According to the affidavit, [former CFO] Fastow used his own children and wife as conduits for questionable payments that he himself was afraid to accept. Former friend and Enron subordinate [Michael] Kopper, who has already pleaded guilty to two counts of conspiracy in the Enron scandal, claimed the routine was just part of a Fastow special gifts program.

"To disguise the nature of the payments," reported [FBI special] agent [Omer J.] Meisel, "Fastow instructed Kopper to establish a 'gifting program,' whereby Kopper and his domestic partner [William Dodson] made annual gifts of $10,000 to individual Fastow family members." Even as he was constructing special partnerships that the government and the Securities and Exchange Commission claim broke numerous accounting rules, Fastow was mindful of IRS guidelines.

The $10,000 amount was chosen because gifts of up to that amount to an individual in one year are not required to be reported and are excluded from taxable income. In order to skim kickbacks from the various partnerships, the government claims, Fastow made his own family the mules for the illicit payments.

"Fastow instructed Kopper that he and his domestic partner should write checks not only to Fastow but also to Fastow's wife and two children," according to the affidavit. "Fastow told Kopper that, if ever asked, they could explain the checks from Kopper by saying he and Fastow were very close friends and the checks were gifts." On December 31, 1998, Kopper wrote two $10,000 checks to Fastow's children and one for $19,724 to his wife. The goodies over two years totaled $125,000.