Andrew Fastow, the 42-year-old financial whiz kid who helped propel Enron Corp. to the top of the energy merchant industry only to see all of his intricate financial schemes sink the company into bankruptcy, pleaded guilty Wednesday to conspiracy to commit wire fraud and conspiracy to commit securities fraud. He faces a 10-year prison sentence, forfeiture of $23.8 million in cash and assets, and he is permanently barred from serving as an officer or director of a public company.

His wife, Lea Fastow, also pleaded guilty Wednesday to one count of filing a false tax return. She was an assistant treasurer at Enron until 1997.

The guilty pleas by Andrew Fastow in Houston relate to off-balance sheet transactions dubbed Talon and Swap Sub, which in turn led to his Southampton partnership that netted $19 million. The statement Fastow gave prosecutors in his plea agreement reads, “While CFO, I and other members of Enron’s senior management fraudulently manipulated Enron’s publicly reported financial results. I also engaged in schemes to enrich myself and others at the expense of Enron’s shareholders and in violation of my duty of honest services to those shareholders.”

The former CFO was in the courtroom Wednesday, and a gallery of supporters were also there, including his mother. He quietly answered questions for U.S. District Judge David Hoyt as to whether he understood the charges and stood to declare his guilt on the two counts. Hoyt clearly stated on several occasions that he was not bound by the agreement unless Fastow complies with all of it. Following the hearing, Fastow’s supporters filed by him, whispering words to him. His mother cried outside of the courtroom following the hearing.

His plea arrangement states that if he successfully cooperates with the federal investigation, he will be sentenced to 10 years in prison. He also agreed to a Securities and Exchange Commission fine of $23.8 million in cash and assets, which includes two homes in Galveston and one in Norwich, VT. However, with the guilty plea, Fastow now will face a plethora of shareholder lawsuits, and along with attorney fees, his plea could lead to the loss of most of his remaining fortune.

Fastow most likely will remain free on bond and not begin his sentence until he has spent several months assisting federal investigators prepare and execute cases against others at Enron. He is scheduled to be sentenced on April 19 following a pre-sentencing investigation. Hoyt has the discretion to accept, decrease or increase the 10-year term at that time.

His plea and expected cooperation may pave the way for federal investigators to net others within the bankrupt energy company. The only executives higher than Fastow — and who so far have not been indicted or charged with any crimes — are former CEO Jeffrey Skilling and former Chairman Kenneth Lay.

Skilling, Fastow’s direct superior, and Lay have maintained their innocence since an investigation into the company began in late 2001. Skilling resigned in August 2001; Lay resigned following the bankruptcy. Lay’s attorney Michael Ramsey said Wednesday that Lay has no worries if Fastow tells the truth. And Bruce Hiler, Skilling’s attorney, said his client had done nothing wrong.

“We understand the pressure to enter a plea rather than stand trial in the poisoned atmosphere that has been created around Enron, but that doesn’t change the truth as to my client,” Hiler said.

When Fastow was first charged in October 2002, he said through his lawyers that he never believed he was committing any crimes. His lead attorney John Keker said then, “Enron hired Andy to arrange off-balance sheet financing. Enron’s board of directors, its CEO, and its chairman, directed and praised his work. Accountants and lawyers reviewed and approved his work.”

In 2001, Enron was the seventh largest company in the United States, and its bankruptcy in December 2001 was the largest filing at the time in U.S. history. At its height in the fall of 2001, its stock traded above $90. On Wednesday, the over-the-counter offering (ENRNQ) was priced at 6 cents.

The guilty plea by Andrew Fastow resolves 98 indictments against him for fraud and other crimes he allegedly committed while working at Enron. He also has pledged to cooperate with the federal investigation. During the lengthy plea negotiations, Fastow apparently has been providing information already to investigators about other former Enron officials.

With the guilty plea, the government is expected to file a criminal complaint against Richard Causey, Enron’s former chief accounting officer. The charges against Causey, which had been rumored earlier this month, were put on hold pending the Fastow plea negotiations. When asked about his client Causey, his attorney Mark Hulkower said, “Rick Causey is a decent and honorable man who has done nothing wrong.”

Apparently, the plea agreement by Fastow and his wife hinged on efforts to negotiate allowing Lea Fastow to serve a term before her husband, which would allow one parent to be with the couple’s two boys, who are eight- and four-years-old. An earlier agreement, which fell apart last week, would have allowed Lea Fastow to serve five months in prison and five months in home detention. However, U.S. District Judge David Hittner, who is overseeing Lea Fastow’s case, had balked at the arrangement and wanted to reserve the right to increase the sentence following a pre-sentencing report.

The new agreement allowed Lea Fastow to plead guilty to one count of filing a false tax return and serving a sentence, both in jail and under house detention, for as long as three years. Federal guidelines call for a sentence of 10-16 months. Lea Fastow, who left Enron in 1997, originally had been charged with six criminal counts. A pre-sentencing report also will be completed on her before her sentence is imposed.

To date, six other former Enron executives have pleaded guilty to crimes and remain on bail under similar plea arrangements. Only one former executive, Ben Glisan Jr., Enron’s former treasurer, is in prison. Glisan pleaded guilty and is serving five years. He did not agree to cooperate with prosecutors.

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