Former Enron CFO indicted on 78 federal counts

Oct. 31, 2002 — Andrew Fastow, the former Enron Corp. chief financial officer, was indicted Thursday on 78 counts associated with a possible illegal scheme to boost the energy company’s profits.

The U.S. Department of Justice announced that a grand jury in Houston had formally charged Fastow with fraud, conspiracy and money laundering, among other things.

The former Enron CFO posted a $5 million bond and is free until his trial date, which has not been publicly announced. The Securities and Exchange Commission (SEC) also has filed a civil lawsuit against Fastow. The suit says that he defrauded investors and violated securities laws.

The former energy giant filed for bankruptcy last year, shortly after the revelation that the company had a $618 million loss.

Prosecutors in the Enron investigation say that several high-ranking officials in the company were part of a plan to defraud shareholders and others through off-balance-sheet deals.

A federal money-laundering conviction would put Fastow in jail for 20 years, while a wire fraud conviction would carry 10 years and conspiracy would carry five years. If convicted of all the charges, Fastow could get more than a hundred years in prison and several million dollars’ worth of fines.

The move suggests that the Justice Department is struggling to build a case against other senior executives involved in the collapse, including Kenneth Lay, the former Chairman and Jeffrey Skiiling, the former chief executive. Legal experts argue that if Andrew Fastow had been willing to cooperate in helping the case against other individuals, his own indictment might not have been so swift.

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