Judge Orders Fastow Relatives’ Accounts Frozen

A federal judge has frozen brokerage accounts belonging to former Enron Corp. Chief Financial Officer Andrew Fastow’s family members after his brother tried to move millions of dollars out of one of the accounts, a person familiar with the case said Friday.

The warrants were signed Thursday by U.S. Magistrate Calvin Botley, but they were all sealed, including his order sealing the warrants, Botley case manager Paul Yebernetsky said Friday.

“The whole record is sealed,” he said, declining to elaborate.

Federal prosecutors met with Botley for several hours Thursday. No one from the Justice Department’s Enron team was available for comment at the federal courthouse in Houston on Friday, and a spokesman declined to comment.

Prosecutors sought the order because of the attempted transfer of several million dollars by Peter Fastow, Andrew Fastow’s brother, from one account to another as part of an unrelated civil case, said the source, who spoke on condition of anonymity.

Fastow’s lawyers referred all calls to spokesman Gordon Andrew, who declined to comment.

The Houston Chronicle reported Friday that the scope of the order was broader than the requested seizure of assets revealed in federal court Wednesday, when former Enron executive Michael J. Kopper pleaded guilty to fraud and money laundering.

The criminal complaint filed in Kopper’s case included a list of more than $23 million in bank and brokerage accounts held by Fastow and his wife, Lea, his family foundation, his brother Peter and several former Enron employees.

Kopper, the first former Enron executive to plead guilty to crimes related to the company’s failure, admitted to creating partnerships designed to enrich himself, his former boss Fastow and others at Enron at the expense of the company and its shareholders.

As part of his plea agreement, Kopper agreed to surrender $12 million he gained illegally through his accounting machinations. The money will be paid to the Justice Department and the Securities and Exchange Commission.

Part of that $12 million is $4 million in a Charles Schwab account that is on the list of accounts prosecutors wanted to freeze. Kopper’s attorney, David Howard, said Kopper has agreed to surrender the money.

Fastow has not been charged with wrongdoing in Enron’s collapse. Kopper, however, told U.S. District Judge Ewing Werlein in court Wednesday that it was Fastow--whom he referred to only as “the Enron CFO”--who provided loans for investments, received kickbacks or negotiated deals that benefited the partnerships rather than Enron.

Fastow, his wife and his family’s foundation face seizure of bank accounts holding more than $14 million if prosecutors can show that the funds are the product of money laundering when they were involved in the investments.