US Considering Reduced Sentence for Enron's Skilling

Thursday, 04 Apr 2013 09:58 AM

 

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Jeffrey Skilling, the former Enron Corp. chief executive serving a 24-year prison term over the energy company's spectacular collapse, may get a chance to leave prison early.

The U.S. Department of Justice has notified victims of Enron's fraud and 2001 bankruptcy that prosecutors may enter an agreement with Skilling that could result in a resentencing.

Skilling, 59, has served about 6-1/4 years in prison following his May 2006 conviction by a Houston federal jury on 19 counts of securities fraud, conspiracy, insider trading and lying to auditors.

Forbes Columnist: ‘Who the Hell Cleared This?’

It is unclear how much Skilling's sentence could be reduced, and a Justice Department official said no agreement has been reached. CNBC, the television business channel, said prosecutors and Skilling's lawyers have been negotiating a shorter term.

Skilling has maintained his innocence, and according to court filings has been pursuing a new trial.

He is scheduled to leave prison around February 2028, assuming good behavior, according to federal prison records.

Daniel Petrocelli, a lawyer for Skilling, could not be reached immediately on Thursday for comment.

A new sentence would require the approval of U.S. District Judge Sim Lake in Houston, who had imposed the original sentence.

Once ranked seventh on the Fortune 500 list of large U.S. companies, Enron went bankrupt on Dec. 2, 2001. Its demise led to reforms including the federal Sarbanes-Oxley Act of 2002.

APRIL 17 DEADLINE

In a Wednesday notice, the Justice Department advised former Enron employees, stockholders and other victims that it is "considering entering into a sentencing agreement" with Skilling.

It gives former them until April 17 to voice objections.

In 2009, the 5th U.S. Circuit Court of Appeals upheld Skilling's conviction, but called his sentence too harsh.

The next year, the U.S. Supreme Court also upheld the conviction, but rejected one legal theory behind it. In 2011, the 5th Circuit reaffirmed the conviction.

Skilling had previously agreed to forfeit $45 million to be used as restitution for victims of Enron's fraud. That money has been held up because of the negotiations on a new sentence.

At the 2006 trial, the Houston jury also found Kenneth Lay, who was Enron's chief executive before and after Skilling's six-month term, guilty of fraud and conspiracy.

Lay died in July 2006, and his death led to his conviction being thrown out.

Among those who testified against Skilling and Lay was Andrew Fastow, who was Enron's chief financial officer and considered the mastermind behind the company's fraud.

Fastow was sentenced to six years in prison and released in December 2011.

The case is U.S. v. Skilling, U.S. District Court, Southern District of Texas, No. 04-cr-00025.

Forbes Columnist: ‘Who the Hell Cleared This?’

© 2014 Thomson/Reuters. All rights reserved.

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