Federal prosecutors plan to drop four, largely redundant felony fraud counts against former Enron President and CEO Jeffrey Skilling, according to a spokesman for the Justice Department.
The department's Enron Task Force is "streamlining its case" against Skilling to avoid the "redundancy" of charges, said Samantha Martin of the U.S. Attorney's Office in Boston, who is transferring to Houston to work with the task force. She noted that the task force plans to formally seek dismissal of the four fraud counts next week.
Excluding the four counts, Skilling is now expected to face a total of 31 felony counts when his trial gets under way in U.S. District Court in Houston later this month. The counts to be dismissed were for wire fraud related to the Raptor transaction. Even with fewer counts against him, however, the government's case against Skilling remains largely the same.
Skilling is charged in a wide-ranging scheme to defraud regulators and investors while he was employed at Enron, the seventh largest corporation in the United States before its demise in December 2001. He also is accused of manipulating Enron's reserves through off-balance sheet transactions, and with reaping personal gains through illegal insider trading of Enron's stock.
Between 1998 and 2001 when Skilling left Enron, he is reported to have received approximately $200 million from the sale of Enron stock options and restricted stock, netting more than $89 million in profit, and was paid more than $14 million in salary and bonuses, according to the superseding indictment against Skilling.
The same four felony counts had been brought against Enron former top accountant Rick Causey, who reached a deal with prosecutors in December (seven years in prison and the forfeiture of $1.25 million) in exchange for testifying against Skilling and Enron founder Kenneth Lay at their trial. The sentence may be reduced to five years if the government considers Causey's cooperation in the Skilling and Lay trial to be substantive. Causey was to have been tried along with Skilling and Lay.
The revised indictment was attached to a motion for "emergency relief" filed by Skilling and Lay Thursday in which they asked federal prosecutors to be more specific about the "transactions, statements and charges against them." The two men also requested at least a one-week delay in the start of the trial so that they could review the revised indictment and prepare for trial. No charges were dropped against Lay.
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