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Key govt. witness in Enron case testifies

March 7, 2006 at 1:28 PM   |   Comments

HOUSTON, March 7 (UPI) -- A top prosecution witness in the trial of Enron Corp.'s two former leaders said Tuesday he formed partnerships to hide massive losses from Wall Street.

Former Enron Chief Financial Officer Andrew Fastow testified that he created the off-the-books partnerships with the blessing of defendants Ken Lay and Jeff Skilling, charged with fraud and conspiracy in the 2001 collapse of Enron, to help the company "prop up" its numbers, the Houston Chronicle reported.

"We were using this to inflate our earnings," Fastow testified. Those partnerships are at the heart of Fastow's testimony for the government.

Lay, Enron's founder, faces seven counts, while Skilling faces 31 counts.

Fastow has pleaded guilty to two charges for a reduced sentence of 10 years behind bars and fines worth about $30 million, is expected to say that Lay and Skilling were aware that Fastow's partnerships were designed to scam Wall Street by hiding losses worth hundreds of millions of dollars.

Fastow also is expected to be aggressively cross-examined by defense lawyers later this week.

© 2006 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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