HOUSTON (CNNMoney.com) - It was a heated showdown between former Enron financial chief Andrew Fastow and the defense attorney for former chief executive Jeffrey Skilling as attorney Daniel Petrocelli painted a picture of a man so consumed by greed that he was willing to bring down anyone, including his own wife, to protect himself.

Within the first few minutes of Petrocelli's cross-examination of Fastow -- considered to be one of most crucial figures in the Enron case -- there was high tension in the air as the two men sparred in court.

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Petrocelli asked the witness if he considered himself a hero -- a reference to Fastow's testimony Tuesday that in 2000, as the company engaged in shady dealings using Fastow's LJM partnerships, Fastow considered himself Enron's hero because he lifted its earnings, while lining his own pockets.

"In the culture of corruption within the company that rewarded financial performance over economic value, I believe I was being a hero," Fastow responded, but he added that he was ashamed of his illegal side deals in which he used his wife and children to receive kickbacks that he classified as "gifts" from friends.

"Were you consumed with insatiable greed?" Petrocelli asked. "I was extremely greedy, I lost my moral compass and I did many things I regret," Fastow responded.

But Petrocelli continued to hammer the witness over his crimes and his willingness to let his wife serve a year in jail even though he claims she was innocent. Fastow responded with carefully worded answers, saying that his misdeeds put his wife into the position in which she believed she was guilty of a crime.

"Your answers sound rehearsed," Petrocelli challenged Fastow on the stand. "With all due respect, your questions sound rehearsed," Fastow retorted, as laughter filled the courtroom.

"You think this is funny?" Petrocelli asked incredulously. "No, sir, it's dead serious," Fastow replied quietly.

For the defense, shredding Fastow's credibility is of the utmost importance. In Tuesday's testimony, Fastow implicated Skilling in a number of schemes to bolster the company's earnings and hide millions of dollars in losses. He testified that Skilling approved of Fastow's LJM partnerships -- special-purpose entities designed to move Enron's underperforming assets off its balance sheet -- and became so enamored of the financial vehicles that he wanted Fastow to continue to use LJM to "juice" Enron's earnings.

Now, as the defense questions the witness, it hopes to show that Fastow alone committed crimes within the company, without the knowledge of Lay or Skilling.

By the afternoon, Petrocelli was intent on portraying Fastow as a man on a mission to share the blame when it comes to Enron's downfall. And Fastow, while sticking to his story, was careful to portray Skilling as a participant along with other members of senior management in illegal activities.

"When the history books are written you know your name will be on the pages and you want Mr. Skilling's name on the page too," Petrocelli said to Fastow.

But Fastow said it was irrelevant whether Lay or Skilling's names were attached to his.

"What I want written on that page is that I had the character to recognize and admit what I'd done was wrong, to ask forgiveness of my family and community," he said.

"You think (Skilling's) guilty?" Petrocelli asked.

"I think we committed crimes together," he answered. "Even after being caught, it took me time to come to grips with that. What I did was reprehensible. It's not easy to look at yourself and recognize that about yourself and admit it. Some days it's still hard to do that. I've destroyed my life."

Legal observers expect the defense to shine the spotlight on Fastow's many misdeeds at his company, including his admission that he defrauded his own bosses to steal millions from the company.

Early in his cross-examination, Petrocelli sought to discredit his character as well, providing affidavits in which Fastow declined to testify in his wife's trial because it would implicate him in the crimes and showing numerous meetings with the Enron Task Force as evidence began to pile up against Fastow and former partners cut deals with the government.

"It was curtains for you," he told Fastow, adding that the only way Fastow could receive a reduced sentence for the 75 crimes he was charged with was to testify against Skilling.

"I was in a dire situation," Fastow admitted, adding that, while he didn't think helping the government was his only way out of a life sentence, "I decided it was in the best interest of my family to plead guilty."

In an attempt to tarnish Fastow's credibility, Petrocelli questioned Fastow on sham partnerships he set up even before the infamous LJM partnerships came into being. These partnerships in which Fastow received kickbacks -- money he characterized as "gifts" on his tax return -- were done without Lay or Skilling's knowledge and netted Fastow around $15 million, Petrocelli said.

When he asked how much Skilling made on the side deals, Fastow answered "zero".

He also highlighted the shell companies, known as Raptors, that Enron used to hide millions in losses. Fastow, who sold his share of the LJM2 partnership to partner Michael Kopper in 2001, continued to pocket under-the-table profits from the scheme – a side deal he kept secret from Enron's management.

Petrocelli introduced a spreadsheet taken from Fastow's computer which indicated that Kopper and Fastow expected to siphon off $120 million from their side deal related to LJM. Ultimately, Fastow netted between $35 million and $40 million from his participation in LJM while Fastow admitted that Skilling received no money from those illegal deals.

"Was it hard for you to say that?" Petrocelli asked Fastow. "Yes, it was," he replied.

But Fastow said members of the senior management, including Skilling, stole in other ways.

"When you artificially inflate earnings, improperly book losses so you can sell stock or make earnings targets so you can make high salaries and bonuses, that is stealing," Fastow said. "I stole in other ways and that way. All that I'm saying is that we stole."

In earlier testimony, Fastow said that Enron founder Lay was aware of Enron's deteriorating financial condition and expected a big third-quarter loss in 2001, but kept telling the public and employees the company was "fundamentally strong."

In a series of meetings after Skilling's sudden resignation in August 2001, Fastow said he told Lay that the company was facing a $1.2 billion shortfall and highlighted the worsening condition of Enron's international portfolios as well as $5 billion to $7 billion in imbedded losses that were finally "coming home to roost."

Fastow added that "the day of reckoning was forced upon us."

But even as Lay and senior management enlisted the help of Goldman Sachs to look for strategic alternatives, including putting Enron up for sale, Lay said in an interview with the media in August 2001 that "there are no accounting issues, no trading issues" at Enron.

Lay went on to say "if there is anything material and we're not reporting it, we'd be breaking the law. We don't break the law."

Fastow pleaded guilty to two counts of wire and securities fraud in 2004 and now faces 10 years in prison in return for his expected testimony against his former bosses.

Making a surprise appearance outside the courthouse on Wednesday was former HealthSouth chief executive Richard Scrushy, who was acquitted last June in another massive corporate fraud case.

In Houston on business with friends, Scrushy said he wanted to see Fastow's testimony, but offered no encouragement for the prosecution's star witness.

"My reaction is to him is that I wouldn't trust him as far as I could throw him," Scrushy said. "When I hear a man testify to all the horrible things he did, I wouldn't believe a word he says."

Combined, Lay and Skilling face more than three dozen fraud and conspiracy charges accusing them of lying to investors about the company's financial state while they enriched themselves by selling millions of dollars in stock.

Petrocelli will resume his cross examination Thursday.

--CNN producer Brian Vitagliano contributed to this report

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Tearful Fastow: We juiced Enron earnings