By unlawfully maintaining personal stakes in these ostensibly independent ghost-entities, he was able to defraud Enron out of tens of millions of dollars.
He grew up in New Providence, New Jersey, the son of middle class Jewish[4][5] parents, Carl and Joan Fastow, who worked in retail and merchandising.
While presented to the outside world as being independent entities, the funds Fastow created were to take write-downs off Enron's books and guaranteed not to lose money.
While defrauding Enron in this way, Fastow was also neglecting basic financial practices such as reporting the "cash on hand" and total liabilities.
In August, Skilling, who had been promoted to CEO of the entire company in February 2001, abruptly resigned after only six months, citing personal reasons.
This culminated in a series of stories that appeared in the Journal in mid-October detailing the "vexing conflict-of-interest questions" about the partnerships, as well as the huge windfall he had reaped from them.
The combined weight of these revelations led the board to accept Lay's recommendation to remove Fastow as CFO on October 25, replacing him with industrial markets chief and former treasurer Jeff McMahon.
As a result, McMahon and a "financial SWAT team" put together in the wake of Fastow's ouster discovered Enron had almost no liquidity.
Dynegy tore up the merger agreement on November 28 in part due to the liquidity problems revealed after Fastow's ouster, and Enron declared bankruptcy three days later.
On October 31, 2002, Fastow was indicted by a federal grand jury in Houston, Texas, on 78 counts, including fraud, money laundering, and conspiracy.
U.S. District Judge Ken Hoyt believed Fastow deserved leniency for his cooperation with the prosecution in several civil and criminal trials involving former Enron employees.
Soon after his release on December 16, 2011,[17] he began working as a document review clerk for law firm Smyser Kaplan Veselka LLP in Houston.
In one such speech, Fastow recounts his crimes at Enron and reflects on his guilt:“I found every way I could to technically comply with the [accounting] rules...
[22] In March 2022 the National Investor Relations Institute New York Chapter hosted Fastow as guest speaker for a discussion on business ethics, and the ambiguity and complexity of laws and regulations.
[24] KeenCorp is a Netherlands-based company that offers analytics and artificial intelligence products that monitor "day-to-day workflow: E-mails, Microsoft Teams chats, Google Suite, and Slack" in order to analyze employee sentiment and engagement.
Also in 2003, Bethany McLean and Peter Elkind wrote the book The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron ISBN 1-59184-008-2.