Federal prosecutors in Houston this week urged a judge to follow the arranged plea bargain against Lea Fastow, who is scheduled to be sentenced next week. She is the wife of former Enron Corp. CFO Andrew Fastow, and pleaded guilty earlier this year to filing a false tax report (see Daily GPI, Jan. 15).

She pleaded guilty for failing to report $47,800 in income on her 2000 personal taxes, which was part of more than $204,000 undeclared over four years. When she pleaded guilty, U.S. District Judge David Hittner indicated he was not necessarily going to follow the prosecutors’ deal that would give her a 10-month sentence, including five months in prison and five months under house arrest.

In a motion filed Tuesday, the Enron Task Force prosecutors contended that, “because the defendant is not accountable for the demise of Enron or shareholder losses, the government believes that enhanced punishment on that basis would clearly be in violation of American principles of individual justice.”

The 22-page memorandum argued that the RADR partnership, an Enron off-balance sheet transaction in which the Fastows illegally invested, was the sort of “self-dealing” that may occur at any company and not part of the larger scheme of earnings manipulations that took place at Enron. The RADR partnership has been part of two other guilty pleas in the Enron case, those of Lawrence Lawyer and Michael Kopper. Both Lawyer and Kopper are cooperating witnesses who will be sentenced in the future.

Hittner’s pre-sentencing report for Lea Fastow suggests that a 10-month to 16-month sentence is appropriate under complex federal guidelines. However, the report was prepared by the federal probation department, and Hittner could sentence her to a longer prison sentence if he wanted to.

Prosecutors said in their memo that the proposed sentence “is certainly not letting the defendant off ‘easy’ — indeed, it is in fact as harsh as that typically imposed on defendants with more aggravating sentencing factors.” The memo also noted that “Andrew Fastow’s cooperation is ongoing, and we anticipate that it will help bring other culpable persons to justice.”

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