Fastow's wife starts prison term

She's to serve a year near violent offenders

July 13, 2004|By BLOOMBERG NEWS

HOUSTON - Lea Fastow, the wife of Enron Corp.'s former chief financial officer, began a one-year prison term today for her role in the accounting fraud that forced the company into bankruptcy in 2001.

Fastow, 42, a former Enron assistant treasurer, entered the Federal Criminal Detention Center in downtown Houston at 8:20 a.m. She pleaded guilty in May to a misdemeanor charge of not reporting $47,800 in income on her 2000 personal tax return. The sum was part of $204,444 in undeclared income that she realized between 1997 and 2000 from off-the-books partnerships that her husband used to hide Enron debt. Andrew Fastow gained $60 million from such partnerships, an Enron bankruptcy examiner found.

Andrew Fastow, also 42, pleaded guilty to the fraud in January but had refused to help the U.S. investigation of his company before his wife was indicted in May 2003. After that, the Fastows attempted to ensure through plea bargaining that their prison terms did not overlap so one parent would be free to care for their two sons, Jeffrey, 8, and Matthew, 5.

The sentencing judge rejected a government-recommended five-month prison term for Lea Fastow, heiress to a local grocery and real estate fortune.

"She's coming in as nobody, and she's not accustomed to that," said Ray Hill, a prison activist who hosts a Houston radio show about inmates. "The people she's going to be with are not very impressed with who she was."

Andrew Fastow still is helping prosecutors pursue former Enron Chairman Kenneth Lay, former Chief Executive Officer Jeffrey Skilling and others who have been charged in the fraud. He faces a proposed 10-year prison term.

Lea Fastow had hoped to serve her sentence at a minimum-security women's prison camp near Houston. Instead, federal prison officials assigned her to a high-rise detention center, where nearly 1,000 inmates inhabit 11 floors.

Only about 100 of the inmates presently in the facility are women, according to center spokeswoman Maria Douglas. Women are segregated from the male prisoners, some of whom are violent offenders, Hill said.

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