Risk & Compliance

House Warming, Texas Style

Reports out of Houston say the Justice Department is about to seize some of Andrew Fastow's assets -- including his new house.
Joseph RadiganAugust 23, 2002

The deal struck between former Enron Global Equity head Michael Kopper and the SEC is apparently providing a wealth of information to government investigators. In fact, Kopper’s cooperation will likely help the Commission and the Justice Department’s Houston-based Enron Task Force in their joint quest to prosecute former executives of the now-disgraced energy company.

For example, as The Houston Chronicle reported on Thursday, the Kooper plea agreement lists $23 million in criminal proceeds that the government is now prepared to seize. More than half that amount, or at least $14.2 million, is in accounts held by Enron’s ex-CFO, Andrew Fastow, his wife Lea, other Fastow family members, and an entity called the Fastow Family Foundation. In addition, prosecutors want to seize the $2.6 million house Fastow recently built in River Oaks, Houston’s wealthiest neighborhood.

That impending seizure surprised many. In fact, lawyers told the Houston newspaper that property seizures are a tactic normally reserved for prosecutions against drug dealers. The lawyers also told the paper that it’s unusual for the government to seek forfeiture from citizens who have not yet been indicted. To date, no charges have been leveled against Fastow, or any other member of Enron’s senior management team.

The funds that prosecutors are going after reportedly include a $7.7 million account held at either J.P. Morgan or Chase Bank by Fastow and his wife, a $1.4 million account the couple had at Chase, $4.6 million held by the Fastow Family Foundation at J.P. Morgan Chase, and $500,000 held in a Charles Schwab account by Peter Fastow.

The property list also included an account worth $916,137 at First Union Security held by former Enron treasurer Ben Glisan. According to The Chronicle, the speculation in Houston legal circles is that the listing of Glisan’s account could mean that he is ready to cooperate with prosecutors.

When asked to comment on Kopper’s agreement with the Commission, Enron’s interim CEO, Stephen Cooper, called the guilty plea “a good thing.”