Friday, June 21, 2013

Enron CEO Jeff Skilling resentenced officially to 14 years after plea deal

As reported in this new Houston Chronicle article, headlined "Enron’s Skilling gets more than 10 years cut off sentence," today marked the official resentencing of perhaps the highest-profile white-collar defendant this side of Bernie Madoff. Here are the details:

Former Enron CEO Jeff Skilling had more than 10 years cut off his 24-year prison sentence today after a federal judge signed off on an agreement between the disgraced Houston executive and federal prosecutors.  Skilling, 59, could be released as early as 2017.

Skilling, in turn, agreed to drop his ongoing appeals and surrender any claim on the $40 million that had been seized by the government after his indictment for wire fraud, insider trading, conspiracy and related charges stemming from the 2001 collapse of one of Houston's leading companies.

The agreement between prosecutors and Skilling's attorney was announced last month. That his sentence was going to be reduced was known for some time, as appeals courts ruled that one of the theories of the prosecution was not valid, and that one of the factors used to enhance the length of his sentence was improper.  But it was unclear precisely what the sentence would have been as Skilling continued to fight to clear his name of criminal wrongdoing.

By settling with the government, the Enron matter — from a criminal perspective — is all but closed.... Implicit in the formal wording of the agreement was the government's desire to be done with Enron, a corporate scandal that eventually was dwarfed by the financial misbehavior and reckless decisions that helped bring about the economic collapse of 2008....

The sentencing agreement gave federal judge Sim Lake the discretion of a sentence range of 168 to 210 months imprisonment.  Skilling has already served about 78 months, or 6 1/2 years. Skilling currently is housed at a minimum security facility in Littleton, Colo.

June 21, 2013 in Enron sentencing, White-collar sentencing, Who Sentences? | Permalink | Comments (0) | TrackBack

Wednesday, May 08, 2013

Feds and Jeff Skilling cut resentencing deal to fix new guideline range at 168 to 210 months

As had been previewed a public notice to victims from the Justice Department last month (noted here), federal prosecutors and former Enron CEO Jeff Skilling have reached a deal concerning unresolved matters before Skilling's resentencing. This Reuters article details the basics of this notable high-profile sentencing development:

Jeffrey Skilling, the former Enron Corp chief executive, could be freed from prison nearly a decade sooner than originally expected, under an agreement with federal prosecutors to end the last major legal battle over one of the biggest corporate frauds in U.S. history.

The agreement calls for Skilling to see his federal prison sentence reduced to as little as 14 years, down from the 24 years imposed in 2006. It 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....  Wednesday's agreement, which is subject to court approval, recommends that Skilling be resentenced to between 14 and 17-1/2 years in prison, including time already spent there. Skilling has been in prison since December 2006.

A helpful readers forwarded to me the 7-page sentencing agreement, which can be downloaded below.  Here are the essential pieces of the deal:

The Government and the defendant agree that, based on the previous decisions of the Fifth Circuit with respect to proper calculation of the United States Sentencing Guidelines range and this Court's prior sentencing rulings on October 23, 2006, the United States Sentencing Guidelines provide that the defendant should be resentenced using an adjusted offense level of 36 and a criminal history category of I, resulting in an advisory guidelines range of 188 to 235 months of imprisonment.

For the reasons set forth below as "Relevant Considerations," the Government and the defendant agree to recommend jointly that the District Court apply a one-level downward variance and resentence the defendant using an adjusted offense level of 35, pursuant to the United States Sentencing Guidelines.  Given that the defendant is located in criminal history category I for resentencing purposes, the jointly recommended adjusted offense level will result in a jointly recommended guidelines range of 168 to 210 months of imprisonment.

Neither the Government nor the defendant will seek any variance or departure from the jointly recommended guidelines range.  The Government may allocute at sentencing, but the Government will not take a position regarding the particular sentence the District Court should impose within the jointly recommended guidelines range.

The defendant agrees to waive all potential challenges to his convictions and sentence, including a motion for a new trial pursuant to Federal Rule of Criminal Procedure 33, appeals, and collateral attacks, except as set forth [below]....

Neither the Government nor the defendant will appeal a sentence imposed within the jointly recommended guidelines range.  However, the Government and the defendant each reserve the right to appeal a sentence imposed outside this range.

