any leniency.

Sentence: 3 years probation, including 6 months of house arrest. Must pay $350,000 in fines and perform 1,000 hours of community service.

Outcome: Served full term and paid reparations.

— Sources: Court TV News, the New York Times

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.