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January 14, 2004
Couple Set to Plead Guilty in Enron Case By KURT EICHENWALD The former chief financial officer of Enron and his wife have agreed to plead guilty to crimes after all. The executive, Andrew S. Fastow, and his wife, Lea, are
scheduled to enter their guilty pleas today in separate proceedings in Federal
District Court in Houston, just days after their negotiations with the
government collapsed, people involved in the case said yesterday.
The terms of the two deals are virtually identical to the
tentative agreements reached last week. Under those, Mr. Fastow would be
sentenced to at least 10 years in prison and be required to cooperate with the
continuing investigation. Mrs. Fastow would serve at least five months in
prison.
The two had been expected to enter their guilty pleas on
Thursday, when the plans were upended after Judge David Hittner, who was hearing
Mrs. Fastow's case, made a series of comments suggesting he was deeply
uncomfortable with the length of her prison term. A judge does not have to
accept the terms of a plea deal, and Judge Hittner could sentence Mrs. Fastow to
as much as 16 months, at which point she would have the right to withdraw her
plea.
With Mrs. Fastow merely an asterisk in the Enron case -
the government's main interest is the cooperation of her husband - Judge
Hittner's comments sent defense lawyers back to the negotiating table, seeking
terms that could result in the dismissal of the case against her. They argued
that without such a deal, the cooperation of Mr. Fastow might slip away. But the
government refused to agree to the terms Mrs. Fastow was seeking, causing the
negotiations to collapse on Friday.
The discussions resumed this week, with the Fastows
ultimately agreeing to take virtually the original deals, with only small
changes in Mrs. Fastow's deal, people involved in the case said. But Mrs. Fastow
will still be required to plead guilty to a single felony count, they said; at
one point last week, prosecutors raised the possibility of allowing her to plead
to a misdemeanor, but that option never turned into a formal offer.
The plea deals clear the way for Mr. Fastow, long
considered a central figure in the criminal investigation into the Enron
collapse, to provide evidence and testimony against other executives in the
case.
As part of his effort to obtain a plea deal, Mr. Fastow
has already provided evidence against other former Enron executives. Some of the
information he offered was used in writing a criminal complaint that was set to
be filed last week against Enron's former chief accounting officer, Richard A.
Causey, people involved in the case said. But the collapse of the Fastow
negotiations led to a delay in those plans. There was no indication yesterday of
when, or if, the government planned to revive that complaint. In his plea
negotiations, Mr. Fastow also offered evidence about the involvement of Jeffrey
K. Skilling, Enron's former chief executive, in certain accounting issues,
people involved in the case said. But it is not clear whether that information
would suggest or sustain criminal charges.
Mr. Fastow also plays significant roles in criminal cases
involving other defendants who have already been charged. If Mr. Fastow pleads
as expected, those other cases are sure to feature him as a primary government
witness.
Mr. Fastow - who was implicated in wrongdoing by a onetime
friend and subordinate, Michael J. Kopper - has long been viewed as a means for
prosecutors into the final stages of the Enron investigation. Given the strength
of the case against Mr. Fastow, prosecutors had more leverage over him than over
any other senior Enron executive. In the end, he was viewed as the man most
likely to succumb to pressure to reveal everything he saw in the executive
suites.
The criminal charges against Mr. Fastow - which include
fraud, money laundering and conspiracy - depict him as a facilitator who
manipulated accounting and financial techniques to allow Enron to hide its many
business failings, even while enriching himself at the company's expense. His
wife was charged with conspiracy and tax violations for aiding him in disguising
secret income he received as payment from a loan to Mr. Kopper.