Download Skilling Sentencing Agreement final.cfv

May 8, 2013 in Enron sentencing, Federal Sentencing Guidelines, Offense Characteristics, Procedure and Proof at Sentencing, Purposes of Punishment and Sentencing, Scope of Imprisonment, White-collar sentencing, Who Sentences? | Permalink | Comments (4) | TrackBack

Thursday, April 04, 2013

Resentencing of Enron CEO Jeff Skilling perhaps on the verge of a resolution through a sentencing deal

This new CNBC report, which has a somewhat inaccurate headline and first sentence, provides an interesting update on a long-delayed high-profile resentencing.  The article is headlined "Enron's Jeff Skilling Could Get Early Release From Prison," and the first sentence reads as follows: "Former Enron CEO Jeffrey Skilling, who is serving a 24-year prison term for his role in the energy giant's epic collapse, could get out of prison early under an agreement being discussed by his attorneys and the Justice Department, CNBC has learned."  The rest of the story explain what is going on and reveals why I call the start of the piece inaccurate:

Skilling, who was convicted in 2006 of conspiracy, fraud and insider trading, has served just over six years. It is not clear how much his sentence would be shortened under the deal.

A federal appeals panel ruled in 2009 that the original sentence imposed by U.S. District Judge Sim Lake was too harsh, but a re-sentencing for the 59-year-old Skilling has repeatedly been delayed, first as the appeals process played out, and then as the negotiations for a deal progressed. Those talks had been a closely guarded secret, but Thursday the Justice Department quietly issued a notice to victims required under federal law:

"The Department of Justice is considering entering into a sentencing agreement with the defendant in this matter," the notice reads. "Such a sentencing agreement could restrict the parties and the Court from recommending, arguing for, or imposing certain sentences or conditions of confinement. It could also restrict the parties from challenging certain issues on appeal, including the sentence ultimately imposed by the Court at a future sentencing hearing."

A Justice Department spokesman declined to comment. Skilling's longtime defense attorney, Daniel Petrocelli, could not immediately be reached for comment.

Lake, who imposed the original sentence, would have the final say in the sentence. The posting of the notice, however, suggests the parties have some indication he will go along. Lake held a private conference call with attorneys for both sides last month.

For Skilling, who has consistently maintained his innocence, an agreement would end a long ordeal, although his conviction on 19 criminal counts would likely stand. The government, meanwhile, would avoid a potentially messy court battle over alleged misconduct by the Justice Department's elite Enron Task Force appointed in the wake of the company's sudden failure in 2001.

Skilling's attorneys had planned to move for a new trial based on that alleged misconduct. Under a sentencing agreement, that motion would likely be dropped.

UPDATE: Thanks to a helpful reader, I discovered that the crime victim notice from DOJ referenced in this article is available at this link.

April 4, 2013 in Enron sentencing, Victims' Rights At Sentencing, White-collar sentencing, Who Sentences? | Permalink | Comments (1) | TrackBack

Tuesday, October 25, 2011

"Five years later, Skilling's sentence is still up in the air"

I just came across this notable recent piece from the Houston Chronicle, which was authored by lawyers Jeff Ifrah and Jeffrey Hamlin, and which shares a headline with the title of this post.  Here is how the piece starts:

Oct. 23, 2011, will mark the five-year anniversary of Jeffrey Skilling's sentencing and, remarkably, no one yet knows what the former Enron CEO's final sentence will be.

In May 2006, Skilling was convicted in the wake of Enron's collapse on one count of conspiracy, 12 counts of securities fraud, five counts of making false statements to auditors and one count of insider trading.  Five months later, U.S. District Judge Sim Lake sentenced Skilling to 292 months — more than 24 years — in prison and assessed $45 million to be paid in restitution.

But given the vagaries of the federal sentencing system, Skilling, who is now serving time in a prison in Englewood, Colo., could end up serving that same 24 years, or significantly more time, or even significantly less time, for the crimes that he committed as leader of Enron.  Skilling is currently scheduled for release on Feb. 21, 2028, when he will be 74 years old.  He could, however, end up getting out of prison well before that and still in the prime of life — or he might serve what amounts to a life sentence.

Since the sentencing, Skilling's legal team has achieved some victories.  In January 2009, the U.S. Court of Appeals for the 5th Circuit vacated Skilling's sentence on the grounds that the district court misapplied the federal sentencing guidelines.  The next year, however, the U.S. Supreme Court held that the trial record didn't support a conviction on one of the prosecution's key theories — conspiracy to commit "honest services" wire fraud. But Skilling suffered a defeat last April, when the 5th Circuit upheld his conspiracy conviction and found this "honest services" error to be harmless.

With all that, though, Skilling still needs to be resentenced, and Judge Lake has not yet set a date for the resentencing.

October 25, 2011 in Enron sentencing, Federal Sentencing Guidelines, Procedure and Proof at Sentencing, Sentences Reconsidered, White-collar sentencing | Permalink | Comments (2) | TrackBack

Thursday, May 19, 2011

"Enron exec Andy Fastow nears prison release"

The title of this post is the headline of this new CNN piece.  Here are snippets:

Former Enron executive Andrew Fastow has been transferred from prison to a halfway house, the last stage of incarceration before his scheduled release later this year, according to the federal Bureau of Prisons.

