"Using Expensive Legal Claims As Leverage, Top Enron Fraudster Reaches Deal To Slash Sentence"
Even when Jeffrey Skilling was first sentenced for conspiring in one of the largest corporate fraud schemes in modern history, he received less jail time than some low-level drug offenders sentenced to harsh mandatory minimums. But this week, Skilling reached a deal with the Department of Justice to cut his 24-year sentence to as little as 14 years, in exchange for abandoning the onslaught of appeals he has launched at his own expense. Reuters reports:
The agreement … could result in Skilling’s freedom in late 2018, with good behavior.
In exchange, Skilling, 59, who has long maintained his innocence, agreed to stop appealing his conviction. The agreement would also allow more than $40 million seized from him to be freed up for distribution to Enron fraud victims.
A resentencing became necessary after a federal appeals court upheld Skilling’s conviction but found the original sentence too harsh.
Once ranked seventh on the Fortune 500 list of large U.S. companies, Enron went bankrupt on December 2, 2001 in an accounting scandal that remains one of the largest and most infamous U.S. corporate meltdowns.
Thousands of workers lost their jobs and retirement savings, and images were beamed around the globe of staff carrying possessions out of Enron’s downtown Houston office tower, past the company’s “crooked E” logo.
Even in 2006, when Skilling was first sentenced, his legal defense was deemed one of the most expensive in history at $65 million, and in the years since he has taken his case to the Supreme Court and back on appeal after appeal. By settling, the Department of Justice not only saved itself the considerable expense of continuing this legal battle; it also gets access to the more than $40 million in seized assets Skilling had previously not agreed to surrender. As a consequence of these negotiations, Skilling’s sentence is even more disparate from the 25-year-plus sentences of drug defendants charged for low-level offenses like selling their own pain pills to an undercover informant.
If Skilling’s reduced sentence is approved by a judge during his June hearing, as is likely, Skilling will nonetheless not have had an ideal run with the criminal justice system. His lawyers made a persuasive argument that the statute initially used to convict him was overly broad. And his sentence was disproportionately high relative to alleged Enron scandal mastermind Andrew Fastow, who got only six years in prison after he testified against both Skilling and Enron Chairman Kenneth Lay. But more severe versions of these problems plague countless criminal defendants, who, rather than having the leverage to shorten their sentence or the legal resources to take down a statute, are coerced into plea deals under threat of draconian prison terms.