With the way juries are these days, Fastow should take what the judge wants to give her. A jury finds her guilty and the judge will really stick it to her. He is also giving them a break by letting the husband stay out until she finishes serving her sentence.
Judge Rejects Plea Bargain in Enron Case
HOUSTON (Reuters) - A federal judge on Wednesday rejected a plea bargain struck with the wife of Enron's former finance chief, prompting her to withdraw her guilty plea and cease cooperating with the investigation of the energy trader's collapse into bankruptcy.
Lea Fastow, a former Enron assistant treasurer, changed her plea to not guilty after U.S. District Judge David Hittner rejected the deal worked out between prosecutors and Fastow's lawyers. For months, Hittner suggested he would not stick to the agreed prison term of five months.
Hittner, speaking from the bench, said he saw no reason why Fastow should serve less than the 10 to 16 months recommended by probation officials.
On Jan. 14, Fastow pleaded guilty to one count of filing a false tax return. On the same day, under a separate plea bargain, her husband, Andrew Fastow, pleaded guilty to wire and securities fraud and agreed to cooperate in the Enron (Other OTC:ENRNQ - news) probe.
Assistant Attorney General Christopher Wray said Andrew Fastow's guilty plea and cooperation agreement were not affected by today's developments.
Prosecutors charged Lea Fastow as they pressured her husband for more than a year to cooperate with their investigation and implicate others higher on the corporate ladder at Enron.
A month after Andrew Fastow pleaded guilty, the U.S. Justice Department (news - web sites)'s Enron Task Force used his testimony to charge former Enron Chief Executive Officer Jeff Skilling with multiple conspiracy, fraud and insider-trading counts. Skilling has pleaded not guilty.
Prosecutors are also investigating former Enron Chairman Kenneth Lay. He has not been charged with a crime and has denied any wrongdoing.
Enron was the nation's largest energy trader and a Wall Street darling before it unraveled in 2001 amid disclosures it had used off-the-books deals to inflate profits and hide billions of dollars of debt.
After restating earnings and cutting shareholder equity by $1.2 billion, the company filed for bankruptcy in December 2001 and has yet to emerge.
Andrew Fastow admitted to engineering secret deals that hid Enron debt and spruced up the company's financial statements, all the while pocketing tens of millions of dollars for himself.
Under their plea bargains, Andrew Fastow was to begin serving his prison term after his wife had served her own and been released, ensuring that their young children would not be left without at least one parent.
LEA FASTOW TRIAL SET
Hittner said Lea Fastow would go on trial June 2 in Brownsville, Texas. Initial charges against her have been reinstated: six criminal counts of false tax reporting, fraud and money laundering.
Hittner angrily struck down objections from defense lawyers and prosecutors who wanted the plea bargain to go forward, silencing them repeatedly.
The judge told Lea Fastow that a new pre-sentencing report would be prepared that would likely recommend a prison term of 15 to 21 months on the charge of filing a false tax return.
Mike DeGeurin, Fastow's attorney, accused the judge of threatening his client with a long prison term.
Hittner shot back in a booming voice, "I'm not threatening anything, I'm just stating the law."
Outside the courthouse, DeGeurin told reporters he will have to "go back to the drawing board and think about this."
"All I can say is I'm a bit embarrassed for everyone who was there to watch what just happened," the lawyer said.
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