Fastow, who was chief financial officer at the now-defunct energy company, was moved on Monday to a facility in Houston, according to the bureau. Moving into a halfway house is a typical move for most prisoners during the last portion of their sentence. "It's a bridge, if you will, a transition period," said bureau spokesman Edmond Ross.

The purpose of the halfway house is for prisoners to reestablish family ties and adjust to society outside of prison, he said. Prisoners are allowed to leave the facility to go to their jobs, but their movements are still controlled. "They cannot come and go as they please," said Ross. "Their lives are restricted to the rules of the halfway house."...

Fastow pleaded guilty in 2004 to two counts of wire and securities fraud for his role in the accounting scandal that brought down Enron.... Fastow provided information on Enron's sketchy financial shenanigans, including the names of bankers who he considered complicit, to lawyers representing Enron shareholders.

May 19, 2011 in Enron sentencing, White-collar sentencing | Permalink | Comments (0) | TrackBack

Wednesday, April 06, 2011

Fifth Circuit makes former Enron CEO Skilling's SCOTUS victory Pyrrhic

As detailed in this Reutersreport, "[f]ormer Enron Chief Executive Jeffrey Skilling was unsuccessful in his latest bid to overturn his criminal conviction as a U.S. appeals court called any errors in his trial 'harmless.'"  Here is how the Fifth Circuit's opinion in US v. Skilling, No. 06-2088 (5th Cir. April 6, 2011) (available here), gets started:

Former Enron Corporation CEO Jeffrey K. Skilling was convicted of conspiracy, securities fraud, making false representations to auditors, and insider trading.  After we affirmed his convictions, the Supreme Court invalidated one of the objects of the conspiracy charge — honest-services fraud — and remanded, instructing us to determine whether the error committed by the district court in submitting the honest-services theory to the jury was harmless as to any of Skilling’s convictions.  Because we find that the error was harmless, we affirm the convictions.  In addition, for the reasons stated in our previous opinion, we vacate the sentence and remand for resentencing.

So while Skilling's trip to the Supreme Court created some important new federal criminal law, it appears that he will get no substantive relief from the SCOTUS ruling in his favor last year.  That all said, Skilling's High Court success might not end up being completely for naught, as he still has a resentencing ahead and perhaps he can contend that he deserves some measure of sentencing credit for his troubles.

Meanwhile, I would be surprised if resentencing is the next development in the long-running Skilling saga.  I would expect Skilling's lawyers to seek en banc and/or certiorari review of today's Fifth Circuit panel holding.  But if further review of his convictions are not forthcoming, then Skilling's case will become a high-profile resentencing proceeding; as some may recall, the Fifth Circuit reversed in a prior opinion a key guideline determination that led in part to Skilling's original 24+ year (within-guideline) prison term.

UPDATE:  Over at White Collar Crim Prof blog, Ellen Podgor has this lengthy new post titled "Commentary on Skilling Remand Decision."

April 6, 2011 in Booker in district courts, Enron sentencing, Procedure and Proof at Sentencing, Sentences Reconsidered | Permalink | Comments (8) | TrackBack

Monday, March 28, 2011

Notable Enron insider trading sentencing outcome and reasoning

This Bloomberg report, headlined "Ex-Enron Broadband Executive Sentenced for Insider Trading," caught my attention for a number of reasons.  Here are the details:

Former Enron Broadband Services executive Rex Shelby was sentenced today on an insider trading charge linked to the investment fraud that destroyed the world’s largest energy trader 10 years ago.  Shelby, 59, pleaded guilty to one count of insider trading and was sentenced to three months in a federal halfway house and three months of house arrest. Shelby will also forfeit about $2.6 million in profits from the illicit trade.

Shelby’s lawyer Ed Tomko told a judge that Shelby has also agreed to forfeit another $1 million to resolve related Securities and Exchange Commission charges. He faced a maximum of 10 years and a fine of $1 million on the one count before reaching his plea deal. He’ll be in probation for two years, including the six months of combined confinement....

U.S. District Judge Vanessa Gilmore sentenced Shelby to half the number of months confinement that he’d agreed to in a plea deal.  “Mr. Shelby’s actions ultimately did not cause the downfall of Enron,” she said.  “Only a few individuals at the pinnacle of Enron knew of the fraud.”

Gilmore said she moderated the sentence to fit Shelby’s role and the punishments given to others in the Enron fraud scheme.  She said the fact Shelby has for the last eight years devoted himself exclusively to working on his defense, in “self-imposed home confinement"”, was also a consideration in her decision....

