The legal questions concerning the estate of Enron Corp. founder Kenneth Lay remain unanswered, but the court wranglings for and against ex-CEO Jeffrey Skilling and others involved in alleged misdeeds at the company continued this week in Houston.
Among other things, the government has filed documents arguing against a motion filed last month by Skilling’s defense team. In the request, Skilling asked for a new trial and the right to interview jurors who convicted him in May (see Daily GPI, June 23). The government noted that Skilling’s request to have his conviction tossed was not filed within seven business days of the conviction, as required by law. Lay was given an extension to make a filing, but Skilling was not included in that extension, prosecutors noted.
In his request for a new trial, Skilling said he had been misled by the government about how it would use the infamous “Global Galactic” agreement in his trial (see Daily GPI, March 10). The three-page handwritten document, purportedly between Skilling and ex-CFO Andrew Fastow, was considered a key piece of evidence against Skilling, listing assets sold by Enron to LJM, one of the company’s special purpose entities run by Fastow, which allowed Enron to remove poorly performing assets from its balance sheet.
In his filing, Skilling said he would have had the document forensically examined for authenticity if he had known it would be used against him in court. Prosecutors countered in their filing that Skilling knew the original document was not used, so a forensic examination would not have mattered.
Regarding his desire to interview jurors, the government said Skilling could only do so if it was proved that the jurors considered “extraneous evidence” or had “outside influence” when reaching their guilty verdicts. Skilling’s motion claimed no such information, said the prosecutors, and was merely a “fishing expedition.”
Prosecutors also objected to a request by former Enron Broadband Services (EBS) executive Kevin Howard for a new trial.
Howard was convicted in May on one count of conspiracy, three counts of wire fraud and one count of falsifying books and records for his role in a scheme to mislead investors about EBS finances. Another former EBS executive, Michael Krautz, was acquitted on the same five charges (see Daily GPI, June 1). Following the trial, some of the jurors in the case complained they were pressured by other panel members to convict Howard and acquit Krautz.
Howard’s lawyers, two of the jurors and two of the alternate jurors said in signed letters there was a “vindictive” atmosphere created by the trial of Skilling and Lay. The EBS trial was held during the same period in the same Houston courthouse. One alternate juror wrote that she felt that the jury had a goal to “fry” Enron’s upper management.
In a court filing, Assistant U.S. Attorney Van Vincent said the charges of vote-swapping and outside influence were incorrect.
“There is no reason to assume that Howard’s jury concluded that the issues in the Lay/Skilling case had any bearing on Howard’s case,” wrote Vincent. “If the jury had believed that the convictions of Lay and Skilling had any bearing on the guilt of Howard, it would not have acquitted Krautz.”
Howard also requested his sentencing, set for Sept. 11, be delayed. Prosecutors said they would not oppose a new date.
In related news, Fastow’s legal team and the government have requested that his sentence be postponed until at least Sept. 25. Fastow is to be sentenced to up to 10 years in prison on Aug. 28 under a plea deal he worked out with the government. Fastow testified against Lay and Skilling earlier this year.
Government prosecutor John Hueston will be out of the country on Aug. 28, and the legal teams said late September would be the earliest time they would both be available. Both legal teams also asked that if a “victim hearing” is held for Fastow, in which victims of Enron’s collapse are allowed to testify about its impact, that it be held on the morning of the sentencing.
Finally, three British men were to be charged in Houston on Friday after being extradited to the United States from Great Britain on Thursday. David Bermingham Giles Darby and Gary Mulgrew face wire fraud charges for allegedly stealing $7.3 million from their former employer, Royal Bank of Scotland Group plc’s Greenwich NatWest Unit.
The trio, who were the first to be criminally indicted in the Enron case, allegedly benefited through the sale of “Swap Sub,” one of Enron’s special purpose entities (SPE) put together by Fastow (see Daily GPI, July 1, 2002). The three men have denied the allegations, and they had sought to have their case heard in Great Britain rather than the United States. No charges have been filed against them in Great Britain.
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