Skip to comments.Skilling Gets 24 Years in Prison for Enron Fraud
Posted on 10/23/2006 2:15:07 PM PDT by Ready4Freddy
Former Enron CEO Jeff Skilling was sentenced today to 24 years in prison for his role in the energy company's 2001 collapse in what become one of the nation's biggest corporate scandals.
U.S. District Judge Sim Lake ordered Skilling to home confinement with an ankle bracelet to monitor his movements. He told the U.S. Bureau of Prisons to recommend when Skilling should report to prison and suggested he be sent to the federal facility in Butler, N.C.
"This is not an easy decision,'' Lake said. "Sentencing is the most difficult and least pleasant part of my job Mr. Skilling has a family who loves him.''
He added, however, "His crimes have imposed on hundreds if not thousands, a life sentence of poverty."
Lake's sentence, more precisely 292 months, also ordered Skilling to participate in alcohol and mental health programs. He also approved the forfeiture of $45 million to be distributed to Enron employees.
That money will be distributed via the civil shareholder case going on before U.S. District Judge Melinda Harmon.
Defense attorney Daniel Petrocelli argued for a 10-month reduction, so that the 52-year-old Skilling could serve at a lower-security prison. Lake refused.
Skilling's sentencing marks vindication for some and a capstone to an era of corporate crime for others.
Victims of the company's downfall hope it will provide a satisfying coda to their search for justice and retribution.
"I want him to see life without parole, for all the lies he told us and others," said Charles Prestwood, a former Enron pipeline employee who lost his pension.
To others, the timing of Skilling's sentencing, after most of the other large corporate scandals such as WorldCom and Adelphia have played out, brings a tidy end to an era...
(Excerpt) Read more at chron.com ...
And a few more comments on a radio announcement thread here - http://www.freerepublic.com/focus/f-news/1724478/posts
"federal facility in Butler, N.C."
I'm surprised he is coming to Butler. Butler is located in one of the most beautiful part of our state, and very cold in the winter months. This will be no picnic. He will have a lot of time to think about his crime. Maybe he will write a book and give the proceeds to the people that lost their life savings.
I feel for them, however, I wonder why any investor would put all their eggs in one basket. This will be a lesson for a long time to come.
Let this be a lesson to anyone who wants to cook the books and get away with it to run for Congress.
|1||Conspiracy to commit securities and wire fraud||5||GUILTY|
|2||Securities fraud (Raptor transactions)||10||GUILTY|
|14||Securities fraud (Financial statements, 1999 10K, March 30, 2000)||10||GUILTY|
|16||Securities fraud (Financial statements, 2nd quarter 2000 10Q, Aug. 14, 2000||10||GUILTY|
|17||Securities fraud (Financial statements, 3rd quarter 2000 10Q, Nov. 14, 2000)||10||GUILTY|
|18||Securities fraud (Financial statements, 2000 10K, April 2, 2001)||10||GUILTY|
|19||Securities fraud (Financial statements, 1st quarter 2001 10Q, May 15, 2001)||10||GUILTY|
|20||Securities fraud (Financial statements, 2nd quarter 2001 10Q, Aug. 14, 2001)||10||GUILTY|
|22||Securities fraud (Analyst call Jan. 22, 2001)||10||GUILTY|
|23||Securities fraud (Analyst conference in Houston Jan. 25, 2001)||10||GUILTY|
|24||Securities fraud (Analyst call March 23, 2001)||10||GUILTY|
|25||Securities fraud (Analyst call April 17, 2001)||10||GUILTY|
|26||Securities fraud (Analyst call July 12, 2001)||10||GUILTY|
|31||False statements to auditors in annual representation letter (1999 10K; March 13, 2000)||10||GUILTY|
|32||False statements to auditors in annual representation letter (2000 10K; Feb. 23, 2001)||10||GUILTY|
|34||False statements to auditors in quarterly representation letter (2000 2nd quarter 10Q; August 11, 2000)||10||GUILTY|
|35||False statements to auditors in quarterly representation letter (2000 3rd quarter 10Q; Nov. 13, 2000)||10||GUILTY|
|36||False statements to auditors in quarterly representation letter (2001 first quarter 10Q; May 15, 2001)||10||GUILTY|
|42||Insider trading ($739,000 on April 25, 2000)||10||NOT GUILTY|
|43||Insider trading ($6.34 million on April 26, 2000)||10||NOT GUILTY|
|44||Insider trading ($1.29 million* on Aug. 30, 2000)||10||NOT GUILTY|
|45||Insider trading ($5.22 million* on Sept. 1, 2000)||10||NOT GUILTY|
|46||Insider trading ($972,000* on Sept. 5, 2000)||10||NOT GUILTY|
|47||Insider trading ($6.04 million* on Nov. 1, 2000)||10||NOT GUILTY|
|48||Insider trading ($1.65 million* on Nov. 2, 2000)||10||NOT GUILTY|
|49||Insider trading ($3.80 million* on Nov. 7, 2000)||10||NOT GUILTY|
|50||Insider trading ($20.99 million* on Nov. 15, 2000)||10||NOT GUILTY|
|51||Insider trading ($15.59 million*B115 on Sept. 17, 2001)||10||GUILTY|
I wonder why any investor would put all their eggs in one basket.
There was a narrow ten day or two week window in which they could not sell. The 401(k) custodian was being changed. If I remember correctly, by that time the stock had lost over 75% of its peak value. A lot of people had never had such wealth (at the high), got greedy, and held on way too long as the stock took over a year to slide to worthless.
There was a narrow ten day or two week window in which they could not sell.
Well, at least he's rich.
Yes, you're right, he's rich. Skilling will not need the 12 cents an hour he'll get for peeling potatoes, scrubbing toilets and swabbing the concrete floors. But then again, it will be the first honest work he's done since he joined Enron.
Maybe Skilling will finally figure out what crimes to commit and which ones to leave alone.
Bingo! Or maybe if he raped a little girl/boy. Then he would get about 4 years, max.
Listen, I think what these guys did was dispicable but the people who "lost everything" did so because they were greedy. They hopped on the gravy train and rode it for all it was worth. I have very little sympathy for people who are foolish enough to put their entire life savings into one stock and then bitch when it goes bust. They still would have taken a big hit even if they were diversified but it would be recoverable.
It's "Butner, NC"
Or maybe if he was the mastermind of the entire Enron financial deal he would be out in two years!
Andy Fastow was the mastermind behind all the sham companies and money transfers. He admitted that Lay and Skilling were not even aware of most of those schemes. However...
He got to the DA first, got his case transferred out of the grand jury, got a deal where he got to see all the evidence against him beforehand, and he'll probably be be out in about two years.
And by the way, he won't even be going to prison. He gets to go to a clinic to treat his 'addiction' to depression medication.
But it will make people feel better if *somebody* gets 26 years, even if it isn't the guy who made it happen.
Why "not guilty" on the insider trading counts? Too hard to prove?
these people like Skilling think they are above the lawand every day people are beneif them. I just love these kind of ass--holes
Fastow's a smart boy. Criminal genius, will write a book and get richer and richer.
Read more at sacredscoop.com ...
How about the two people that plea bargained in the horrific February 20, 2003 West Warwick, Rhode Island nightclub fire, that was started by a pyrotechnic device used by the rock band Great White, killing 100 people and injuring another 200 in a matter of minutes. They both pleaded no-contest and received 4 years in a low security prison and qualify for a work release program. Under state sentencing guidelines they quality for parole in only 16 months.
Very obvious this country values the loss of money over the loss and injury of innocent human life.
...and he'll probably be be out in about two years.
Nothing ever came of Fastow claiming that certain banks were involved in the Enron downfall, either.
Skilling should get a lot of prison time. Nonetheless, when I read about child rapists and murderers getting sentences of two years, released on shock probation after 6 months, etc., I have to question our U.S. system of justice.
Raping a child vs. stealing money? That's a slam dunk in my opinion, castrate the rapist, then cut him into two inch pieces and feed him to the hogs. Put the guy who robbed the money into prison.
".... very cold in the winter months."
"I'm sure Andy [Fastow] has lots of $$$ waiting for him when he gets out of treatment."
But, won't he be subject to civil suits by the employee/stockholders who lost so much?
I'd like to see some partners from Arthur Andersen behind bars, too.
Along with some lawyers and others.
Many people knew well what was taking place. Most have probably gotten away with little consequence.
"It's "Butner, NC""
Yes, I know. Butner is not too far from Asheville. set back in the foothills of the beautiful North Carolina mountains.
Thanks. You proved my point.
The wrong man got the long sentence. Fastow was behind it all, and skated. Makes me sick. I feel somewhat sorry for Skilling. Regardless as how he comes across on TV, I believe he did not know a lot, if anything of what Fastow was up to. I sure wouldn't want to be a CEO these days. Too much risk.
That's the way the criminal justice system works in this country. There are girlfriends of drug dealers, for example, who got longer sentences than the actual dealer, simply because they didn't know enough to be able to cut a deal with the prosecutor. The whole thing is screwed up six ways to Sunday. Nobody seems to care. Unitl now, of course.
He's already so rich it hurts. His wife and her family own shopping malls all over the southwest. A lot of stuff was put in her name originally, it did't have to be transferred.
They have a lot of influence over the court system too. There was a big scandal years ago where the wife's family was secretly paying off politicians and LEOs and others. The SEC got involved, IIRC. Both Mr. and Mrs. Fastow are up to their ears in this. She got one year, he got about 5 but will be out earlier.
Everyboy is happy that *somebody* is getting punished and Fastow skates. It makes no sense.
[But, won't he be subject to civil suits by the employee/stockholders who lost so much?]
OJ has never paid a dime re his civil suits, so if that idiot can get away with it, it'll be a cake walk for Fastow.
Look at what has happened so far. Skilling's charges are mainly about financial statements and letters to stockholders. He wasn't found guilty of insider trading or creating the sham companies. The sham companies and the financial statements were the work of...FASTOW! Fastow was the CFO. His wife was a treasurer there. Some of the sham companies were named for her. She gets one year, he gets 5 in a rehab center.
Her family has a lot of money - more now since Andy has been the son-in-law. They owned the Weingarten grocery stores and now own a huge number of shopping centers. They've been a political power for decades. They have been investigated for paying off officials to prosecute people who didn't pay their grocery bills. No wonder they were able to get Andy tried in a different court.
And now everybody is celebrating that a guy who left Enron six months before the collapse is going to prison. The whole fiasco shows how the justice system is manipulated. As they say, it's the best money can buy.
You proved my point.
Jeff will in all likelihood get a cushy pen where he has access to entertainment, library, recreation, and plenty of visitation from loved ones...still 24 years, wow! First time armed robbery is usually just a 7-year stretch in the slammer. (Of course, I'm assuming that Skilling will be subjected to parole terms after a four-year confinement.)
(Of course, I'm assuming that Skilling will be subjected to parole terms after a four-year confinement.)
Good point.There is no way this massive fraud could have been perpetrated w/out the active collusion of the so called "independant" outside auditors.Bottom line-Andersen chose to ignore the obvious in order to continue to collect fees for consulting services.
1. ANDREW STUART FASTOW 14343-179 44 White M
Fastow gave up ~$30 million in cash and property as part of his plea agreement (and don't labor under the mistaken idea that the Feds weren't aware of property transfers, which can be unwound).
He'll have to do at least 5 years, and there's a good chance that the Feds will appeal his sentence to try to get it back to the previously-agreed-upon 10 years. Hey, ya pays yer money and ya takes yer chances - Fastow's testimony nailed Lay & Skilling (who gives up ~$45 million). The big kahunas chose a trial, and lost, not unusual that they were facing more time.
'..didn't pay their grocery bills..'- lol, the Weingartens sold their grocery chain what?, 26-30 years ago? Some family members do run a REIT (Weingarten Realty Trust), a very successful one by their record over the last >20 years.
There was outrage Wednesday when a Vermont judge handed out a 60-day jail sentence to a man who raped a little girl many,many times over a four-year span starting when she was seven.
Is there anyone who thinks Mr. Skilling's crimes merited longer incarceration than those commited by Lynn Stewart, The Terrorist Lawyer?
When they locked up Martha Stewart I knew that was a sham..
This guy. He may be a crook. He may be a rich crook but in any case something tells me.
This guy is just the Goat.
Actually the Weingarten's scandal was for a bit more than people not paying their grocery bills. Apparently they had (have?)some politicians in their pocket and there was some illegal money changing hands going to lobbyists and political campaigns. And yes, they also were illegally getting LEO's to go after people who didn't pay their grocery bills.
No wonder Leah Weingarten (she apparently never took Fastow's name) was comfortable with the schemes and the sham companies. Even though she was an Enron treasurer and had an MBA in finance she claimed she didn't know about the schemes or sham companies - even the ones that were named after her.
But let's all celebrate some other guy's 26 year sentence.
It still seems a bit harsh to me, considering that a drugged-up doper in this state would get just 7 years for armed robbery of a convenience store! True, the sentence for the doper would be in a tougher pen, than old Jeffy...but Skilling:
1. Wasn't alone in his bilking ENRON's pension plan,
2. He and Ken Lay believed the stock was going to right (doesn't excuse him) itself.
3. Has had to pay a hefty fine for crime too.
And yes, they also were illegally getting LEO's to go after people who didn't pay their grocery bills.
So... are you saying that Lea Weingarten was involved in the grocery bill 'scandal'? Was she popping caps in a shopper's a$$? Or breaking kneecaps, all while she was in High School or early college, apparently? BTW, she was charged and incarcerated under the name Lea W. Fastow...
No wonder Leah Weingarten (she apparently never took Fastow's name) was comfortable with the schemes and the sham companies.
I doubt that the Feds ever really wanted Lea Fastow - they used the threat of her prosecution to get Andy to play ball. They even dropped the 2 directly-Enron-related charges against her in the negotiations (leaving the Federal tax charge to which she pleaded guilty), no doubt due to, among other things, the difficulty of prosecuting a wife on the basis of a husband's testimony. The Feds already had all the little guys they wanted, before Andy Fastow decided to cooperate. Consider all that happened to Lea Fastow as the dance the Feds engaged in to get what they really wanted - Lay & Skilling, and the only way they were going to get them was through Andy Fastow. You can see her indictment here:
United States v. Lea W. Fastow (PDF) (note the styling of the case)
and her Plea Agreement here:
Even though she was an Enron treasurer and had an MBA in finance she claimed she didn't know about the schemes or sham companies - even the ones that were named after her.
As an aside, ladyjane, you seem to have a real bee in your bonnet regarding the Weingartens. What's up with that? We were able (I think) to pay our grocery bills, but we usually shopped at Henke & Pilot...
I'll look for more information about the scandal. I ran across it quite a few months ago while reading about the Enron scandal.
The bee in my bonnet is about Fastow who by every account was the person running the illegal bookkeeping and the scam companies. Apparently he was the one, along with his wife, who were making the millions. Look at the charges against Skilling. He was found not guilty of all those insider trading charges. He was never even accused of syphoning off money from the company.
Skilling was mainly accused of signing letters to investors and annual reports based on numbers provided by the CFO. Fastow was the CFO and his wife had been a treasurer.
BTW - after Fastow cut his deal his wife refused to accept it and supposedly cut her own deal! LOL