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U.S. District Judge David Hittner isn’t making it easy for Lea W. Fastow, the wife of one-time Enron Corp. chief financial officer Andrew Fastow, to end her federal court nightmare. Lea Fastow, a former assistant treasurer at Enron, pleaded guilty on Wednesday to one count of filing a false tax return. She wanted to enter a plea on Jan. 7, but Hittner put a wrench in her plans. He told her he wanted to wait until he saw a pre-sentencing report into her alleged crimes and background before deciding if he would accept the terms of her plea agreement. Then on Jan. 14, after Lea Fastow pleaded guilty, Hittner balked again. He refused a request from a federal prosecutor to dismiss the other five charges pending against Fastow. Fastow’s attorney, Mike DeGeurin of Houston, told Hittner that he would provide case law proving that Hittner should dismiss the charges. With his typical booming voice, Hittner told DeGeurin he welcomed a legal brief and would follow the law, but said he was not persuaded at that hearing that he was required to dismiss the charges to do so. “I’ve not heard of that before,” said Hittner, a federal judge for 18 years. Avoiding delay is in Hittner’s mind. Hittner said that if he rejects Fastow’s plea agreement after reading the pre-sentence report, and she decides to withdraw her guilty plea and asks to go to trial, he doesn’t want to have to delay her trial again. (It had been set for Feb. 10.) A delay would occur, he said, if prosecutors have to go back to a grand jury to re-indict Fastow. “I have a concern to dismissing five counts today when she’s pleading under a C case,” Hittner said in reference to Fastow’s ability to withdraw her guilty plea if he rejects the plea agreement. The plea calls for Fastow to serve five months in prison and another year of supervised release, with five of those months under house arrest. Also on Jan. 14, Andrew Fastow pleaded guilty to two conspiracy charges. The highest-ranking former Enron official to be charged in connection with the corporate scandal, Fastow agreed to accept a sentence of 10 years in prison and forfeit $23.8 million in assets. Andrew Fastow has agreed to cooperate with the Enron Task Force investigating the downfall of the bankrupt Houston energy company, which indicates prosecutors are aiming higher up the corporate ladder at Enron, presumably to the 50th floor where Ken Lay and Jeffrey Skilling had their offices when they were chairman and chief executive officer of Enron respectively. “They obviously had Lay and Skilling in their sights,” says Danny Easterling, a criminal defense lawyer at Houston’s Easterling & Easterling. Lawyers for Lay and Skilling say they do not believe truthful testimony from Fastow would lead to the indictment of their clients. But Leslie Caldwell, head of the Enron Task Force, told reporters after the plea hearings on Wednesday that the Fastow pleas are significant and “anyone who was committing criminal acts at Enron should be concerned. “ “For the first time, the Enron Task Force now has a seat on the 50th floor of Enron,” Caldwell said in reference to the floor where Lay and Skilling once worked. LIFE AFTER ENRON DeGeurin, of Foreman, DeGeurin & Nugent, declines to comment on Hittner’s unwillingness on Wednesday to dismiss the remaining charges against Lea Fastow. But he says a 5th U.S. Circuit Court of Appeals opinion, U.S. v. Cowan (1975), which overturned a federal judge’s refusal to grant a prosecutor’s request to dismiss charges against a defendant, supports his argument. Five Texas lawyers who try criminal cases in federal court say it was clearly unusual for the government to ask the judge to dismiss the charges prior to sentencing, but it wasn’t unusual for the judge to deny the request. “Normally they don’t dismiss charges until it’s all done. Period,” says Joel Androphy, a criminal defense lawyer at Berg & Androphy in Houston. “Hittner is not doing anything in this case out of the ordinary. … No judge in the system likes to be told what to do,” he says. “The bottom line is Hittner, like everyone else, wants an opportunity to assess if he’s doing the right thing,” Androphy says. Gerald Goldstein, a partner in San Antonio, Texas’ Goldstein, Goldstein & Hilley, sees nothing unusual in Hittner saying he wouldn’t dismiss the charges against Lea Fastow at the time of her plea. He says prosecutors generally make that motion at sentencing. Easterling says he can see why Hittner would be concerned that dismissing the charges on Jan. 14 could lead to a delay. “I think it’s judicial economy that the judge is thinking about,” he says. H.W. “Woody” Leverett Jr., a solo practitioner in Midland, Texas, says prosecutors usually don’t ask to dismiss charges until sentencing because the charges provide leverage to ensure a defendant will cooperate with the government. Leverett, who notes he handles many more federal drug cases than white-collar crime ones, says, “I have not seen a case where, at the guilty plea, the government moves for a dismissal of other counts of an indictment then and there. They usually wait for the real targets, the big dogs, to go to trial.” But a lawyer who represents another defendant in the Enron prosecution says Hittner had no business rejecting the request to dismiss the charges, which was a term of Lea Fastow’s