Shelby and six other EBS executives were indicted in 2003 on charges they helped the parent company’s senior management, including Enron’s former Chairman Kenneth Lay and Chief Executive Officer Jeffrey Skilling, deceive analysts and investors about the unit’s capabilities and financial performance.

The executives were accused of misrepresenting EBS at a January 2000 analysts’ conference, where they portrayed it as one of Enron’s “core’’ units, worth about $50 billion. In reality, the division struggled to launch products and never earned a profit.

Enron’s stock soared from $54 a share the day of the analysts’ conference to $72 a share the following day. Shelby sold 150,000 shares on the price increase, reaping gross proceeds of just under $10.7 million, according to his plea.

Shelby had long maintained he sold the shares to diversify his portfolio and not based on any inside knowledge of an alleged conspiracy to inflate Enron’s stock price. To avoid a trial on broader conspiracy and fraud charges, which had been set to begin this past January, Shelby pleaded guilty to one count of insider trading in November....

Shelby’s sentencing marks the end of the Enron Broadband case, which yielded mixed results for the government. Two of the seven originally indicted EBS executives -- Kenneth Rice and Kevin Hannon, who each served as president of the division at one time -- pleaded guilty before trial and testified against former colleagues.

The remaining five executives, including Shelby, were tried together in Houston federal court in 2005. That trial ended with no convictions and a smattering of acquittals, as jurors failed to reach verdicts on scores of counts. None of the men were completely exonerated at that trial, and the government vowed to streamline its case and retry them all on narrower charges.

To avoid that retrial, former CEO Joseph Hirko pleaded guilty to a reduced charge in late 2008 and served about 16 months in prison, forfeiting $7 million. Ex-strategy chief F. Scott Yeager appealed the government’s retrial attempts and in 2009, the U.S. Supreme Court ruled he couldn’t be retried based on his partial acquittal by the first jury.

I have highlighted above one particular passage of this account of the sentencing because I cannot recall hearing of another case in which a judge expressly identified that the time/energy spent by the defendant defending himself as a mitigating sentencing factor.  I do not mean to critique the use of this factor, as much as just to note it here and to welcome comments about whether others have a strong view, concerning in this case or others, as to whether the time/energy spent by a defendant defending himself ought to be viewed as a mitigating sentencing factor.

March 28, 2011 in Booker in district courts, Enron sentencing | Permalink | Comments (6) | TrackBack

Tuesday, October 13, 2009

Should there special doctrines concerning "inflammatory" pre-sentencing publicity?

Among the fascinating aspects of the SCOTUS cert grant in the Skilling case today (basics here) is the pretrial publicity issue raised in the defendant's cert petition. Specifically, here is the second question presented in Skilling's cert petition:

When a presumption of jury prejudice arises because of the widespread community impact of the defendant’s alleged conduct and massive, inflammatory pretrial publicity, whether the government may rebut the presumption of prejudice, and, if so, whether the government must prove beyond a reasonable doubt that no juror was actually prejudiced.

Given that the first question presented in the Skilling cert petition relates to a fraud issue that is already before SCOTUS in two other cases, I cannot help but speculate that the Justices are somewhat interested in this separate claim related to "massive, inflammatory pretrial publicity."  And though I am not fully up-to-speed on the jurisprudence concerning "inflammatory pretrial publicity," I cannot help but speculate (and hope?) that the Skilling case might indirectly prompt lawyers and jurists to give some consideration to whether "massive, inflammatory" pre-sentencing publicity could be the basis for some kind of due process claim in some extreme cases.

Recent related post:

October 13, 2009 in Enron sentencing, Procedure and Proof at Sentencing, Purposes of Punishment and Sentencing, Sentences Reconsidered, White-collar sentencing | Permalink | Comments (3) | TrackBack

SCOTUS to review fraud convictions of Jeff Skilling, former Enron executive

As detailed in this AP report and this SCOTUSblog post, the biggest and perhaps highest-profile white-collar conviction of recent vintage is going to be reviews by the Supreme Court.  Here is the SCOTUSblog report:

The Supreme Court agreed on Tuesday to rule on claims that “searing media attacks” on longtime Enron executive Jeffrey K. Skilling tainted his criminal trial and conviction on various fraud charges.  The case also raises an issue on the scope of the federal law punishing the failure to provide “honest services” as a corporate executive.  This was one of four cases granted review, to be argued early next year.

I am pretty sure there are no sentencing issues before the Court in the case, but I cannot help but have a feeling that the long sentence initially given to Skilling may have played at least some role in the Justices' determination that this case merited review.

Among the interesting sentencing-related issues going forward is whether Skilling will now request bail pending SCOTUS review.  Conrad Black failed to get such bail when the Supreme Court took up his case, but he (a) had served less time, and (b) was subject to a much shorter sentence.

