On a day of reckoning for key figures in the biggest corporate scandal of recent years, former Enron chief financial officer Andrew Fastow has been sentenced to six years in jail on the day that former WorldCom chief executive Bernie Ebbers began a 25-year sentence.
Fastow was handcuffed and taken into custody immediately after Houston judge Kenneth Hoyt passed sentence, telling the former Enron executive that he deserved to be prosecuted but not to be persecuted.
Fastow co-operated with prosecutors in building the case against former Enron chief executives Kenneth Lay, who died in July, and Jeffrey Skilling, who will be sentenced next month. Lay and Skilling sought to blame Fastow for the company's collapse, claiming they knew little of an elaborate web of transactions he used to hide Enron's losses.
"While you were painted as the ringleader, the provocateur, my investigation found that while you were drunk on the wine of greed, you were but one of several . . . Prosecution is appropriate but persecution is not," the judge said.
A tearful Fastow apologised for his role in the Enron fraud and said he accepted his jail term as part of a process of repentance.
In a declaration filed in a separate investor securities fraud case yesterday, however, Fastow sought to spread the blame, identifying Merrill Lynch, Credit Suisse, the Royal Bank of Scotland Group and Barclays as financial institutions who knew of his schemes at Enron.
"In many instances, the financial transactions in which I engaged related to Enron were done with the knowledge of senior management, some of Enron's banks, and others, and were done primarily to meet Enron's financial reporting and credit-rating targets," he said.
Fastow said the banks helped him devise complex financial structures that made it hard for outsiders to accurately determine the state of Enron's finances.
"We told certain banks of our financial objectives and they, in many instances, created solutions utilising complex financial structures . . ."
Ebbers was due to report to a federal prison yesterday to begin a 25-year sentence for orchestrating an $11 billion (€8.6 billion) fraud at WorldCom. The 65-year-old former chief executive was convicted last year of nine counts of conspiracy, securities fraud and other crimes that led to the telecommunications company's July 2002 bankruptcy.
