It was the heaviest sentence handed down to any of the top Enron executives brought to trial so far for their roles in the scandal, one of the biggest in US history and synonymous with an era of unbridled corporate greed.
By JASMINA KELEMEN, MARKETWATCHjeff skilling 88(photo credit: )MarketWatch: In-depth global business coverage
A federal judge sentenced former Enron Chief Executive Jeffrey Skilling to 24 years and four months in prison Monday for his corporate crimes, ignoring his defense team's pleas for a lighter sentence.
It was the heaviest sentence handed down to any of the top Enron executives brought to trial so far for their roles in the scandal, one of the biggest in US history and synonymous with an era of unbridled corporate greed.
Judge Sim Lake also ordered Skilling to forfeit $45 million of illegal gains during his time at Enron, a move that federal prosecutor Sean Berkowitz said leaves Skilling "with virtually no assets."
Skilling's laywers, led by Daniel Petrocelli, immediately filed an appeal, starting a process that can last months.
Meanwhile, Skilling will wear an electronic ankle monitor and be kept under house arrest until further notice.
Lake also told Skilling to enroll in drug and alcohol rehabilitation programs and recommended that he eventually serve his time, if or when it comes that, at the federal penitentiary at Butner, N.C., near Durham, a medium-security facility with its own rehabilitation programs.
Since Enron's collapse, Skilling has had a couple of run-ins with the law for drunken and disorderly behavior.
Skilling, 52, who stood trial in Houston with former Enron founder Kenneth Lay, was found guilty on May 25 on 19 counts of fraud, conspiracy and insider trading. Together, the counts carried a maximum sentence of 30 years.
Skilling worked at Enron for 11 years, culminating in his promotion to chief executive in February 2001, a job he abruptly quit six months later amid a plunging share price and deepening concerns that the company was hiding its fast-deteriorating finances in a web of off-book accounting schemes.
All told, Skilling sold about $62m. worth of company stock over the year leading up to Enron's headlong plunge into Chapter 11 bankruptcy on Dec. 2, 2001.
Lay, who groomed Skilling for the corner office as they turned an obscure Southwest pipeline company into the world's biggest energy trading house, was convicted by the same jury of conspiracy and fraud. The conviction was voided after Lay died of a heart attack in July, little more than a month after he was found guilty of all 10 counts against him.
Prior to sentencing, Skilling and his team listened to several victims of Enron's collapse talk about the pain and hardship they had suffered.
Most of them were former employees who later told reporters they were pleased with the stiff sentence Skilling received but disappointed that he was not hauled straight to prison.
One person who spoke was not an employee, but a self-described small investor. Brian Durbin testified that while he lost only a small amount of money in the Enron debacle, it was his only loss "attributed to outright theft."
The bankruptcy wiped out about $68 billion in market capital, measured from Enron's $80 peak share price in early 2001. It also left about 9,000 employees without jobs, erasing retirement savings built mostly on Enron stock.
In contrast to others convicted of crimes at Enron, Skilling refused to cooperate with federal investigators or admit to any wrongdoing. He insisted throughout the trial he was an innocent man unaware of the magnitude of accounting deceptions stitched together by former Chief Financial Officer Andrew Fastow.
Both Skilling and Lay insisted that Fastow, who last month was sentenced to six years in prison for his misdeeds, was the real culprit behind the company's downfall as he spun elaborate accounting schemes to hide the trading house's mounting debt.
Attempts by the two former executives to point the blame elsewhere did not sit well with the Houston jury that convicted the pair, saying it was simply not credible that the two men charged with running the company could be so easily duped.
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