plea agreement. The lawyer, who requests anonymity, characterizes Hittner’s behavior as “bizarre.” Sam Millsap, a former Bexar County, Texas, district attorney, says Hittner’s insistence on seeing the pre-sentence report before deciding whether to accept Lea Fastow’s plea, and his refusal to dismiss the other charges against her immediately, should send a warning to prosecutors. “What happened in the interplay between the judge and the prosecution is sending the prosecutors a very clear message: ‘No sweetheart deals, guys. I’m not just going to rubber-stamp,’” says Millsap, a criminal defense solo in San Antonio. “What you may be seeing is, from the judge, and this is speculation on my part … is the outrage of the community reflected more clearly in the judge’s responses than you do in the prosecution’s suggestions and recommendations,” Millsap says. Unlike her husband’s, Lea Fastow’s plea agreement does not require her to cooperate with the government. In Andrew Fastow’s case, lead prosecutor Caldwell said the government could go back and try Fastow on the 96 other charges pending against him if he does not cooperate fully with the investigation. Sentencing for both Fastows is set for April, but Andrew Fastow’s presumably will be delayed until after the government is done with him. Andrew Fastow, Enron’s CFO from March 1998 through October 2001, entered his guilty pleas at about 2:30 p.m. on Wednesday before U.S. District Judge Kenneth Hoyt of the Southern District of Texas. Wearing a gray suit and showing little emotion during the hour-long hearing, Fastow smiled some after the hearing when he greeted and embraced a number of family members and friends who were present in the courtroom. Fastow and much of the same group of family and friends also were present in the courtroom when Lea Fastow entered her guilty plea before Hittner less than two hours after her husband’s. Andrew Fastow pleaded guilty to conspiracy to commit wire fraud and conspiracy to commit wire and securities fraud, two of 98 charges lodged against him in an indictment. Like Hittner did for Lea Fastow, Hoyt warned Andrew Fastow that he could also reject his plea agreement, but the 10 years of prison time is the maximum for the two charges to which Fastow pleaded guilty. Fastow has agreed to “provide truthful, complete and accurate information” to the Enron Task Force, which is investigating the downfall of Enron, the formerly high-flying energy company in Houston that filed for bankruptcy in December 2001 after its stock price slid to less than a dollar a share and thousands lost their jobs. Caldwell, director of the Enron Task Force, told reporters following the court hearings that Fastow’s plea is significant because he admitted a role in the collapse of Enron. She also told reporters that the information Andrew Fastow would provide the task force would be significant for the continuing investigation into the downfall of Enron. Michael Ramsey, who represents ex-chairman Lay, was in Hoyt’s courtroom to hear Andrew Fastow plead guilty, and says that nothing he heard there would affect his client. “If he [Fastow] tells the truth … I don’t think Ken will be affected one way or another,” says Ramsey, a solo practitioner in Houston, who added that he does not expect criminal charges against his client. Like Ramsey, Skilling’s lawyer, Bruce Hiler, a partner in O’Melveny & Myers in Washington, D.C., says he is not fearful of Fastow’s testimony as long as it is truthful. Hiler says in a written statement, “The recent developments do not change our firm belief that an objective fact-finder would conclude that Mr. Skilling did nothing wrong. We’re sympathetic to the human story here and to those who feel pleas are better than facing a trial in the poisoned atmosphere that exists, but nothing here should change the truth.” “Bottom line, if the truth is told, there still will be no case against Jeff Skilling,” Hiler says in the statement. Federal prosecutor John Hemann told Hoyt that Andrew Fastow pleaded guilty to participating in two plans, one to fraudulently manipulate financial statements with the purpose of inflating the value of Enron stock, and another to enrich himself. The income tax charge against Lea Fastow relates to $208,444 in income she failed to report on tax returns for 1997 through 2000. According to the plea agreement, the unreported income includes $47,800 in payments from 1997 to 2000 from an Enron deal that were diverted to the Fastow family through former Enron executive Michael Kopper, who earlier negotiated a plea deal with prosecutors. Lea Fastow told Hittner she was pleading guilty because “I signed and filed a tax return that did not include income from Mike Kopper.” Under terms of his plea deal, Fastow will not go to prison until his wife is released from custody. They are the parents of two boys. Fastow’s attorney, David Gerger, of David Gerger & Associates in Houston, declined comment after the hearing. Fastow’s lead attorney, John Keker, a partner in Keker & Van Nast in San Francisco, was not at the hearing. He declines comment. But DeGeurin, in brief remarks to reporters, said, “We’re in a process of trying to resolve … what really is life after Enron for all of us.” Texas Lawyer contributing reporter Miriam Rozen contributed to this article.

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