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The substantial reduction from Andrew Fastow's original plea agreement of 10 years reflects the value of the former Enron CFO's testimony against Kenneth Lay and Jeffrey Skilling.
Stephen Taub, CFO.com | US
September 26, 2006
Former Enron Corp. CFO Andrew Fastow was sentenced Tuesday to six years in prison. The sentence is four years less than the 10 years he agreed to under a prior plea deal for his role in the fraud that plunged the one-time energy giant into bankruptcy.
The judge, in the case was not bound by Fastow's agreement with prosecutors. Bloomberg points out that Fastow's sentence came after he provided investors with a statement Monday implicating Enron's former banks in the fraud he orchestrated. It added that investors are suing a number of banks, including Merrill Lynch & Co. and Credit Suisse Group, in a bid to recover $30 billion in stock losses caused by the fraud.
Fastow's reduced sentence apparently also reflects the value of his testimony during the trial of his two bosses, Kenneth Lay and Jeff Skilling, who were both convicted in May. (Attorneys for Lay, who died before he could appeal, are seeking to have his conviction stricken from the record.).
Under his plea deal, Fastow had agreed not to ask for a lesser sentence, according to Bloomberg. However, in 2005, the Supreme Court ruled that mandatory federal sentencing guidelines in effect at the time of Fastow's agreement were only advisory, according to the wire service, a decision that opens the door for Fastow to seek a lighter sentence.
Fastow, who pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud, agreed to serve two consecutive five-year prison sentences and forfeited $23.8 million in cash and property, Bloomberg noted. The government dropped 96 other criminal charges in exchange for Fastow's cooperation.
Bloomberg noted that in court papers requesting a shorter sentence, Fastow's lawyers citied his cooperation with prosecutors and pointed out that former WorldCom Inc. CFO Scott Sullivan received five years, which was 22 fewer than he could have. Sullivan had testified against his former boss, Bernard Ebbers, who coincidentally began serving his serving his 25-year prison term on Tuesday as well.
Fastow lawyer David Gerger reportedly told the court in a memo that his client spent "literally months" helping prosecutors unravel Enron's complex financial scheme. He also credited Fastow with providing private documents that, for example, codified the illegal terms of many of the off-books partnerships he controlled.