Former
Enron CEO Resentenced to 168 Months for Fraud & Conspiracy Charges
Former
Enron CEO Jeffrey Skilling Resentenced to 168 Months for Fraud & Conspiracy
Charges
HOUSTON
– OCTOBER 23: Former Enron Chief Executive Jeffrey Skilling (L) and his
attorney Dan Petrocelli talk to the media outside the Bob Casey United States
Court House October 23, 2006, in Houston, Texas. Skilling was sentenced to 24
years and four months in prison for his role in deceiving investors about the
finanacial condition of his former company, Enron Corp., which ultimately
collapsed into bankruptcy in the fall of 2001. The debacle ruined the
retirement savings accounts of thousands of former empoyees. Skilling was given
home confinement with an ankle bracelet until prison officials order him in.
(Photo by Johnny Hanson/Getty Images)
by Avalon
Intellihub.com
July 17, 2013
Intellihub.com
July 17, 2013
Here’s one Conspiracy Theory
that became Conspiracy Fact – so don’t accept mainstream media’s attempt to
shut down rational thinking and research. Basically, mainstream media is the
propaganda arm of the fascist state we now live in, and their credibility has
long since self–destructed.
On June 21, 2013, Jeffery
Skilling, the Former CEO of Enron Corporation was sentenced to 168 Months for Securities
Fraud and Conspiracy Charges. Skilling was also ordered to forfeit
approximately $42 million to be applied toward restitution for the victims in
the case.
Acting
Assistant Attorney General Mythili Raman of the Criminal Division made the
announcement after Skilling was resentenced before U.S. District Judge Sim Lake
at the U.S. District Court in Houston. According to a Department of
Justice Press Release, Acting Assistant Attorney General Raman said:
“The sentence handed
down today ends years of litigation, imposes significant punishment upon the
defendant and precludes him from ever challenging his conviction or sentence,” “With today’s court action, victims of Skilling’s crimes will finally receive more than $40 million that he owes them. We appreciate the hard work and dedication of all the prosecutors and agents who have handled this important case from the initial investigation to today’s successful conclusion.”
The DOJ Press Release goes on further
to describe the Enron case and aftermath, quoting:
A federal jury found
Skilling guilty in Houston on May 25, 2006, of one count of conspiracy, 12
counts of securities fraud, one count of insider trading, and five counts of
making false statements to auditors. Judge Lake initially sentenced
Skilling to serve 292 months of imprisonment on Oct. 23, 2006. On Jan. 6,
2009, the United States Court of Appeals for the Fifth Circuit affirmed
Skilling’s convictions but vacated his sentence and remanded for a new
sentencing hearing. The court of appeals concluded that the district
court erred by increasing Skilling’s sentence for having substantially
jeopardized the safety and soundness of a financial institution – that is,
Enron’s pension plan. As a result, the court of appeals effectively
reduced Skilling’s guidelines range of imprisonment by approximately nine
years. In May 2013, the government and Skilling entered into an agreement to recommend jointly to the district court a sentence between 168 months and 210 months of imprisonment, a limited reduction in Skilling’s guidelines range of imprisonment in exchange for Skilling agreeing, among other things, not to contest the original forfeiture and restitution order and to waive all appeals and other litigation. As court documents make clear, the government entered into this agreement, in part, to bring finality to Skilling’s convictions and thereby allow the government to promptly seek the distribution of approximately $42 million to victims of Skilling’s crimes.
Skilling’s convictions stemmed from a scheme to deceive the investing public, the U.S. Securities and Exchange Commission, and others about the true performance of Enron’s businesses. The scheme was designed to make it appear that Enron was growing at a healthy and predictable rate, consistent with analysts’ published expectations, that Enron did not have significant write-offs or debt and was worthy of an investment-grade credit rating, that Enron was comprised of a number of successful business units, and that the company had an appropriate cash flow. This scheme had the effect of artificially inflating Enron’s stock price, which increased from approximately $30 per share in early 1998 to over $80 per share in January 2001, and artificially stemming the decline of the stock during the first three quarters of 2001.
The fraud scheme eventually unraveled and Enron filed for bankruptcy in December 2001, making its stock virtually worthless.
Many details emerged when the
Enron Scandal first broke. There are numerous articles available to get a
complete picture, one of which is the Wikipedia article Enron
Timeline of Downfall which goes into great detail. One of the major
accounting firms, Arthur Andersen
went bankrupt as a result of it’s involvement with Enron – a company that was
founded in 1913 in Chicago.
