Jeffrey K. Skilling, Securities Fraud, Texas 2006

Former Enron Chief Executive Officer Jeffrey K. Skilling has been resentenced to 168 months in prison on conspiracy, securities fraud, and other charges related to the collapse of Enron Corporation.

In addition to the prison sentence, Skilling, 59, was ordered to forfeit approximately $42 million to be applied toward restitution for the victims of the fraud at Enron.

Skilling was found guilty in Houston on May 25, 2006, of one count of conspiracy, 12 counts of securities fraud, one count of insider trading, and five counts of making false statements to auditors.

A federal jury convicted Skilling of deceiving the investing public, the U.S. Securities and Exchange Commission, and others about the true performance of Enron’s businesses.

The scheme was designed to make it appear that Enron was growing at a healthy and predictable rate, consistent with analysts’ published expectations, that Enron did not have significant write-offs or debt and was worthy of an investment-grade credit rating, that Enron was comprised of a number of successful business units, and that the company had an appropriate cash flow.

This scheme had the effect of artificially inflating Enron’s stock price, which increased from approximately $30 per share in early 1998 to over $80 per share in January 2001, and artificially stemming the decline of the stock during the first three quarters of 2001.

The investigation into Enron’s collapse was conducted by the Enron Task Force, a team of federal prosecutors supervised by the Justice Department’s Criminal Division, and Special Agents from the FBI and IRS Criminal Investigation.

Skilling’s resentencing hearing was handled by Patrick Stokes, Albert Stieglitz, and Robert Heberle of the Criminal Division.

The original sentence of 292 months was vacated by the United States Court of Appeals for the Fifth Circuit in 2009, and Skilling was resentenced to 168 months in prison.

Skilling’s convictions stemmed from a scheme to deceive the investing public, the U.S. Securities and Exchange Commission, and others about the true performance of Enron’s businesses.

The scheme eventually unraveled and Enron filed for bankruptcy in December 2001, making its stock virtually worthless.

Skilling’s prison sentence will be followed by a period of supervised release, and he will be required to forfeit approximately $42 million to be applied toward restitution for the victims of the fraud at Enron.

The resentencing hearing was held on an unspecified date before U.S. District Judge Sim Lake at the U.S. District Court in Houston.

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