Trial of Kenneth Lay and Jeffrey Skilling

Last updated

The trial of Kenneth Lay, former chairman and CEO of Enron, and Jeffrey Skilling, former CEO and COO, was presided over by federal district court Judge Sim Lake in the Southern District of Texas in 2006 in response to the Enron scandal.

Contents

Timeline

Witnesses

(see U.S. DOJ list)

In order of appearance:

Lawyers

Outcome

The jury rendered its verdict on May 25, 2006. Sentencing took place on October 23, 2006.

In a separate bench trial, Judge Sim Lake ruled that Lay was guilty of four counts of fraud and false statements. These counts were also vacated because of Lay's death. [2]

Related Research Articles

Andrew Stuart Fastow is an American convicted felon and former financier who was the chief financial officer of Enron Corporation, an energy trading company based in Houston, Texas, until he was fired shortly before the company declared bankruptcy. Fastow was one of the key figures behind the complex web of off-balance-sheet special purpose entities used to conceal Enron's massive losses in their quarterly balance sheets. By unlawfully maintaining personal stakes in these ostensibly independent ghost-entities, he was able to defraud Enron out of tens of millions of dollars.

A vacated judgment legally voids a previous legal judgment. A vacated judgment is usually the result of the judgment of an appellate court, which overturns, reverses, or sets aside the judgment of a lower court. An appellate court may also vacate its own decisions. Rules of procedure may allow vacatur either at the request of a party or sua sponte.

<span class="mw-page-title-main">Jeffrey Skilling</span> American businessman and felon (born 1953)

Jeffrey Keith Skilling is an American businessman who in 2006 was convicted of federal felony charges relating the Enron scandal. Skilling, who was CEO of Enron during the company's collapse, was eventually sentenced to 24 years in prison, of which he served 12 after multiple appeals.

Richard Marin Scrushy is an American businessman and convicted felon. He is the founder of HealthSouth Corporation, a global healthcare company based in Birmingham, Alabama. In 2004, following an investigation by the Federal Bureau of Investigation (FBI), Scrushy was criminally charged by the U.S. Securities and Exchange Commission (SEC). Scrushy was charged with 36 of the original 85 counts but was acquitted of all charges on June 28, 2005, after a jury trial in Birmingham.

"The idiot defense" is a satirical term for a legal strategy where a defendant claims innocence by virtue of having been ignorant of facts of which the defendant would normally be expected to be aware. Other terms used for this tactic include "dumb CEO defense", "dummy defense", "ostrich defense", "Ken Lay defense", and "Sergeant Schultz defense". The first known instance of the idiot defense was by John Henry Stafford, a lawyer in Jackson, Tennessee who was also known as Yankee John. He used it in the defense of Marlin Heady, a moonshiner. The charges were all, allegedly, dropped.

David Wittig is the former chief executive officer of Topeka, Kansas-based Westar Energy, a utility company.

Joseph P. Nacchio is an American executive who was chairman of the board and chief executive officer of Qwest Communications International from 1997 to 2002. Nacchio was convicted of insider trading during his time heading Qwest. He claimed in court, with documentation, that his was the only company to demand legal authority for surreptitious mass surveillance demanded by the NSA which began prior to the 11 September 2001 attacks.

Simeon Timothy Lake III is a senior United States district judge of the United States District Court for the Southern District of Texas. His notable trials include the trial of Enron Chairman Ken Lay and former Chief Executive Officer Jeff Skilling.

<span class="mw-page-title-main">Kenneth Lay</span> Founder of Enron Corporation (1942–2006)

Kenneth Lee Lay was an American businessman who was the founder, chief executive officer and chairman of Enron. He was heavily involved in Enron's accounting scandal that unraveled in 2001 into the largest bankruptcy ever to that date. Lay was indicted by a grand jury and was found guilty of 10 counts of securities fraud at trial. Lay died in July 2006 while vacationing in his house near Aspen, Colorado, three months before his scheduled sentencing. A preliminary autopsy reported Lay died of a heart attack caused by coronary artery disease. His death resulted in a vacated judgment. Conspiracy theories regarding Lay's death surfaced, alleging that it was faked.

