Federal prosecutors, completing another stage of the investigation of Enron Corp.'s collapse, are preparing to seek securities fraud charges against Richard A. Causey, the Houston company's former chief accounting officer, within the next two weeks, people close to the case said.
The Justice Department's Enron task force is also zeroing in on the role of Lea Fastow, the wife of former Enron chief financial officer Andrew S. Fastow, sources said, and are likely to seek charges against her as well.
Lea Fastow was a banker who worked briefly at Enron and took part in several of the secretive accounting transactions that are at the heart of the government's investigation, according to government charges previously filed against her husband.
For example, the government alleges that Fastow's top lieutenant, Michael J. Kopper, gave Fastow, his wife and his two children more than $125,000 in kickbacks from illegal schemes between December 1997 and February 2000. Lea Fastow herself received six checks totaling $54,000 from Kopper in connection with another partnership called Chewco, according to court papers.
A spokesman for the Fastows declined to comment.
Charges also are anticipated against others on Fastow's finance team at Enron, the sources said.
The new round of indictments is expected around the time of a scheduled Feb. 10 pretrial hearing in the Fastow case. Fastow, 41, was indicted Oct. 31 on 78 counts of fraud, obstruction of justice and other charges. He pleaded not guilty and posted a $5 million bond.
A federal grand jury in Houston met throughout the past week, led by prosecutor Andrew Weissmann and other top members of the Justice task force, who were in Houston to wrap up this phase of the case, people close to the investigation said.
Justice prosecutors had previously announced plans to expand the Fastow indictment on Feb. 10, and are preparing to add alleged tax law violations, sources said. In this step in the Enron case, prosecutors have been planning to move beyond charges that Fastow and a small group of colleagues were secretly enriching themselves at Enron's expense to allege a broad conspiracy at the center of Enron.
People close to the investigation said prosecutors are preparing charges that Causey, Fastow and other executives designed a complex web of confidential financial transactions to manipulate Enron's stock price, rig its financial books and deceive investors from at least 1997 until the company's collapse last in 2001.
In last year's indictment against Fastow, prosecutors alleged that Causey -- to whom they referred only by title, not by name -- entered into a secret agreement with Fastow and others to guarantee that Fastow's outside partnerships would never lose money in their dealings with Enron.
At the outset of the investigation last year, prosecutors hoped to get Causey to testify against Enron's former top two executives, chief executive Jeffrey K. Skilling and founder and chairman Kenneth L. Lay. But Causey has told associates that he intends to fight any charges against him.
Causey's Washington, D.C., attorney, Reid Weingarten, declined to comment yesterday on his client's status.