HOUSTON -- A lawyer for former Enron Chief Executive Jeffrey Skilling launched a scathing attack on Wednesday on Enron's former finance wiz-turned-pivotal prosecution witness.

Defense attorney Daniel Petrocelli suggested that Andrew Fastow is a masterful liar whose insatiable greed landed his own wife in prison.

Fastow conceded that he had lost his moral compass and submitted to extreme greed when he was at Enron. He said he very much regrets that now.

Fastow had implicated Skilling in financial arrangements that masked Enron debt and boosted its bottom line to impress Wall Street.

Under direct examination, Fastow testified earlier on Wednesday that Enron founder and former CEO Kenneth Lay knew of serious financial trouble at the company in 2001.

That was days before Lay gave an interview claiming Enron was in its best shape ever.

Andrew Fastow told jurors about an August 2001 meeting in which Lay and other top executives heard about a so-called "hole in the earnings." Those were projections that Enron would fall far short of Wall Street expectations for the quarter.

Days later, in an interview with BusinessWeek, Lay said Enron had no accounting problems. He was quoted at the time as saying "The company is probably in the strongest and best shape that it has ever been in."

Asked by a federal prosecutor about the Lay interview, Fastow said he thinks most of the statements in the interview are false.

Skilling and Lay are on trial in Houston on federal fraud, conspiracy and other charges arising from Enron's 2001 collapse.

They have denied any wrongdoing.