The Alaska political corruption probe refers to a 2003 to 2010 widespread investigation by the Public Integrity Section of the U.S. Department of Justice, the Federal Bureau of Investigation, and the Internal Revenue Service into political corruption of nine then-current or former Alaskan state lawmakers, as well as Republican US Representative Don Young and then-US Senator, Republican Ted Stevens. Sometimes referred to as "The Corrupt Bastards Club" or the "Operation Polar Pen", the investigation focused on the oil industry, fisheries and for-profit prison industries.

<span class="mw-page-title-main">Enron scandal</span> 2001 accounting scandal of American energy company Enron

The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas. When news of widespread fraud within the company became public in October 2001, the company declared bankruptcy and its accounting firm, Arthur Andersen – then one of the five largest audit and accountancy partnerships in the world – was effectively dissolved. In addition to being the largest bankruptcy reorganization in U.S. history at that time, Enron was cited as the biggest audit failure.

The Double Jeopardy Clause of the Fifth Amendment to the United States Constitution provides: "[N]or shall any person be subject for the same offence to be twice put in jeopardy of life or limb..." The four essential protections included are prohibitions against, for the same offense:

Black v. United States, 561 U.S. 465 (2010), is a white-collar criminal law case decided by the United States Supreme Court dealing with businessman Conrad Black's fraud trial. Along with two companion cases—Skilling v. United States and Weyhrauch v. United States—it dealt with the honest services provision, 18 U.S.C. § 1346.

<span class="mw-page-title-main">Honest services fraud</span> Crime in the United States

Honest services fraud is a crime defined in 18 U.S.C. § 1346, added by the United States Congress in 1988, which states "For the purposes of this chapter, the term scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."

Daniel M. Petrocelli is a partner at O’Melveny & Myers LLP and the Chair of the firm’s Trial Practice Committee. Petrocelli is known in part for his work in a 1997 wrongful death civil suit against O. J. Simpson, for representing Enron CEO Jeffrey Skilling, and for his leading role in defeating the US Department of Justice’s attempt to block the merger of AT&T and Time Warner.

Ewing Werlein Jr. is a senior United States district judge of the United States District Court for the Southern District of Texas.

McDonnell v. United States, 579 U.S. 550 (2016), was a United States Supreme Court case concerning the appeal of former Virginia Governor Robert F. McDonnell's conviction for honest services fraud and Hobbs Act extortion. At issue on appeal was whether the definition of "official act" within the federal bribery statutes encompassed the actions for which McDonnell had been convicted and whether the jury had been properly instructed on this definition at trial.

<i>United States v. Elizabeth A. Holmes, et al.</i> Criminal fraud case

United States v. Elizabeth A. Holmes, et al., was a United States federal criminal fraud case against the founder of now-defunct corporation Theranos, Elizabeth Holmes, and its former president and COO, Ramesh Balwani. The case alleged that Holmes and Balwani perpetrated multi-million dollar wire-fraud schemes against investors and patients. Holmes and Balwani each had their own jury trial.

References

  1. "Lawyers deny Enron cooked books". East Bay Times. February 1, 2006. Retrieved October 19, 2023.
  2. 1 2 Pasha, Shaheen; Seid, Jessica (May 25, 2006). "Lay and Skilling's day of reckoning: Enron ex-CEO and founder convicted on fraud and conspiracy charges; sentencing slated for September". CNNMoney.com.
  3. "Prosecution witness: Enron dipped into reserves to drive up earnings". Houston Business Journal. February 27, 2006.
  4. "SEC Charges Former Chief Executive Officer of Enron North America and Enron Energy Services with Violating Federal Securities Laws". October 30, 2003.
  5. Lozano, Juan (October 23, 2006). "Skilling Sentenced to 24 Years in Prison". AP via CBS News.
  6. Lozano, Juan (January 7, 2009). "U.S. Court Orders Skilling Resentenced". AP via Washington Post. Retrieved March 18, 2009.
  7. "U.S. appeals court upholds Jeff Skilling conviction". Reuters. April 6, 2011. Retrieved June 13, 2011.
  8. Fowler, Tom (October 17, 2006). "Judge vacates conviction of Ken Lay". Associated Press. Retrieved March 2, 2010.