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By MELODY McDONALD
Star-Telegram Staff Writer A 59-year-old woman was sentenced to nine years in prison Tuesday for selling bogus viatical contracts to Tarrant County residents. FORT WORTH - A 59-year-old woman who scammed several elderly Tarrant County residents out of thousands of dollars after selling them bogus viatical contracts was sentenced Tuesday to nine years in prison. Despite her promise to sell all her "worldly goods" to help pay back the victims, visiting state District Judge R.E. Thornton sent Sharon Hutchison to the penitentiary. Hutchison has been in the county jail since she was convicted last month of 10 counts of selling securities without a license. Hutchison is the second person to be prosecuted in Tarrant County in connection with an elaborate viatical scam that authorities say stretched from Fort Worth to Florida and bamboozled as many as 70 Tarrant County residents out of more than $2 million. During the trial, prosecutors said Hutchison - a "cash-flow specialist" at Christian Ministries International - used religion to help sell fraudulent contracts to at least 12 people, most of them elderly, for about $330,000. Defense attorney Paul Leech argued that Hutchison was just a secretary at the company and was unaware of the scam or that what she was doing was wrong. Sharon Hutchison was a simple secretary with no prior
record and who was working two jobs. She is an enthusiastic Christian and
a saleswoman and she was told by her bosses that everything she was doing
was legal although a brother - in - law questioned that. She did not
and when the company collapsed and the bosses escaped to Mexico, Sharon was told
to sell the furniture in the office and take the money as her pay check which
she did. Denial is an amazing thing but so is naivet�. (Her
bosses were Christian Ministers) Several years later Texas indicted
the secretary. That money was later called a pay-off by the
Prosecutor and was considered proof of her taking part in the scam.
One other administrator bought a plea bargain and was given a suspended
sentence.
They got the secretary for 9 years.
They got Fastow's wife for five months and Fastow of Enron
for ten years.
On January 1, 2004 after almost two years in prison with
no possibility of parole, Sharon June Hutchison had a heart attack and was
diagnosed with diabetes and out of control high blood pressure. A
few days later she had another heart attack and is now in the hospital after
open heart surgery. Well guarded I might add.
Further update, recently Texas has been contemplating
paroling a serial killer as noted on Television tonight but they are
doing well cracking down on Grandmothers.
I have known Sharon June Hutchison from many years.
This may seem strange to some of you but in our community
we are "intimately acquainted" with all sides of the law.
There are those I could imagine doing outlaw actions but it is unusual for
someone as "straight arrow" as Sharon to find themselves on that side of the
law. Like having a gay son or sister, eventually the prejudice towards the
"unbelievable" breaks down when the police knock on YOUR door. Like the
wealthy who can't tolerate poverty, these folks are extremely vulnerable and
cannot conceive of a gay child, an out wedlock pregnancy or the
police. The first two are accidents but the third is a kind of
betrayal because, like Iraq, everyone wants to believe that the authorities are
correct and wouldn't just pick on the most convenient person. That was why
I was so frightened for Sharon although she seemed to transfer her salesmanship
to proselytizing for Jesus in prison and keeping up her spirit. But nine
years is a long time for a woman with elder issues.
There are those who will survive. But putting
a sixty year old woman in prison for nine years is more than likely a death
sentence. I have known many inmates who are wonderful people now doing
fantastically well in the Arts. Especially painters.
At one point 30% of the prison population of Minnesota
was American Indian. America loves to put people in prison and train
them to be criminals.
But we fool them. We have done a lot to bring
our people back from such oppression and persecution.
However, we represent less that 1/2% of the population and we have more
crime committed against us from outside the Indian community than any
group in America according to the Attorney General of the US. I
would add that not much of that crime is punished. But we also have
many people who are members of the police and I have many police in my family as
well. There are reasons for such things. Somehow
Sharon slipped through the net. Knowing her I feel sure that she
would not have done that knowingly and deliberately. She is
just too naive and straight. If you are going to be straight
you had better be wealthy enough to hire good lawyers. Sharon had a
public defender. She obviously made a lot of money from her
sins.
I would say, if any of you folks are outside the US and
thinking of immigrating just remember Sharon and the Fastows.
"The purpose of lawyers is to protect the wealthy from the
folly of their lives."
REH
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