Two major players in the accounting scandals at energy giant Enron Corp. and telecom powerhouse WorldCom Corp. moved a step closer to punishment for their crimes.

Yesterday, former Enron chief financial officer Andrew Fastow was sentenced to serve six years in prison, plus an additional two years of full-time community service upon his release, for his role in the accounting fraud that lead to the company’s collapse. He has already surrendered nearly $30 million in cash and property.

Fastow, 44, pleaded guilty to two conspiracy charges in January 2004, agreeing to a 10-year maximum prison sentence in exchange for testifying against the company’s founder, the now-deceased Kenneth Lay, and its former chief executive, Jeffrey Skilling. The duo was convicted of conspiracy and fraud charges in May.

Federal Judge Kenneth Hoyt had discretion to give Fastow, who cooperated extensively with federal officials during their investigation, a lesser sentence.Fastow was originally indicted on 98 counts, including fraud, insider trading and money laundering.

Separately, former WorldCom chief executive Bernard Ebbers was scheduled to start a 25-year federal prison sentence on Tuesday for his conviction on fraud and conspiracy charges in orchestrating the company’s $11 billion accounting fraud. Ebbers, who is 65 and has a heart ailment, will serve his sentence at the Oakdale Correctional Complex in Louisiana, a drive of several hours from his family members.

The 2nd U.S. Circuit Court of Appeals upheld Ebbers' conviction and sentence last month, but his lawyer has said they will continue to pursue an appeal.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access