- College algebra to be removed from Southeast required curriculum (10/10/17)1
- State declares test results for schools invalid (10/4/17)2
- Child-custody advocate: State law needs fix to provide parents with more equal custody (10/12/17)
- Cape Chinese restaurant purchases old Ponderosa property in Perryville (10/10/17)
- One of Cape's oldest mom-and-pop restaurants opens in new location (10/10/17)
- Past Rowdy the Redhawk mascot's identity revealed (10/15/17)
- Cancer will 'change your life, but it doesn't have to rule it' (10/8/17)
- Bills addressing equal child custody to be filed, legislators say (10/13/17)
- Ships to stay docked in Cape a week longer (10/10/17)
- Janet Koenig creates painted quilts to add flair to local barns (10/13/17)
Former Enron executive indicted on 78 counts
HOUSTON -- Former Enron Corp. chief financial officer Andrew Fastow was indicted Thursday on 78 federal fraud, money laundering and other charges, making him the highest-ranking company official charged in the probe.
The indictment, returned by a grand jury in Houston, alleges that Fastow masterminded schemes to artificially inflate the energy company's profits. If convicted, he faces hundreds of years in jail and millions of dollars in fines.
Fastow, 40, is free on $5 million bond and faces a Nov. 6 arraignment.
"These charges are full of sound and fury, but the truth about Enron has yet to be told," said Fastow's attorney, John W. Keker.
Prosecutors are expected to pressure Fastow to learn what he might say about the actions of his colleagues, including former Enron chairman Kenneth Lay and former chief executive Jeffrey Skilling.
Neither Lay nor Skilling has been charged.
Deputy Attorney General Larry Thompson, head of the Bush administration's corporate fraud task force, said the indictment does not end the investigation into Fastow. He also said federal officials "will use every appropriate measure to recover the ill-gotten gains of these corporate schemers."
Enron, No. 7 on the Fortune 500 list two years ago, filed for bankruptcy Dec. 2 after revealing a $618 million loss and eliminating $1.2 billion of shareholder equity.
Enron's collapse was the first in a series of corporate scandals that rocked the business world and roiled the stock market. Investors lost huge amounts of money and former Enron employees lost most of their retirement savings. Accounting firm Arthur Andersen LLP went under soon after it was found guilty in June of obstruction of justice in shredding documents related to its Enron audits.
The indictment alleges that Fastow and others created schemes to defraud Enron and its shareholders through transactions with off-the-books partnerships that made the company look more profitable than it was.
Prosecutors also allege Fastow gained an estimated $30 million from kickbacks funneled through Michael Kopper, his former aide, and investors or family members. Investigators say Fastow also siphoned off income from the partnerships.
Maximum penalties are 20 years for money laundering, 10 years for wire fraud and five years for conspiracy in addition to fines.
Asked if the indictment could induce Fastow to cooperate with prosecutors, Assistant U.S. Attorney Andrew Weissmann said, "These are significant charges that carry significant jail time."
Fastow's attorneys have said top Enron executives approved his work and that Fastow did not believe he committed any crimes.
The indictment alleged that the schemes' goals included:
--Falsification of Enron's reported financial results to make the company appear more financially sound than it was to Wall Street, credit rating agencies and investors.
--Artificial manipulation of Enron share prices.
--Illusion of business skill from Fastow and other Enron senior managers.
--Personal enrichment at the expense of shareholders "to whom they owed a duty of honest services."
--Use of complex "special purpose entities" that kept poorly performing assets off Enron's balance sheets and falsely manufactured earnings.
Kopper provided much of the information used by prosecutors to build their case against Fastow. He pleaded guilty to money laundering and wire fraud in August for creating and participating in some of the schemes. Kopper faces up to 15 years in prison at his scheduled April 4 sentencing.
The new obstruction of justice charge against Fastow says that in August and September 2001 he "did knowingly, intentionally and corruptly persuade and attempt to persuade" Kopper to withhold records and documents from investigations and "alter, destroy, mutilate and conceal" laptop and desktop computers and information they contained.
In another case, former Portland, Ore., Enron energy trader Timothy Belden pleaded guilty Oct. 18 to one count of conspiracy to commit wire fraud in a scheme to drive up prices during California's energy crisis.
Belden, who faces up to 5 years in prison when he is sentenced in April, is cooperating with investigators.
The Securities and Exchange Commission has also filed a civil lawsuit against Fastow claiming that he defrauded investors and violated securities laws. The SEC is seeking unspecified penalties against Fastow and repayment of his allegedly ill-gotten gains.