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

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The plea by the former Enron finance chief called for a 10-year sentence and for him to help prosecutors who have targeted -- but not charged -- the executives who once occupied the most opulent offices on the company's top floor: former Chairman Kenneth Lay and former CEO Jeffrey Skilling.

"While CFO, I and other members of Enron senior management fraudulently manipulated Enron's publicly reported financial results," Fastow said in a written statement accompanying his plea deal, adding that the purpose was to mislead investors and others while inflating the company's stock price and credit rating.

A few hours later, Fastow's wife, Lea, pleaded guilty to filing false tax forms related to $141,000 in gains from 1997-2000 from a wind farm deal through a Fastow subordinate at Enron, Michael Kopper. Kopper previously worked a plea bargain to testify against his former boss.

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 he accepts the sentencing deal. Andrew Fastow, along with several other family members, attended the hearing.

The Fastows remain free on bond and are scheduled for formal sentencing in April.

The Fastow plea deals had stalled last week after a judge refused to guarantee Lea Fastow a five-month prison sentence, as agreed to with prosecutors.

Her attorney said the couple insisted on the five-month sentence to ensure that their two young sons have at least one parent at home. U.S. District Judge David 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 commit fraud. One stemmed from a partnership called LJM, named for the initials of his wife and sons, which he admitted using to generate improper earnings and inflate the value of assets for Enron while hiding poor-performing businesses.

The other conspiracy count involved transactions Fastow used to pocket an estimated $45 million in fees.

"I also engaged in schemes to enrich myself and others at the expense of Enron's shareholders and in violation of my duty of honest services to those shareholders," Fastow, who didn't speak to reporters afterward, said in his written statement.

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 in 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.

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His 42-year-old wife was not seen in the courtroom, though his parents and brother sat in the packed gallery. Fastow, clad in a gray suit, showed no emotion during the proceeding but managed to flash a smile afterward as he prepared to leave with his attorneys.

News2Houston legal expert and Houston defense attorney Brian Wice said the plea agreement gives the Department of Justice the opportunity to take the investigation to the next level.

"The amount of money that the Enron demise cost for so many people just strikes a chord that anything less than death in this case is a sweetheart deal," Wice said. "The irony is that Andrew Fastow will plead for more time than any other cooperating white-collar defendant in the last quarter century."

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. "There is nobody besides Fastow who can make this case for the government and that's why they have been pursuing him for so long and so aggressively."

Enron declared bankruptcy in December 2001 amid mass layoffs, leaving investors and retirees stuck with worthless stock. In the following months, WorldCom, Global Crossing, Adelphia Communications and others suffered a similar fate as investigators uncovered a raft of accounting failures across corporate America.

Some former Enron workers were not pleased that the Fastows were offered a deal because the workers lost so much.

"You have people each and every day that are still losing their homes, and it's not right. And he needs to know that he needs to pay for what he did," a former Enron employee told News2Houston.

"As a former employee, I lost a lot of money. I'm glad that things are starting to happen, but I'm not real happy there's a plea bargain involved," said Cindy Cook, another former Enron worker.

Whistleblower Speaks Out In Exclusive Interview

The woman credited with blowing the whistle on the shady Enron dealings told News2Houston in an exclusive interview that the plea agreements were a "win-win" for the prosecution.

"Not only do they have a guilty plea from Andy and his wife, with Andy agreeing to a 10-year prison term, but Andy's cooperating. He'll provide evidence against higher-ups, most noticeably CEO Jeff Skilling. But also, they avoid two time-consuming trials that would have happened this spring. And they can move on to even bigger fish," she said.

Watkins said the most common questions she's asked are: "Why aren't the two top guys, Skilling and Lay, in prison? Why are they not even indicted yet?"

She believes their time is soon.

"They'll be in the crosshairs of the prosecution and it is time to move forward, because remember, these fraudulent vehicles were hatched in 1999. That's four-and-a-half, five-year-old memory banks we're dealing with," Watkins said.

She hopes the Enron scandal changes the scope of future business.

"I like what the prosecutor said -- 'Morally-challenged executives need to go.' And I'm hopeful that will happen, but I still think we have a long way to go," Watkins said. "I think prison times need to be seen, but also, shareholders and board members have to be more diligent in their roles -- really looking at what management is doing in each and every public company."

Enron also became a source of ammunition for Democrats because of President Bush's close ties to Lay, a major campaign backer.

Lay and Skilling have steadfastly maintained their innocence. Lay's attorney, Mike Ramsey, said Wednesday that Lay has no worries if Fastow tells the truth. Ramsey attended Wednesday's hearing.

"It seems to me that nothing has occurred that affects my position or Ken Lay's position one way or the other so long as everyone continues to tell the truth," Ramsey said.

Bruce Hiler, Skilling's attorney, said his client had done nothing to merit charges.

"We understand the pressure to enter a plea rather than stand trial in the poisoned atmosphere that has been created around Enron, but that doesn't change the truth as to my client," Hiler said.

Former company insiders have said Fastow's aggressive and inventive approach to structuring deals appealed to Skilling. After CFO magazine showered Fastow with the "Excellence Award for Capital Structure" in 1999, Skilling told the publication: "Andy has the intelligence and the youthful exuberance to think in new ways."

Fastow said through his lawyers when he was initially charged in October 2002 that he never believed he was committing any crime.

"Enron hired Andy to arrange off-balance sheet financing. Enron's board of directors, its CEO, and its chairman, directed and praised his work. Accountants and lawyers reviewed and approved his work," his lead attorney, John Keker, told reporters at the time.

Fastow and Lay, among others, declined to testify before a U.S. House committee looking into the Enron collapse, but Skilling did answer questions in February 2002. He said he knew of no problems at Enron when he abruptly resigned in the summer of 2001, citing family reasons.

Enron was the nation's seventh-biggest company in 2001, and its bankruptcy was the largest such filing in U.S. history at the time. Its stock once traded at above $90, but sank to mere pennies amid the collapse.