October 13, 2009 in Enron sentencing, White-collar sentencing, Who Sentences? | Permalink | Comments (4) | TrackBack

Wednesday, January 07, 2009

Any early predictions on Jeff Skilling's likely sentence the second time around?

As noted here, the Fifth Circuit ordered former Enron CEO Jeff Skilling resentenced because District Judge Sim Lake made a guideline calculation error.  But the Fifth Circuit said little else about Skilling's original sentence, which may ensure that the outcome (and even the terms of debate) for his resentencing are uncertain for the time being. This Bloomberg news reporthas this notable discussion of resentencing possibilities:

If that’s the only basis of resentencing, it would be a modest reduction,” said Kirby Behre, a partner at Paul Hastings Janofsky & Walker in Washington and co-author of “Federal Sentencing for Business Crimes.” “It might be more than modest, but it’s not going to get him down to 10 or 12 years.”

In the 2000 guidelines under which Skilling was sentenced, the financial-institution factor brought his offense level to 40 from 36 and his range to between 292 and 365 months in prison.  Lake imposed 292 months, or 24 years and four months. Dropping the offense level back to 36 brings a range of 188 to 235 months, or 15 2/3 years to 19 years and seven months....

Because the Supreme Court made the guidelines voluntary in January 2005, in a case called U.S. v. Booker, Skilling may be given the same sentence...

Other experts said the judge may reduce Skilling’s sentence to the lower range....  Lake is likely to use the guidelines again when he resentences Skilling, said Paul Cassell, a former federal judge who’s now a law professor at the University of Utah in Salt Lake City. “Most federal judges in the system follow the guidelines, particularly in a case where they’ve used them before,” Cassell said in a phone interview.

For a host or reasons, I am disinclined to make any predictions about resentencing.  In addition, because the Skilling legal team clearly plans to continue appealing his convictions, it is even unclear whether resentencing may be only a few months away or still years away.  Whatever the practical particulars, I would be eager to here reader thoughts on what might happen next on the sentencing side of the Skilling case.

January 7, 2009 in Enron sentencing | Permalink | Comments (3) | TrackBack

Tuesday, January 06, 2009

Enron CEO Jeff Skilling's convictions affirmed, but resentencing ordered

The AP has this early report on today's huge white-collar sentencing news:

An appeals court has upheld former Enron Corp. CEO Jeff Skilling's convictions for his role in the energy giant's collapse but orders that he be resentenced.  A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans on Tuesday denied Skilling's request that his convictions be overturned because they were based on an incorrect legal theory.

But the judges, in their 105-page opinion, ordered that Skilling be resentenced. They said U.S. District Judge Sim Lake erred by applying guidelines that resulted in a 24-year prison term.  Skilling was convicted in May 2006 on 19 counts of fraud, conspiracy, insider trading and lying to auditors for his role in the collapse of Houston-based Enron, once the nation's seventh-largest company.

I will post the opinion once I track it down, and lots of commentary will follow whenever I get the chance to see exactly what the long opinion says.

UPDATE: The full opinion in US v. Skilling is available at this link.  The sentencing discussion does not start until page 97, and here is how the sentencing section begins:

Skilling challenges various aspects of his sentence. In particular, he disputes the district court’s application of the Sentencing Guidelines and the reasonableness of his sentence under 18 U.S.C. § 3553(a).  Because we decide that the court committed error in applying the Guidelines, we do not reach the § 3553(a) requirements, as proper calculation of the Guidelines range is antecedent to a reasonableness challenge.  See Gall v. United States, 128 S. Ct. 586, 596-97 (2007).

January 6, 2009 in Enron sentencing | Permalink | Comments (5) | TrackBack

Monday, June 16, 2008

Upcoming JEC hearing on costs of US drug policy

According to this webpage at FAMM, later this week "Senator Jim Webb (D-Va.) will convene a hearing of the Joint Economic Committee (JEC) to examine the economic consequences of the United States' drug policy."  Here are more details:

The hearing, entitled “U.S. Drug Policy: At What Cost?” will be held Thursday, June 19.  The panel will discuss the illegal drug economy in the United States, assess the costs of U.S. policy responses to combatting drug use and address the need for policy reforms.  The hearing is also likely to address, to some extent, mandatory minimums and sentencing issues.

This page at Stop the Drug War lists expected witnesses, though I cannot yet find any official notice of the scheduled hearing.

As noted in prior posts linked below, last year Senator Webb convened a JEC hearing on the costs of mass incarceration.  It is principally for this reason that I have been excited by the prospect of Senator Webb being on a presidential ticket.

June 16, 2008 in Enron sentencing | Permalink | Comments (2) | TrackBack

Wednesday, April 02, 2008

Will there be any sentencing talk in the Skilling Fifth Circuit argument?

