Skilling to Be Resentenced
The 5th Circuit provided the slimmest of victories to former Enron Corp. CEO Jeff Skilling yesterday, vacating his 24-year prison term and remanding the case for resentencing, but affirming the conviction on appeal. [Source: Associated Press, via Law.com, Bloomberg]. Skilling, who was convicted in May 2006 on 19 counts of fraud and conspiracy for his role in the collapse of Houston-based Enron, based his appeal on the "honest services" theory under which executives who carry out the company's mission and do not personally profit from their actions are not guilty of criminal conduct. The 5th Circuit has overturned several other Enron-related convictions on these grounds, although those cases involved lower-level executives than Skilling, who headed the company.
So why did Skilling win on the sentencing issue? According to the WSJ Law Blog, the 5th Circuit found that district court Judge Sim Lake committed a somewhat technical error in applying sentencing enhancements. Lake gave Skilling a “four-level enhancement” to his sentence “for substantially jeopardizing the safety and soundness of a ‘financial institution.’” However, the 5th Circuit found that because Enron's employee savings or stock ownership plans were not financial institutions, the enhancement should not apply.
Sentencing guru professor Doug Berman declines to make any predictions about Skilling's sentence term on remand. But he cites other sources, such as Kirby Behre, a partner at Paul Hastings, who commented that under the 5th Circuit's analysis, at best, Skilling is due a minor reduction from his now vacated 292 month term. According to Behre, the court isn't likely to even halve Skilling's sentence to 12 years.
According to Berman, dropping Skilling's offense back a level would put him in the 15 and 2/3 to 19-year category. But Berman also notes that the Supreme Court made sentencing guidelines voluntary in January 2005, leaving the judge discretion to give the same sentence.
Posted by Carolyn Elefant on January 7, 2009 at 03:53 PM | Permalink
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