Former Enron CEO Jeffrey Skilling Resentenced to 168 Months on Fraud and Conspiracy Charges
|U.S. Department of Justice June 21, 2013|
WASHINGTON—Former Enron Chief Executive Officer Jeffrey K. Skilling has been resentenced to 168 months in prison on conspiracy, securities fraud, and other charges related to the collapse of Enron Corporation. In addition to the prison sentence, Skilling, 59, was ordered to forfeit approximately $42 million to be applied toward restitution for the victims of the fraud at Enron.
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.
“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,” said Acting Assistant Attorney General Raman. “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.”
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 October 23, 2006. On January 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.
The investigation into Enron’s collapse was conducted by the Enron Task Force, a team of federal prosecutors supervised by the Justice Department’s Criminal Division and special agents from the FBI and IRS-Criminal Investigation. The task force received considerable assistance from the Securities and Exchange Commission. The resentencing hearing was handled by Patrick Stokes, Albert Stieglitz and Robert Heberle of the Criminal Division’s Fraud Section.