Legal News

Skilling Conviction Upheld, Resentencing Ordered

By Dan Slater

In April, we shed a few tears for LB colleague Amir Efrati. He eagerly flew all the way to New Orleans to cover the appellate argument over the conviction of Jeff Skilling, the former CEO of Enron who received a 24 year-sentence after being convicted on 19 counts of fraud, conspiracy, insider trading and lying to auditors.

Amir hoped to hear some debate over Skilling’s brief, which argued that the government had withheld crucial evidence. But no luck. The judges on the panel stayed largely silent during oral arguments, giving little indication of their thinking on the case. But the argument wound up being a real snoozer.

Nine months later, the court has reportedly made a decision. The 5th Circuit Court of Appeals upheld the convictions, but ordered that Skilling be re-sentenced. Here’s the 105-page opinion. The 5th Circuit said U.S. District Judge Sim Lake erred by applying guidelines that resulted in a 24-year prison term.

On the sentencing issue, district judge Sim Lake gave Skilling a “four-level enhancement” to his sentence “for substantially jeopardizing the safety and soundness of a ‘financial institution.’” Under the 2000 Sentencing Guidelines, the extra four levels of enhancement raised Skilling’s “Offense Seriousness Level” to 40. (He began with a level of six, which was enhanced by a host of other “upward departures.”) Under the guidelines, the level of 40 yielded a sentencing range of 292 to 365 months’ imprisonment. Judge Lake opted for 292 months, or 24 years and four months.

The Fifth Circuit, however, disagreed with the four-level enhancement because, it ruled, the financial institutions at issue here — the Enron Corporation Savings Plan and the Employee Stock Ownership Plan — were not “financial institutions,” as defined by the U.S. sentencing guidelines. So it kicked the sentencing back to Judge Lake. (We’re not, at this moment, clear on the range of months that a level of 36 — 40 minus 4 — would yield for a defendant with Skilling’s criminal history, but we’re looking into it.)

UPDATE: A Loyal Reader just sent along the 2000 Guidelines table. Skilling was probably in criminal history category I, the Reader tells us. If so, his range would be reduced from 292 - 365 months to 188 - 235 months. But U.S. v. Booker would still permit Judge Lake to impose the same sentence based on the 18 U.S.C 3553(a) factors, rather than the Guidelines.

Full post as published by Law Blog - WSJ.com on January 06, 2009 (boomark / email).