By Carrie Johnson Washington Post Staff Writer Thursday, May 25, 2006; 2:24 PM
HOUSTON, May 25 -- A federal jury today convicted former Enron chairman Kenneth L. Lay of each of the six counts with which he was charged and convicted his protege Jeffrey K. Skilling of 19 of 28 counts, holding the top executives accountable for fraud on their watch.
The jury returned to the courtroom after deliberating for fewer than six days over a trial that took almost four months, avoiding eye contact with the two defendants and their families. After the verdicts were read, U.S. District Judge Simeon T. Lake III also found Lay guilty in a separate case of four counts of bank fraud.
Lake set sentencing for both men for Sept. 11.
As the verdict was read, Lay stood in the front of the courtroom near a bench he had occupied along with his wife, Linda, and daughter, Elizabeth Vittor, both of whom began to weep. Other family members sat in the front row among the spectators in the courtroom.
Skilling was impassive. He held his hands pressed together in front of him. After the verdict, he exchanged words with brother, Mark, and his defense attorney, Daniel Petrocelli. Skilling was the first man out of the courtroom, immediately after the judge left the bench.
After the verdict, Lake said that Lay would be required to relinquish his passport and he set a bond hearing for later in the afternoon for Lay. Skilling is already free on a $5 million bond.
Skilling and Petrocelli appeared at microphones set up on the courthouse steps just minutes after the verdict was read, saying they would offer a "full and vigorous" appeal.
"We have just begun to fight," he said, standing beside his client who appeared composed as he thanked his family, his lawyers and the news media for their conduct during the trial.
Skilling, 52, and Lay, 64, once stood near the pinnacle of American business, as the energy trading powerhouse they created out of a stodgy pipeline company grew to become the nation's seventh largest public company. But their fortunes collapsed in a heap along with the business in December 2001.
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Posted by Lee (Member # 393) on :
September 11th? So their no-doubt-pitiful sentences at some golf prison will get pushed from the news by Bush's I Let Thousands Of People Die, Special Fifth Anniversary Edition, schtick?
Posted by TSN (Member # 31) on :
"After the verdict, Lake said that Lay would be required to relinquish his passport and he set a bond hearing for later in the afternoon for Lay. Skilling is already free on a $5 million bond."
So, they've been convicted of stealing people's money, but they still get to use that money to keep themselves out of jail. Hm...
Posted by Cartman (Member # 256) on :
"Skilling is already free on a $5 million bond."
Sentences? What sentences?
Posted by Shik (Member # 343) on :
I highly doubt he posted all $5 million of that bond himself, Lee. The standard is you pay 10% of the bail, which is still half a million. If he was able to get the rarer 3% bail bond, that's still $150,000 he had to put up.
Posted by TSN (Member # 31) on :
I commented on the bail, not Lee. And regardless of how much he had to pay, the fact remains that it isn't his money.
Posted by Jason Abbadon (Member # 882) on :
Nothing like a 64 year old millionaire crook that will appeal his case (while remaining free) for another three to ten years...
Pleanty of time to divert any money to offshore acounts or family members as "gifts".
No investor going to get any of their money back.
The 9/11 sentence date is pretty odd- I agree with Lee that any sentence will be afootnote in the day's coverage of flag-waving, speach-making, self-aggrandizing political fuckery and the endless documentaries that get less critical of the lack of prevention on both Clinton and Bush administrations with each passing year.
Posted by Veers (Member # 661) on :
Well, considering that coverage of 9/11 in 2004 was very limited, and that last year Hurricane Katrina was the top news story at that time, I think we're all overestimating the power of the anniversary. What new thing could the media say about 9/11? In terms of a "scoop," the Enron sentences would be far more valuable and barring some unforseen event, WILL likely be the top story.
Posted by Ritten (Member # 417) on :
Only if another storm happens, disturbing millions of lives and the oil again.
Posted by Jason Abbadon (Member # 882) on :
It's an important election year: expect the full range of 9/11 scre tactics from the Republicans as they try to scare the populace into voting for them in spite of corruptin, scandal and being completely out of touch with the adverage American.
Worked against Kerry, at any rate.
Posted by WizArtist II (Member # 1425) on :
I think General Thade had the right idea...
"Kill them.....ALL"
Posted by Jay the Obscure (Member # 19) on :
quote:Originally posted by TSN: I commented on the bail, not Lee. And regardless of how much he had to pay, the fact remains that it isn't his money.
It seems you've missed a key paragraph. Allow me to post it:
quote:Now the two men, who together invested close to $70 million in their defense, face the possibility of spending the rest of their lives in prison and living in history as the ringleaders of a fraud at a company whose name became synonymous with accounting tricks and rule-breaking.
Posted by TSN (Member # 31) on :
It seems you've missed my entire point. This situation is like a bank robber who gets caught, then reaches into his big bag with a dollar sign on it full of the money he just stole and paying his bail.
The first thing that should have happened when they were charged with fraud is that all of their assets should have been frozen. Then they should have been assigned a public defender, just like any other person who doesn't have any money of their own to spend on defense.
[ May 26, 2006, 07:08 PM: Message edited by: TSN ]
Posted by Jay the Obscure (Member # 19) on :
I got your point. I just thought that in light of such a point you'd like to see just how much pilfered money they used.
Posted by Jay the Obscure (Member # 19) on :
$70 million is quite a bit of pilfered money to send on criminal defense.
Then again, if one stole it in the first place, it's really not so much.
Posted by bX (Member # 419) on :
A drop in the bucket because actually, they are using mark-to-market fraud and so the valuation of their thievery was based on monies they could accumulate in the future...
