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Wednesday, 2 October, 2002, 19:29 GMT 20:29 UK
Enron finance chief charged with fraud
Andrew Fastow (right) being arrested
Andrew Fastow was led away in handcuffs
Andrew Fastow, the man who managed Enron's murky finances, has surrendered to the FBI and been charged with fraud.

The 40-year-old accountant is accused of creating and managing the complex web of partnerships that disguised the true state of affairs at the disgraced firm.


We aim to put the bad guys in prison and take away their money

Larry Thompson, deputy attorney general
He is alleged to have made a personal fortune in kickbacks from the partnerships.

The Department of Justice has charged him with fraud, money laundering and conspiracy in connection with Enron's multi-billion dollar collapse.

The government is also seeking to freeze and seize $37m of allegedly illegally-gotten gains.

The BBC's Mark Gregory says Mr Fastow's arrest marks the highlight so far in the campaign to convict those responsible for America's largest corporate scandal.

Enron filed for bankruptcy in December, after the extent of financial mismanagement by top executives became apparent.

A way to Lay?

Mr Fastow was arrested and led to a Houston courtroom in handcuffs, before being charged by federal prosecutors.

An agreement has been reached between prosecutors and defence lawyers to release Mr Fastow on a $5m bond.

Maximum penalties for the charges against Mr Fastow include 20 years in prison for money laundering, 10 years for security fraud and five years each for mail fraud and conspiracy charges.

Michael Kopper
Did Michael Kopper spill the beans on Andrew Fastow?

Michael Kopper, Mr Fastow's right hand man who struck a deal with prosecutors in August, is presumed to have revealed information on the actions of his former boss.

If Mr Fastow chooses to plead guilty and co-operate with prosecutors, he may testify against two former chief executives at Enron - Jeff Skilling and Kenneth Lay.

Federal prosecutors have been trying to nail lead suspects in the Enron case for more than nine months.

'Systematic corruption'

Deputy attorney general Larry Thompson said that the charge alleged that Mr Fastow not only defrauded investors, but that he also defrauded Enron itself through a number of complex financial deals.


He (Mr Fastow) never believed he was committing any crime

John Keker, Mr Fastow's attorney
"In the process, as alleged in the complaint, Fastow and his co-conspirators systematically and thoroughly corrupted the business of one of the largest corporations on the world," said Mr Thompson.

But Mr Fastow's attorney, John Keker, said his client did not believe he had done anything wrong.

"Enron hired Andy to arrange off-balance sheet financing," Mr Keker said.

"Enron's board of directors, its CEO, and its chairman, directed and praised his work. Accountants and lawyers reviewed and approved his work.

"He never believed he was committing any crime."

Silent stance

Mr Fastow had not previously broken his silence on his role in the Enron affair.

Kenneth Lay
And will Andrew Fastow dish the dirt on Kenneth Lay?

He remained defiant before congressional investigators.

Enron's whistleblower, Sherron Watkins, described him as an arrogant and sometimes violent boss.

But friends in Houston have described him as a family man, who loved his children and regularly attended synagogue.

Figuring it out

Prosecutors are also attempting to seize his newly built $2.6m home in Houston's wealthiest district.


No matter how sophisticated or complex their schemes might be, we will figure it out

Stephen Cutler, SEC

"Our strategy is straightforward," said Mr Thompson.

"We aim to put the bad guys in prison and take away their money."

The US financial watchdog simultaneously filed a civil lawsuit against Mr Fastow.

"No matter how sophisticated or complex their schemes might be, we will figure it out and make them answer for their wrongdoing," said the SEC's director of enforcement, Stephen Cutler.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Patrick O'Connell
"It is highly likely other charges will follow"
Professor John Coffee, Colombia Law School
"Essentially these have become orchestrated events"
The BBC's Mark Gregory
"He [Fastow] is an absolutely central figure in the Enron scandal"

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02 Oct 02 | Business
29 Aug 02 | Business
22 Aug 02 | Business
21 Aug 02 | Business
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