By Kristen Hays
The Associated Press

HOUSTON - Andrew Fastow, chief architect of the off-the-books deals that brought down Enron, pleaded guilty along with his wife Wednesday in a deal that could take prosecutors to the top of the corporate ladder at the scandal-ridden company.

The former finance chief agreed to a 10-year prison sentence and will help prosecutors build a case against former chairman Kenneth Lay and former CEO Jeffrey Skilling.

The plea bargains represent the biggest breakthrough yet in the two-year investigation into a scandal that led to the energy giant's collapse and rocked Wall Street and Washington alike.

"I and other members of Enron senior management fraudulently manipulated Enron's publicly reported financial results," Fastow said in a statement filed with the plea agreement, adding that the purpose was to mislead investors and inflate the company's stock price and credit rating.

Fastow's wife, Lea, pleaded guilty to filing false tax forms related to $141,000 in gains in 1997-2000 from a wind farm deal. Lea Fastow, 42, was Enron's assistant treasurer.

Lea Fastow's deal calls for a five-month prison sentence and a year of supervised release, including five months of house arrest. U.S. District Judge David Hittner will decide later whether to accept the sentencing deal. Andrew Fastow, along with several other family members, attended the hearing.

The Fastows remain free on bond and are scheduled for sentencing in April. The Fastow plea arrangements had stalled last week after Hittner refused to guarantee Lea Fastow a five-month prison sentence, as agreed to with prosecutors.

Her lawyer said the couple insisted on the five-month sentence to ensure that their two young sons have at least one parent at home. Hittner demanded that he retain the right to alter Lea Fastow's term.

Andrew Fastow, 42, is the highest-ranking Enron executive charged in the 2001 collapse of the Houston-based energy company. Without a plea, he would have gone to trial on 98 counts of fraud, money laundering, insider trading and other charges.

He pleaded guilty to two counts of conspiracy to fraud. The agreement calls for the other counts against him to be dismissed if he fulfills his end of the bargain, which includes forfeiting at least $23.8 million of his assets and cooperating with authorities.

Prosecutors say Fastow masterminded a sea of partnerships and tangled financing deals that hid Enron debt and inflated company profits while funneling millions of dollars to him, his family and selected friends. The partnerships had names like LJM (the first initials of Fastow's wife and two sons) and Chewco (after the "Star Wars" character Chewbacca).

One guilty plea covered the LJM partnership, while the other involved transactions that Fastow used to pocket an estimated $45 million in fees.

Some experts believe the plea could break open the case against Lay and Skilling.

"Unquestionably, this is the breakthrough that the government has been pursuing," said Robert Mintz, a former federal prosecutor and an expert in white-collar crime.