Fastow, 40, is the highest-ranking Enron official to be charged in the accounting scandal that prompted the sudden collapse of the onetime energy giant.
Enron, which ranked seventh on the Fortune 500 list two years ago, filed for bankruptcy in late 2001 after revealing massive accounting discrepancies, including a $618 million loss, and cutting $1.2 billion of shareholder equity.
The 78-count indictment included fraud, money laundering and conspiracy charges, which had been brought against the Fastow in a 35-page federal affidavit earlier this month. The indictment carried one additional charge alleging Fastow obstructed justice during the federal investigation into Enron’s complicated accounting methods.
Maximum penalties for the each of the multiple charges against Fastow include 20 years for money laundering, 10 years for wire fraud and five years for conspiracy.
If convicted, Fastow could face a jail sentence of hundreds of years and millions of dollars in fines.
Prosecutors also allege that Fastow profited personally from the deals, garnering an estimated $30 million through the unlawful partnerships he and his partner, Michael Kopper, created.
Kopper became the first former Enron executive to plea guilty to federal charges of money laundering and wire fraud on Aug. 21. Prosecutors say Kopper provided most of the information about the illegal partnerships they used to build their case against Fastow. Kopper’s sentencing is scheduled for April 4, where he faces up to 15 years in prison.
Deputy Attorney General Larry Thompson, head of the Bush administration’s Corporate Fraud Task Force, said the indictment does not conclude the government’s investigation into Fastow.
Thompson vowed that federal officials “will use every appropriate measure to recover the ill-gotten gains of these corporate schemers.”
Prosecutors are expected to pressure Fastow to divulge potentially incriminating information about his former colleagues, including former Enron Chairman Kenneth Lay and former Chief Executive Jeffrey Skilling. Skilling and Lay, who were both subpoenaed by Congress during the 2001 Enron hearings, have not been formally charged in connection with the Enron case.
Fastow, who surrendered to FBI agents in Houston on Oct. 2, when the original criminal complaint was filed, remains free on $5 million bond. His lawyer John Keker has maintained Fastow “never believed he was committing any crime.”
Fastow will reappear in a Houston courtroom to formally enter a plea at an arraignment hearing on Nov. 6.