As detailed in a bunch of news stories linked at How Appealing, the Fifth Circuit today will oral argument today in former Enron Corp. CEO Jeffrey Skilling's appeal.  Though the focal point of the news coverage and the briefing are on challenges to his convictions, I am hopeful that a bit of sentencing talk comes up during the appeal.  After all, I think Skilling has a pretty good argument based on 3553(a)(6) that his sentence is unreasonably long given that co-conspirators Andrew Fastow and Richard Causey got much lower sentences.

UPDATE:  I see that Jeralyn at TalkLeft has this effective post on the Skilling appeal which ends with this analysis:

The judges hearing the appeal will be 5th Circuit Judge Jerry Smith, 5th Circuit Judge Edward Prado and U.S. District Judge Alia Ludlum of Del Rio. Smith was one of the judges on the panel that overturned the convictions of Kevin Howard, the former finance chief for Enron's broadband division. I'm a big fan of Judge Prado (he was an early vocal opponent of mandatory minimum sentences.)

As for Skilling, I think 24 years is way too harsh a sentence for any non-violent criminal.  Especially when other culpable defendants get 6 years because they cooperated and told the Government's truth.  I hope he wins his appeal.

April 2, 2008 in Enron sentencing | Permalink | Comments (6) | TrackBack

Friday, February 22, 2008

Brit bankers get American plea bargained justice in Enron-related sentencing

This new post at the WSJ Law Blog, titled "NatWest Three Get 37 Months Each," covers this interesting Friday afternoon sentencing story:

The curtains are closing on the corporate-law drama of the ages.  And three of its final players, we discovered this afternoon, are poised to exit the stage.  The NatWest three — the trio of British bankers who were extradited to the U.S. in mid-2006... — received their sentencing today. David Bermingham, Giles Darby and Gary Mulgrew will each serve 37 months.  Here’s the early AP report, and a report from the Houston Chronicle.

The Three — who were charged with colluding with ex-Enron CFO Andy Fastow and his lieutenant Michael Kopper to steal money from their former employer, Greenwich NatWest, now part of RBS — changed their plea from not-guilty to guilty back in November.   After claiming initially that they did not collude with Fastow, the Three signed a plea agreement, each pleading guilty to one count of wire fraud. 

According to reports, their sentences matched the recommendation of prosecutors, although federal sentencing guidelines recommended 41 months to 51 months.  They will also repay the $7.3 million they gained from the scheme.

At the Three’s request, Werlein is recommending they do their time at Allenwood, a federal prison complex in White Deer, Pa. They’ll reportedely serve six months to a year in U.S. prison before being transferred back to a British prison. (Fastow is serving a six-year term at Oakdale, in Louisiana, while Kopper is serving 37 months at Texarkana, in Northeast Texas.)

Obviously, the lawyers for the NatWest Three effectively schooled them on the reality that they are much better of cutting a deal that risking a trial to assert their claims of innocence.  Notable, the combinded plea-bargained sentences to be served by the NatWest Three and Enron's Fastow and Kopper together still add up to six years less in jail than Jeff Skilling got after his trial conviction.  As I have often said before, the extremely high trial penalty in the federal criminal justice system means that someone who is really guilty (like Fastow) knows that can and should quickly cut a deal so to be much better off than anyone else who might lose at trial after maintaining their innocence (unless they can get a commutation like Libby).

February 22, 2008 in Enron sentencing | Permalink | Comments (2) | TrackBack

Saturday, December 22, 2007

Disparities, trial penalty and Gall in Skilling reply brief

Thanks to this post at White Collar Crime Prof Blog, I was able to access the 162-page reply brief(!) filed by Jeff Skilling's legal team in his Fifth Circuit appeal.  The sentencing arguments begin on page 143, and these disparity arguments are developed starting at page 152:

Skilling’s 24.3-year sentence reflects a profound and unwarranted disparity compared to the (1) uniformly below-Guidelines sentences imposed on eight even more culpable high-ranking executives from major corporations; and (2) the 5.5 year sentence imposed on co-defendant Richard Causey.

In developing point (2), the reply brief makes these points (with some cites omitted) about the relevance of co-defendant disparity:

The [Enron] Task Force says the district court was prohibited from considering the sentence imposed on former Enron CAO Richard Causey because the Guidelines and sentencing statutes concern “nationwide” disparities rather than those among co-defendants.  This is not the law.  This Circuit has long recognized the district court’s ability to consider co-defendants’ sentences.  Similarly, in the post-Booker, advisory-Guidelines regime, courts regularly consider the sentences imposed on co-defendants. Indeed, just this month, the Supreme Court expressly approved of a sentencing court’s giving “specific attention to the issue of disparity when [it] inquired about the sentences already imposed by a different judge on two…co-defendants.”  Gall, slip op. at 9....

