Lea Fastow to Face Reduced Charge

Prosecutors filed a substitute misdemeanor tax charge against the wife of former Enron Corp. finance chief Andrew Fastow on Thursday in a new plea bargain to forestall a June trial that neither side wanted.

The new charge means former Enron assistant treasurer Lea Fastow will not serve more than a year in prison, although she was initially charged with six felony counts that could have led to 37 years.

It is the second deal Fastow’s lawyers have struck with Enron Task Force prosecutors. The first blew up April 7 when the judge on the case refused to limit her sentence to five months in prison.

U.S. District Judge David Hittner must approve this deal.

The plea hearing is set for May 6, at which time Fastow is expected to plead to the misdemeanor charge. Prosecutors would then drop the six felony counts of filing a false tax return and conspiracy to commit money laundering and fraud.

That will preclude a trial that was scheduled to start on June 2 in Brownsville, Texas. The defense did not want a trial because of the potentially long prison term that could result.

In Thursday’s filing, the Justice Department’s Enron Task Force said Lea Fastow delivered a 2000 income tax return she knew to be false.

Although it included nearly $49 million in income, it omitted other money she and her husband had received that year. The maximum sentence for the misdemeanor is 12 months in prison and a $10,000 fine.

Fastow’s lawyer, Mike DeGeurin, did not return calls seeking comment.