Former Enron Corp. chief financial officer Andrew S. Fastow was indicted Thursday on 78 federal counts alleging he masterminded a scheme to artificially inflate the bankrupt energy companys profits.
The indictment, returned by a grand jury in Houston and released in Washington by the U.S. Justice Department, is essentially a formal restatement of a criminal complaint brought earlier this month.
But the indictment is notable for the sheer number of charges, which include fraud, money-laundering, conspiracy and one count of obstruction of justice not included in the original complaint.
If convicted, Fastow faces hundreds of years in jail and millions of dollars in fines.
Fastow, 40, is free on $5 million bond in Houston and faces a Nov. 6 arraignment on the charges. He is the highest-ranking Enron official to be charged in the federal probe.
Deputy Attorney General Larry Thompson, head of the Bush administration's corporate fraud task force, said the indictment does not end the investigation into Fastow.
He added that federal officials "will use every appropriate measure to recover the ill-gotten gains of these corporate schemers."
Enron, No. 7 on the Fortune 500 list two years ago, filed for bankruptcy last year after revealing a $618 million loss and eliminating $1.2 billion in shareholder equity.
Prosecutors say Fastow and others created a scheme to defraud Enron and its shareholders through transactions with off-the-books partnerships that made the company look more profitable than it was.
Fastow also enriched himself, prosecutors say, by an estimated $30 million by using the entities to get kickbacks through family members who were investors and by siphoning off income that should have gone to others.
Maximum penalties for the each of the multiple charges against Fastow include 20 years for money-laundering, 10 years for wire fraud and five years for conspiracy. Fastow also faces several million dollars in fines.
Fastow is the most prominent Enron figure targeted so far by the Justice Department. Prosecutors are expected to pressure him to find out what he might say about his former colleagues, including former Enron chairman Kenneth L. Lay and former chief executive Jeffrey K. Skilling.
Fastows attorneys have said his work had the full approval of top Enron executives and that Fastow did not believe he committed any crimes.
Federal prosecutors say that beginning in 1997, Fastow created complex "special purpose entities" that kept poorly performing assets off Enrons balance sheets and falsely manufactured earnings, making the energy trading giant appear more financially sound than it truly was.
Four of the partnerships were detailed in federal court papers: