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US: SKILLING GETS 24 YEARS IN PRISON FOR ENRON FRAUD

by Tom FowlerHouston Chronicle
October 23rd, 2006

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 has 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 Butner, 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 of white-collar crime.

"He remains the last man standing in a five-year run of corporate fraud investigations and sentencings," said Robert Mintz, a New Jersey-based former prosecutor who follows the cases. "It reads like a Hollywood script."

Co-defendant Ken Lay died in July, and his indictment and conviction were later thrown out, freeing his estate from the government's claim in criminal court.

Skilling, insisting he was innocent yet remorseful in a two-hour hearing, was the last top former official to be punished for the accounting manuevers and shady business deals that led to the loss of thousands of jobs, more than $60 billion in Enron stock and more than $2 billion in employee pension plans when Enron collapsed.

Skilling's term is the longest received by any Enron defendant; former chief financial officer Andrew Fastow was given a six-year term after cooperating with prosecutors and helping them secure Skilling's conviction.

"The Enron fraud is as large and as serious as any other fraud in the nation's history," said prosecutor Sean Berkowitz in arguing for a lengthy sentence.

"This was not a one-time event where someone made an judgment in error," Berkowitz said.

He said Skilling's philanthropy was worth noting but " ... It is not unusual for someone in his position to give back to the community, in fact it is required."

Berkowitz quoted from a victim's letter: "Mr. Skilling's philanthropy was paid out of my future."





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