There is no rational and lawful basis for the 19-year disparity between Causey and Skilling’s sentences. The only ground offered by the district court [Skilling’s decision to exercise his right to trial] was contrary to the Constitution.

Though the Fifth Circuit might not reach sentencing issues in the Skilling appeal, this case is worth watching closely if they do because these kinds of disparity arguments seem especially important in the wake of Rita, Gall and Kimbrough.

December 22, 2007 in Enron sentencing, Gall reasonableness case | Permalink | Comments (0) | TrackBack

Saturday, December 15, 2007

Fascinating review of recent white-collar sentencing realities

I just noticed this Bloomberg news story detailing some of the sentencing realities of the modern assault on corporate crime.  The story is headlined "Bush Fraud Probes Jail Corporate Criminals Less Than Two Years," and here some lengthy excerpts from a very interesting piece:

Sixty-one percent of defendants sentenced in the Bush administration's crackdown on corporate fraud spent no more than two years in jail, escaping the stiff penalties given WorldCom Inc. and Enron Corp. executives. In the past five years, 28 percent of those sentenced got no prison time and 6 percent received 10 years or more, according to a review of 1,236 white-collar convictions....

A wave of corporate corruption marked by Enron's collapse in 2001 and an accounting scandal at WorldCom led Congress to enact harsher penalties. President George W. Bush signed the Sarbanes-Oxley Act to reform governance and named a Corporate Fraud Task Force to push "significant" prosecutions....

Defendants got reduced jail time when they helped prosecutors investigate frauds, served as low- or mid-level executives, or committed crimes that were less sophisticated than complex accounting conspiracies, the review by Bloomberg News found....Of the 1,236 convictions from 2002 to 2007 in the review, 1,133 defendants were sentenced. Forty-seven percent of those got a year or less in prison....

The Justice Department claimed credit for 1,236 convictions in the crackdown on corruption. The department says it doesn't have a comprehensive list.  Bloomberg assembled a comparable list based on more than 350 cases from task force annual reports, lists of executives, and press releases on the department's Web site....

Joan Meyer, who oversees the task force as senior counsel to the deputy attorney general, argues that any prison sentence can serve as a deterrent. "Every case can't be an Enron,'' Meyer says. "The question is, do we give a pass to white-collar defendants because their crimes are non-violent and result in lesser sentences? That would be an abdication of our responsibilities.''...

At least 129 defendants cooperated with prosecutors, court records show.  The number may be higher, lawyers say, because public files don't always reflect whether a judge credited a defendant for helping the government.....  Judges weigh a crime's nature, the amount of financial loss and a defendant's circumstances in sentencing. Offenders who plead guilty tend to get less time than those who go to trial. 

Defendants are penalized for not accepting responsibility for their crime, while those convicted at trial may be held accountable for the full loss in a fraud.  Of 193 defendants convicted at trial, 38 got 10 years or more....  "The idea that somebody who goes to trial and gets hammered while people who plead guilty get far less time smacks of the Inquisition,'' says defense attorney John Keker of Keker & Van Nest in San Francisco. "I think it's a disgrace.  The going-to-trial penalty should be an embarrassment to judges everywhere.''...

December 15, 2007 in Enron sentencing, Offender Characteristics, Offense Characteristics, Race, Class, and Gender | Permalink | Comments (5) | TrackBack

Friday, October 26, 2007

Is there any principled basis for DOJ opposition to the crack amendment being retroactive?

20071022crack Writing in the National Law Journal, Marcia Coyle has this effective article detailing the state of the debate over whether the US Sentencing Commission will make its new reduced crack guidelines retroactive.  The piece is entitled, "Retroactivity for Crack Sentence Cuts Debated: More than 20,000 crack offenders could have their sentences reduced," and here are key snippets:

As the Nov. 1 effective date approaches for new and lower crack cocaine sentencing guidelines, the U.S. Sentencing Commission has received more than 1,000 public comments on a related proposal -- making those lower sentencing levels retroactive.  The commission has extended the public comment period on the retroactivity issue and has scheduled a Nov. 13 public hearing.

The commission staff recently released an analysis of the impact of making the so-called "crack minus two" guideline amendment retroactive: Nearly 20,000 crack offenders could have their sentences reduced an average of two years or more.

The more than 1,000 public comments on the retroactivity issue heavily favor retroactivity, according to sources close to the commission's work.  The outpouring of comments is unusual for most of the commission's work, but not for the crack cocaine issue, they say. This time the comments appear to be the result of intensive efforts by organizations that have long supported the commission's position that the 100-to-1 crack-powder cocaine sentencing disparity disproportionately affects minorities and low-level offenders and undermines the objectives of the nation's sentencing reform laws.

