Former Enron Chief Executive Officer Jeffrey Skilling was sentenced to 24 years, four months in prison for his role in the collapse of the one-time energy giant, which has come to symbolize the era of corporate fraud cases at the beginning of the millennium. Skilling was ordered to home confinement, wearing an ankle monitor, according to the Associated Press.
U.S. District Judge Sim Lake told the U.S. Bureau of Prisons to recommend when Skilling should report to prison, but did not recommend a specific date, according to the wire service. The judge also suggested Skilling, 52, be sent to the federal facility in Butler, N.C., said the AP.
At the beginning of the hearing, Judge Lake said under guidelines Skilling faced between 292 and 365 months in prison, but noted that he could depart from those sentence terms, according to the Houston Chronicle. “The evidence establishes that the defendant repeatedly lied to investors,” Lake said before imposing the sentence, according to Bloomberg.
Skilling was convicted in May on 19 counts of fraud, conspiracy and insider trading after a four-month trial. The length of the sentence was called “unsurprising” by Roma Theus of the Defense Research Institute. Theus told CFO.com that “the enormity of the alleged fraud and economic loss” suffered by Enron investors and employees,” made the sentencing predictable. DRI is a professional organization of attorneys who defend the business community.
“There is no question that courts are establishing benchmarks for alleged fraud of this scale,” added Theus, referring to scandals at both Enron and Worldcom. Such cases have “set the outer limits for punishment,” noted the attorney. Bernie Ebbers, the former chief of Worldcom was sentenced to 25 years in prison in September.
Skilling is sure to appeal the conviction, since there is no downside to the process, says Theus. “He cannot be any worse off.” Skilling’s lawyers, who will probably try continue the bail bond pending appeal so the former executive remains free during the appeals process, must first make their case to the U.S. Court of Appeals, 5th Circuit, which covers Texas, and can eventually take the case to the Supreme Court if lower court reviews fail.
Skilling was escorted to court on Monday by mounted police for the widely anticipated sentencing, which included statements from seven victims, according to the Chronicle. “I’m asking you today, judge, I’m begging you today, to give Jeff Skilling the maximum,” said Diana Peters, adding she worked at Enron for 11 years as a computer technician, reported Bloomberg.
Skilling also had a chance to speak, claiming that he did not commit any crimes. “In terms of remorse your honor, I can’t imagine more remorse,” he told Lake before he was sentenced, according to Bloomberg. “That being said, your honor, I am innocent of these charges. I am innocent of every one of these charges.”
The Chronicle also pointed out that the restitution from Skilling to the government will include $45 million that were frozen, including funds from the sale of his home and just about all of his assets. Skilling spent about $40 million on his defense, according to the Wall Street Journal. The paper said that Kenneth Lay, the former Enron chairman and co-defendent who died of a heart attack in July, is believed to have spent millions more.
Skilling was convicted along with Lay. But last week, Lake vacated Lay’s conviction because the one-time executive died before he was able to complete his appeal. “The Enron fraud is as large and as serious as any other fraud in the nation’s history,” said prosecutor Sean Berkowitz, according to the Chronicle. “This was not a one-time event where someone made a judgment in error.”