A plea bargain with the wife of former Enron finance chief Andrew Fastow appeared to be in trouble Friday, and the judge in the case moved ahead with preparations for her trial.
A deadline of noon Friday for Lea Fastow to accept the judge’s conditions on the plea bargain passed with no word from her attorneys.
Without a deal for Lea Fastow, a separate plea agreement with Andrew Fastow seemed unlikely. That, in turn, could hinder the government’s investigation of other top executives at the failed energy giant, most notably Kenneth Lay and Jeffrey Skilling.
Prosecutors and Lea Fastow’s lawyers had worked out a deal for five-month prison sentence in exchange for her guilty plea to a single tax violation.
U.S. District Judge David Hittner said Thursday he would accept the guilty plea but reserved the right to determine a sentence he deemed appropriate after probation authorities conducted a pre-sentencing investigation.
The charge normally carries a range of 10 months to three years behind bars, the judge said. He gave Lea Fastow — a former assistant treasurer at Enron — until midday Friday to decide whether to accept his conditions.
After the deadline passed, the judge issued a statement saying Lea Fastow had failed to advise the court of her “willingness to receive a plea of guilty” under his conditions, and her trial would go ahead as scheduled Feb. 10.
“We’re a little disappointed,” said Leslie Caldwell, head of the Justice Department task force investigating the Enron collapse. She did not elaborate.
Lea Fastow’s attorneys did not immediately return calls seeking comment on whether the plea negotiations would continue. John Keker, Andrew Fastow’s lead attorney, had checked out of a Houston hotel.
Andrew Fastow, 42, is charged with fraud, money laundering and other offenses. His wife, also 42, is charged with conspiracy and filing false tax forms for allegedly participating in some of her husband’s deals.
The Fastows are free on bail — $5 million for him, $500,000 for her. His trial is set for April. Jury selection is under way in her case.
Andrew Fastow, who prosecutors allege arranged a web of schemes to enrich himself and others while inflating Enron’s profits and hiding debt, was negotiating a plea deal that could include 10 years in prison and a fine of at least $20 million, sources close to the case told The Associated Press.
Lea Fastow’s attorney Mike DeGeurin has said a short sentence for her was key to both plea negotiations because the Fastows have two sons, ages 4 and 8, and want to ensure that at least one parent is at home for them.
Judges are allowed to reject plea bargains they think reflect inappropriate terms, though normally the rejection comes after a defendant enters a plea.
The judge said Lea Fastow’s attorneys and prosecutors would be given copies of the questionnaires filled out by prospective jurors on Friday. They must produce lists by Wednesday of which jurors they want to eliminate.
Philip Hilder, an attorney for Sherron Watkins, the whistle-blower who tried to warn Lay of Enron’s impending doom, said that Lea Fastow’s attorneys and prosecutors have plenty of time before Feb. 10 to develop a deal that the judge would approve.
Andrew Fastow’s attorneys have not said if he would cooperate with investigators, but a guilty plea from him would be a significant break in the Justice Department’s two-year investigation into Enron’s 2001 collapse. He would be the highest-ranking Enron executive to go to prison.
Neither Lay nor Skilling has been charged. Both maintain their innocence.