"We've launched a campaign to ask all of our members to explain to the commission that this is the right thing and the judicially efficient thing to do," said Mary Price, vice president and general counsel of Families Against Mandatory Minimums (FAMM).  Besides FAMM, the commission also has heard from the American Bar Association, the American Civil Liberties Union, Federal Public and Community Defenders, the National Association of Criminal Defense Lawyers, their members and other organizations.

Yet to weigh in on the retroactivity issue is the U.S. Department of Justice.  But spokesman Erik Ablin said, "We have not yet filed a comment, but we plan to do so by the Nov. 1 deadline.  I can tell you that our comment will reflect our opposition to retroactive application."

I will be eager to see what DOJ has to say, because I have a hard time identifying a truly principled basis for resisting retroactive application of an amendment that the USSC has said is long overdue and that is supported by mountains of sound research and advocacy. 

Of course, because so many offenders have been subject to unduly harsh crack guidelines, the practical consequences of making the new guidelines retroactive would be significant.  But so would be the practical consequences of non-retroactivity — which might spark prison riots and surely would engender lots of litigation.  Moreover, it would be particularly sad if our national "Department of Justice" fear or resist too much justice for certain defendants simply because it may require a lot of extra paperwork.

Some related posts:

October 26, 2007 in Enron sentencing, Kimbrough reasonableness case, New USSC crack guidelines and report, Purposes of Punishment and Sentencing, Race, Class, and Gender, Scope of Imprisonment, Sentences Reconsidered, Who Sentences? | Permalink | Comments (7) | TrackBack

Sunday, September 09, 2007

Ernon appeal in the news

As detailed in this Houston Chronicle article, entitled "Enron's Skilling asks court to throw out all his convictions," the highest profile white-collar conviction is back in the news.  The WSJ Law Blog has more here on the looong opening appeal brief filed by Jeff Skilling's lawyers.  The sentencing arguments made to the Fifth Circuit start on page 206 of the 239-page brief.

I expect that it will take a while for the Government to respond, and thus it seem unlikely that oral argument will take place before 2008 and it surely could be a full year or more before Skilling's appellate claims are adjudicated.  Because he lost his plea for bail pending appeal, Skilling is serving time in prison while his arguments on appeal work their way through the courts.

September 9, 2007 in Enron sentencing | Permalink | Comments (1) | TrackBack

Tuesday, June 19, 2007

Another Enron defendant sentenced

As detailed in this AP article, a " key prosecution witnesses whose testimony helped convict former Enron CEO Jeffrey Skilling and company founder Kenneth Lay was sentenced Monday to 27 months in prison."  Here are more details:

It's been nearly three years since Kenneth Rice, 48, the former chief of Enron Corp.'s high-speed Internet unit, pleaded guilty to securities fraud and agreed to help federal prosecutors on other cases related to the energy giant's collapse.  His sentencing was postponed as he cooperated with prosecutors.

Rice becomes the ninth ex-Enron executive to receive a jail term after pleading guilty to crimes.  Before sentencing, Rice apologized for his role in the corporate scandal that wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans. "I'm sorry. I wasn't raised that way and I'm ashamed of that," he said, his voice breaking with emotion. "I'm committed to turning my life around."...

Assistant U.S. Attorney Ben Campbell said he was satisfied with the sentence.  He had noted to the court Rice's "candid testimony" in the trial of Skilling and Lay, who were convicted last year for their roles in the company's collapse.  In addition to that testimony, Rice was a key witness for eight days at the trial of five former colleagues at the Internet unit.  Rice also met 63 times with prosecutors.  One of Rice's attorneys, Dan Cogdell, said he had never seen such cooperation by a witness in his 25 years of practicing law.  He said Rice had unquestionably accepted responsibility for his role in the fraud and had cooperated with prosecutors since the start of their investigation.

June 19, 2007 in Enron sentencing | Permalink | Comments (1) | TrackBack

Monday, March 26, 2007

Justice Talking on the death penalty

The radio program Justice Talking, which is produced by the Annenberg Public Policy Center and distributed nationally by NPR, has this new program on the death penalty.  Here is the overview:

First used in Texas in 1982, lethal injection is the method of execution now authorized in 37 of the 38 states that have the death penalty. But the recent botched execution of Angel Nieves Diaz in Florida raises new questions of whether the method violates the Eighth Amendment's prohibition against cruel and unusual punishment.  Join us on this edition of Justice Talking as we take a new look at capital punishment and ask age-old questions about whether the death penalty is appropriate retribution for heinous crimes, whether it deters criminal activity and whether it can be administered in a fair and humane way.

March 26, 2007 in Enron sentencing | Permalink | Comments (1) | TrackBack