Posted by Jason Abbadon (Member # 882) on :
As I understand it, the crux of the problem is this: There is a lack of precedent in prosecuting a case like this- it's NOT a straight forward matter of they "stole" from investors as such, because no investors had their accounts violated- It's "Fraud" because Lay and co misrepresented the company's financial status as a means to make money for themselves as the company was going down in flames. The by-product was that this misrepresentation led to a false sense of security among the investors (and the good numbers led additional people to invest in the house of cards).
In the past, this happened all the time and had actually saved companies from bankruptcy as new investor capital (temporarly) re-inforces the house of cards untill loans or additional investors can strengthen the company again. Welcome to the airline insustry in the 1980's. (notice that Delta's finally bankrupt now- probably not a coincidence).
As to the indea of seizing their assetts- it's also not that simple. If you're accused of robbing a bank, the judge can freeze any money proven to belong to the bank, or that you would not have had access to- In Lay's case, we dont know how much money he was worth prior to Enron's tailspin and it would be logistically impossible to seperate all his personal worth from the company he founded.
Also, freezing all his assetts would lead to an instant appeal on grounds he could not adequately defend himself from the dozens of lawyers and econemists the prosecution has with an appointed attorney.
(shrug)
There will be the inevitible civil suit, but it's both unwinable and pointless. Unwinable because investors take an inherent risk in investing and pointless because the money will either be squirreled away or pissed away on legal fees by the time any judgment is made in a civil or class action case.
And a class action can be ignored indefinitely if you're rich and have connections: just look at thte Tobacco and Big Sugar class actions- ignored for years and the overturned completely by Republican politicians. if people with lung cancer or poisoned by everglades pollution cant get money, dont think an investor is likely to see anything either.
Posted by TSN (Member # 31) on :
"Also, freezing all his assetts would lead to an instant appeal on grounds he could not adequately defend himself from the dozens of lawyers and econemists the prosecution has with an appointed attorney."
If that were true, then every person ever defended by a public defender could make the same claim. Just because one can (ostensibly) afford an expensive attorney does not mean one has the inalienable right to such. To claim an inadequate defense, I'm pretty sure you have to prove your lawyer did something wrong. Not just "he wasn't good enough because he was cheap".
[ May 26, 2006, 10:02 PM: Message edited by: TSN ]
Posted by Jason Abbadon (Member # 882) on :
I'd agree in most cases, but in this particular case, the appointed counsel would need to be versed in far more than criminal defense and would need a knowledge of both corperate accounting practices and investor risk and stock market in order to counter the prosecution's experts. Many of whom are likely paid for their expertise.
How many attorneys from the defense pool do you suppose fit those qualifications? An appeal does not need to be based on a lawyer making a mistake- many appels have been made on a lack of experience on state-provided counsel.
It sucks, but it's a fact- if the state wants to throw everything they've got at you, particularly in a case where the media had swayed the opinion of any potential jury in the prosecution's favor, a state-appointed defense is unlikely to be able to mount an adequate or qualified response.
It's not a right to an expensive attorney- only a qualified one- the goal is to set the defense on equal ground as the prosecution.
But, on the grounds you cited, a state Supreme Court could uphold the verdict regardless of the ability )or lack therteof) on the defense's part.
All this aside, the state had a very clear case with strong public support against Ley and would not want any perception of inpropriety to creep in, Better to allow a strong, competant defense, so that when the guilty verdict was reached, there is no doubt that due process was upheld.
Posted by Jay the Obscure (Member # 19) on :
The recently convicted former Enron chairman Kenneth L. Lay, 64, died early today in Aspen, Colo., a family spokeswoman and the sheriff's office said. Lay, convicted of fraud and conspiracy for his part in the Houston-based energy company's collapse, had faced the possibility of life in prison at his sentencing scheduled for October.
Family spokeswoman Kelly Kimberly said Lay died of a heart attack. A statement from the Pitkin County Sheriff's Office said deputies and an ambulance were sent to Lay's vacation home in Old Snowmass near Aspen at 1:41 a.m. for "a medical emergency."
"Mr. Lay was transported to Aspen Valley Hospital where he was pronounced dead at 3:11 a.m.," the statement said. "A coroner's autopsy is pending." The statement said the autopsy results will be available later this week.
"The Lays have a very large family with whom they need to communicate, and out of respect for the family, we will release further details at a later time," a statement from the Lay family said.
On Friday, federal prosecutors asked a judge to order Lay and former Enron executive Jeffrey K. Skilling to turn over $182.2 million in assets, arguing that their homes and other assets were acquired by fraud.
In May, a federal jury convicted Lay of each of the half-dozen counts with which he was charged and found his prot?g? Skilling guilty of 19 more, pinning them with the responsibility for one of the era's biggest and most damaging business frauds. The two men were ordered to return to court for sentencing on Oct. 23.
Posted by MinutiaeMan (Member # 444) on :
Anyone else suspect either suicide or foul play?
Posted by Jason Abbadon (Member # 882) on :
quote:On Friday, federal prosecutors asked a judge to order Lay and former Enron executive Jeffrey K. Skilling to turn over $182.2 million in assets, arguing that their homes and other assets were acquired by fraud.
I can see this case quietly disapearing...
Firstly, it's tough to prove anything (or much anyway) was result of fraud- Lay was only convicted of fraud as Enron did it's tailspin, and most of that stuff was aquired looong before that. Second, without Lay himself to enbody the greedy executive, cameras will focus on his grieving family, who almost certainly knew nothing about any fraudulant activity.
Just my own prediction mind you- not that a total victory for the state would give anything back to the poor saps that lost all their money on Enron stock. Only the inevitible civil/class action suit can do that.