[h=3]By TOM FOWLER[/h]HOUSTON—A federal judge reduced former Enron Corp. Chief Executive Jeffrey Skilling's prison sentence to 14 years on Friday, meaning the one-time head of the energy-trading giant could be free by the end of the decade.
Mr. Skilling, 59 years old, was convicted in 2006 of lying to investors about the financial health of the Houston energy company and sentenced to 24 years in prison. The reduced sentence came at the bottom of the range recommended by prosecutors after a deal struck with Mr. Skilling earlier this year.
The Enron scandal led to the company's bankruptcy, dozens of indictments, and the collapse of accounting firm Arthur Andersen. It also upended much of the U.S. energy-trading business for years and prompted tighter corporate governance and reporting requirements, including the Sarbanes-Oxley Act.
Bloomberg NewsEnron's former chief executive, Jeffrey Skilling, arrives at the Bob Casey Federal Courthouse in Houston on Friday.
In 2009, the Fifth Circuit Court of Appeals upheld Mr. Skilling's conviction but found that trial Judge Sim Lake had erred in determining part of his sentence calculation and ordered that Mr. Skilling be resentenced.
Mr. Skilling has consistently maintained his innocence and was working toward winning a new trial. Earlier this year, he reached an agreement with prosecutors, however, to drop his appeals in exchange for a recommendation to the judge for a shorter sentence of between 188 months and 235 months, or 14 to 17.5 years.
Mr. Skilling has already spent more than six years in custody. He could be eligible to reduce his sentence by 15% for good behavior, meaning another 25 months could be shaved from his time in prison according to Kirby Behre, an attorney with Paul Hastings LLP in Washington, D.C., who specializes in sentencing issues.
Another year could be cut from his sentence if he chooses to enter into a drug- and alcohol-abuse program while in prison. Also, he could serve the final year of his sentence in a low-security half-way house near his home, and even spend some of those final months on in-home confinement, Mr. Behre said.
"Even with a reduced sentence, Skilling will still have to serve a very stiff sentence that far exceeds what most white-collar defendants receive," Mr. Behre said. "It is clear with hindsight that Skilling's original sentence of 24 years was unusually harsh and it far exceeded what similarly situated defendants received since 2006."
The resentencing will also free up about $41 million in assets from Mr. Skilling's estate to be distributed to victims of the fraud. This includes nearly $3 million related to the sale of a Dallas condominium and a Houston home Mr. Skilling owned, funds from several bank accounts and $5 million he posted as bond when he was first indicted.
About $100,000 of that will go to a fund to reimburse Enron employees whose retirement plans were gutted by the company's collapse. The rest will go to a fund set up by the Securities and Exchange Commission to compensate former shareholders. So far that fund has distributed nearly $521 million to approximately 112,000 eligible victims, an SEC spokesman said, including $450 million from settlement agreements and $65 million from forfeiture actions against individuals.
Prosecutors brought criminal charges against nearly three-dozen executives and employees of Enron and firms that did business with it, including Arthur Andersen, the accounting firm that audited the company's books.
Many individuals entered guilty pleas, but several were acquitted and many convictions were later overturned, including that against Arthur Andersen due to vague instructions given to jurors, and the conviction of former Chairman and CEO Ken Lay, who died before he could appeal.
Write to Tom Fowler at [email protected]
Mr. Skilling, 59 years old, was convicted in 2006 of lying to investors about the financial health of the Houston energy company and sentenced to 24 years in prison. The reduced sentence came at the bottom of the range recommended by prosecutors after a deal struck with Mr. Skilling earlier this year.
The Enron scandal led to the company's bankruptcy, dozens of indictments, and the collapse of accounting firm Arthur Andersen. It also upended much of the U.S. energy-trading business for years and prompted tighter corporate governance and reporting requirements, including the Sarbanes-Oxley Act.
Bloomberg NewsEnron's former chief executive, Jeffrey Skilling, arrives at the Bob Casey Federal Courthouse in Houston on Friday.
In 2009, the Fifth Circuit Court of Appeals upheld Mr. Skilling's conviction but found that trial Judge Sim Lake had erred in determining part of his sentence calculation and ordered that Mr. Skilling be resentenced.
Mr. Skilling has consistently maintained his innocence and was working toward winning a new trial. Earlier this year, he reached an agreement with prosecutors, however, to drop his appeals in exchange for a recommendation to the judge for a shorter sentence of between 188 months and 235 months, or 14 to 17.5 years.
Mr. Skilling has already spent more than six years in custody. He could be eligible to reduce his sentence by 15% for good behavior, meaning another 25 months could be shaved from his time in prison according to Kirby Behre, an attorney with Paul Hastings LLP in Washington, D.C., who specializes in sentencing issues.
Another year could be cut from his sentence if he chooses to enter into a drug- and alcohol-abuse program while in prison. Also, he could serve the final year of his sentence in a low-security half-way house near his home, and even spend some of those final months on in-home confinement, Mr. Behre said.
"Even with a reduced sentence, Skilling will still have to serve a very stiff sentence that far exceeds what most white-collar defendants receive," Mr. Behre said. "It is clear with hindsight that Skilling's original sentence of 24 years was unusually harsh and it far exceeded what similarly situated defendants received since 2006."
The resentencing will also free up about $41 million in assets from Mr. Skilling's estate to be distributed to victims of the fraud. This includes nearly $3 million related to the sale of a Dallas condominium and a Houston home Mr. Skilling owned, funds from several bank accounts and $5 million he posted as bond when he was first indicted.
About $100,000 of that will go to a fund to reimburse Enron employees whose retirement plans were gutted by the company's collapse. The rest will go to a fund set up by the Securities and Exchange Commission to compensate former shareholders. So far that fund has distributed nearly $521 million to approximately 112,000 eligible victims, an SEC spokesman said, including $450 million from settlement agreements and $65 million from forfeiture actions against individuals.
Prosecutors brought criminal charges against nearly three-dozen executives and employees of Enron and firms that did business with it, including Arthur Andersen, the accounting firm that audited the company's books.
Many individuals entered guilty pleas, but several were acquitted and many convictions were later overturned, including that against Arthur Andersen due to vague instructions given to jurors, and the conviction of former Chairman and CEO Ken Lay, who died before he could appeal.
Write to Tom Fowler at [email protected]