New Sentence for Enron Chief, 7 Years After Trial
(CN) - A federal judge ordered a 14-year sentence on Thursday for former Enron CEO Jeffrey Skilling, whose appeal led the Supreme Court to redefine honest services fraud.
Skilling had resigned from Enron on Aug. 14, 2001, four months before the energy giant crashed into bankruptcy.
An investigation revealed that Skilling, Kenneth Lay and other Enron executives had manipulated Enron's earnings to satisfy Wall Street expectations, and then covered up the scheme by cooking the books.
In 2006, a jury in Houston convicted Skilling of 19 criminal counts, including conspiracy, securities fraud, false statements and insider trading.
Though the 5th Circuit upheld the convictions in 2009, it took issue with the 24-year sentence that Skilling faced.
The New Orleans-based appellate concluded that Skilling's sentence improperly accounted for the fact that he substantially jeopardized Enron's pension plan.
This conclusion effectively reduced Skilling's guidelines range of imprisonment by approximately nine years.
Meanwhile, Skilling took appealed his convictions to the next and final authority.
The Supreme Court vacated part of his conviction in 2010, taking issue with the so-called "honest services law," which gives prosecutors authority to try cases against executives who deprive companies of their honest services.
That statute is limited to bribery and kickbacks, rather than conduct such as self-dealing, according to the ruling.
Skilling's crimes thus did not qualify, but it would not shave more time off his sentence.
On remand, the 5th Circuit ruled that the jury's consideration of honest-services fraud did not affect the other convictions.
Skilling finally faced resentencing from the 2009 decision Friday, and U.S. District Judge Sim Lake sentenced the 59-year-old to 14 years.
He must also forfeit $42 million toward restitution for the victims of the Enron fraud.
The 168-month sentence represents the low end of the sentencing range jointly recommended by the government and Skilling.
This accounted for Skilling agreement not to contest the original forfeiture and restitution order, and to waive all appeals and other litigation, the Justice Department explained.
The recommended range went as high as 210 months.