Many people were devastated by the
loss of pensions from the collapse of Enron on the NYSE Symbol: ENE. From the August 23, 2000 share price
of $90 to January 11, 2002 price of $0.12, shareholders lost nearly $11
billion.[3] Quoting from the Enron Wikipedia article on Employees and shareholders:
Enron’s shareholders lost $74
billion in the four years before the company’s bankruptcy ($40 to $45 billion
was attributed to fraud).[151]
As Enron had nearly $67 billion that it owed creditors, employees and
shareholders received limited, if any, assistance aside from severance from
Enron.[152] To pay its creditors, Enron held auctions to sell assets
including art, photographs, logo signs, and its pipelines.[153][154][155]
In May 2004, more than 20,000 of
Enron’s former employees won a suit of $85 million for compensation of $2
billion that was lost from their pensions. From the settlement, the employees
each received about $3,100.[156]
The next year, investors received another settlement from several banks of $4.2
billion.[151] In September 2008, a $7.2-billion settlement from a
$40-billion lawsuit, was reached on behalf of the shareholders. The settlement
was distributed among the main plaintiff, University of California (UC), and
1.5 million individuals and groups. UC’s law firm Coughlin Stoia Geller Rudman
and Robbins, received $688 million in fees, the highest in a U.S. securities
fraud case.[157] At the distribution, UC announced in a press
release “We are extremely pleased to be returning these funds to the members of
the class. Getting here has required a long, challenging effort, but the
results for Enron investors are unprecedented.”[158]
Further, the details
of the Trials that resulted are detailed in the Enron Wikipedia article,
quoting;
Fastow and his wife, Lea, both
pleaded guilty to charges against them. Fastow was initially charged with 98
counts of fraud, money laundering, insider trading, and conspiracy,
among other crimes.[125] Fastow pleaded guilty to two charges of
conspiracy and was sentenced to ten years with no parole in a plea bargain to
testify against Lay, Skilling, and Causey.[126]
Lea was indicted on six felony counts, but prosecutors later dismissed them in
favor of a single misdemeanor tax charge. Lea was sentenced to one year for
helping her husband hide income from the government.[127]
Lay and Skilling went on trial for
their part in the Enron scandal in January 2006. The 53-count, 65-page
indictment covers a broad range of financial crimes, including bank fraud,
making false statements to banks and auditors, securities fraud, wire fraud,
money laundering, conspiracy, and insider trading. United States District Judge
Sim Lake had previously denied motions by the defendants to have separate trials
and to relocate the case out of Houston, where the defendants argued the
negative publicity concerning Enron’s demise would make it impossible to get a
fair trial. On May 25, 2006, the jury in the Lay and Skilling trial returned
its verdicts. Skilling was convicted of 19 of 28 counts of securities fraud and
wire fraud and acquitted on the remaining nine, including charges of insider trading. He was sentenced to 24 years and 4 months in
prison.[128]
Lay pleaded not guilty to the
eleven criminal charges, and claimed that he was misled by those around him. He
attributed the main cause for the company’s demise to Fastow.[129]
Lay was convicted of all six counts of securities and wire fraud for which he
had been tried, and he was subject to a maximum total sentence of 45 years in
prison.[130] However, before sentencing was scheduled, Lay died on
July 5, 2006. At the time of his death, the SEC had been seeking more than $90
million from Lay in addition to civil fines. The case of Lay’s wife, Linda, is
a difficult one. She sold roughly 500,000 shares of Enron ten minutes to thirty
minutes before the information that Enron was collapsing went public on
November 28, 2001.[131] Linda was never charged with any
of the events related to Enron.[132]
Although Michael
Kopper worked at Enron for more than seven years, Lay did not know of Kopper
even after the company’s bankruptcy. Kopper was able to keep his name anonymous
in the entire affair.[133] Kopper was the first Enron executive to
plead guilty.[134] Chief Accounting Officer Rick Causey was indicted
with six felony charges for disguising Enron’s financial condition during his
tenure.[135] After pleading not guilty, he later switched to guilty
and was sentenced to seven years in prison.[136]
All told, sixteen people pleaded
guilty for crimes committed at the company, and five others, including four
former Merrill Lynch employees, were found guilty. Eight former Enron
executives testified—the main witness being Fastow—against Lay and Skilling,
his former bosses.[120] Another was Kenneth Rice, the former chief
of Enron Corp.’s high-speed Internet unit, who cooperated and whose testimony
helped convict Skilling and Lay. In June 2007, he received a 27-month sentence.[137]
Michael W. Krautz, a
former Enron accountant, was among the accused who was acquitted[138]
of charges related to the scandal. Represented by Barry Pollack,[139]
Krautz was acquitted of federal criminal fraud charges after a month-long jury
trial.
In conclusion, it’s still not clear where all
of the money went – as money is never destroyed, its only transferred from one
entity to another. Along with some recent articles by TIME titled, Behind
the Enron Scandal, and Forbes, An
End To The Enron Saga (Updated), it’s noteworthy that the movie Enron: The Smartest
Guys In The Room was made about the Enron Scandal.
Enron:
The Smartest Guys in the Room – Archive.org
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