The U.S. Supreme Court on Monday rejected without comment former Enron Corp. CEO Jeffrey Skilling’s appeal to overturn his 19 convictions for fraud.
Two years ago the high court ruled that federal prosecutors had used an improper legal theory to convict Skilling in 2006, saying Skilling couldn’t be convicted under a federal statute outlawing fraudulent schemes to withhold “honest services” (see Daily GPI, June 25, 2010). The law, said the justices, could be used only in cases involving bribery or kickbacks, which were not an issue in the Enron case (Skilling v United States, 11-674).
Although the Supreme Court invalidated the prosecution’s honest services theory, the U.S. Court of Appeals for the Fifth Circuit in New Orleans last year found the federal government’s evidence of conspiracy sufficient to uphold his convictions (see Daily GPI, April 8, 2011). The Fifth Circuit said the verdict would have been the same because there was “overwhelming evidence that Skilling conspired to commit securities fraud and thus we conclude beyond a reasonable doubt that the verdict would have been the same absent the alternative-theory error.”
The Fifth Circuit also ruled that Skilling must be resentenced because it found that the U.S. District Court in Houston, where Skilling originally was tried and convicted, incorrectly applied a “sentencing enhancement for substantially jeopardizing a financial institution.”
Skilling is serving a 24-year sentence in a Colorado federal prison after he and former Enron founder and chairman Kenneth Lay were found guilty of deceiving investors about Enron’s true financial condition. Lay died in July 2006, shortly after the trial concluded.
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