Lea Fastow to Begin Serving Prison Term

From Associated Press

For the next year, home for the real estate and grocery heiress married to Enron Corp.'s former finance chief will be an 8-foot-by-10-foot cell.

Lea Fastow is under court order to report today to the federal lockup in downtown Houston, where she will serve a year for her misdemeanor conviction of signing a fraudulent tax return to help her husband, Andrew, hide ill-gotten income from schemes that fueled the energy company's crash.

The Fastow family home is a $696,000, two-story brick home in the affluent Southampton neighborhood. The federal detention center is a gray, 11-story building where Lea Fastow will live, wearing a tan uniform, and work, probably preparing food or washing bedding for less than 50 cents a day.

"She'll spend the vast majority of her time indoors under fluorescent lights," said David Novak, a former Microsoft Corp. consultant who served a year in a federal prison for mail fraud. He runs a consulting service in Salt Lake City, helping federal prisoners prepare for life on the inside.

A member of one of Houston's old-line families, Lea Fastow wasn't accused of masterminding shady partnerships or financing schemes that led to Enron's collapse. Although she had been assistant treasurer, the schemes largely were hatched after she quit Enron in 1997 to be a full-time mother.

She was indicted on six felony tax and conspiracy charges in April 2003, about six months after her husband's initial indictment on what grew into 98 counts of conspiracy, fraud, insider trading and other charges. She pleaded guilty to a charge of signing tax forms she knew didn't include ill-gotten income from her husband's schemes and admitted that she endorsed and deposited checks of ill-gotten gains disguised as gifts written to their sons.

Her lawyer said she helped persuade her husband to plead guilty to two counts of conspiracy and agree to a 10-year sentence. But the judge balked at a plea agreement that would have given Lea Fastow five months in prison and five months confined at home. Instead, he imposed the maximum sentence allowable.

She also had hoped to serve her time at a minimum-security prison camp for women in Bryan, about 90 miles northwest of Houston. There, the couple's two young sons could have enjoyed playground equipment during visits. She could have worn khaki shorts and T-shirts, played softball, walked on an outdoor track or perhaps tended one of the complex's vegetable and flower gardens. But the judge refused to recommend that the Federal Bureau of Prisons place her at any specific institution.

The Fastows' guilty pleas were a breakthrough in the 2 1/2-year investigation into the scandal that led to the energy giant's collapse. Both are cooperating in the prosecution of other former Enron executives. Last week, Enron founder and former Chairman Kenneth L. Lay became the 30th and highest-profile individual charged.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
60°