Watch CBSN Live

New Slew Of Enron Indictments

Federal prosecutors put eight more former Enron executives in handcuffs Thursday and slapped 31 more counts on their indictment of former chief financial officer Andrew Fastow.

The new charges against Fastow included four counts of insider trading, based on Fastow's personal gains of more than $18 million from the illegal use of inside information," said Deputy Attorney General Larry Thompson.

But the greatest blow to Fastow may be the indictment of his wife, Lea, Enron's former assistant treasurer, reports CBS News Correspondent Anthony Mason.

Lea Fastow, 41, was brought in on charges of conspiracy to commit wire fraud and money laundering, as well as filing false tax returns.

She and six ex-Enron officials surrendered to federal authorities in Houston just after daybreak, then were taken in handcuffs to court. A seventh executive was to turn himself in later. Andrew Fastow and two others named Thursday had been charged in earlier indictments.

"Lea Fastow is innocent," her lawyer, Nanci Clarence, told reporters. "Mrs. Fastow has done nothing wrong, and she had nothing to do with the fall of Enron. Mrs. Fastow is being charged in order to put pressure on her husband of 18 years, Andy Fastow.

"These tactics are unfair and unjust."

The indictments bring to 19 the number of individuals charged in the Enron case, with six of those already entering guilty pleas.

"Today's indictments are a significant milestone in our determined efforts to expose and punish the vast array of criminal conduct related to the collapse of Enron Corporation," said Deputy Attorney General Larry Thompson, who heads the Justice Department's Corporate Fraud Task Force.

Thompson said the probe was far from over.

Federal prosecutors, who filed a 78-count indictment against Andrew Fastow in October, filed a superseding indictment Thursday that includes charges of fraud, insider trading and falsification of accounting records. The superseding indictment also names two new defendants, former Enron treasurer Ben Glisan Jr. and former finance executive Dan Boyle.

Boyle's attorney, Bill Rosch, said prosecuting his client "is like prosecuting the piano player in a whorehouse."

Another indictment added charges against former Enron Broadband Services executives Kevin Howard and Michael Krautz, as well as five new defendants: the unit's chairman and co-chief executive Kenneth Rice; former president and co-chief executive Joseph Hirko; former chief operating officer Kevin Hannon; and former senior vice presidents Scott Yeager and Rex Shelby. They are charged with fraud, money laundering, insider trading, keeping false books and records, submitting false tax forms, obstruction of justice and conspiracy.

The indictments allege the Enron Broadband executives sold large amounts of Enron stock while they knew their unit was failing, bringing themselves some $186 million in profits. The government is seeking forfeiture of more than $100 million of those profits.

Prosecutors contend that although Enron claimed the broadband unit earned millions in profits, it never generated any revenue. Enron abandoned the unit shortly before filing for bankruptcy in December 2001.

In court Thursday, Rice, Hirko, Hannon and Yeager entered innocent pleas before U.S. Magistrate Marcia Crone. Bond for Rice and Hirko was set at $3 million each. Bond for Hannon and Yeager was set at $1 million. All were in the process of posting bond.

Lea Fastow, Boyle and Glisan were to appear before Crone later in the day. Shelby had a family emergency and was being allowed to surrender later.

Andrew Fastow is free on $5 million bond. A status hearing in his case is scheduled for May 19. Howard and Krautz have been freed on $500,000 bond each.

Former Enron CEO Jeffrey Skilling and former Chairman Ken Lay have not been charged with any crimes, and say they did nothing improper at Enron.

View CBS News In
CBS News App Open
Chrome Safari Continue