At the end of the massive Enron accounting scandal, the burden of serving hard time has fallen to former chief executive Jeffrey Skilling, who was sentenced to 24 years and four months in jail as he continued to maintain his innocence five years after the energy giant's historical collapse.Skilling, 52, also faces fines of $18 million, a lesser amount than the $100 million in reparations and fines sought by federal prosecutors. Lake also approved a payment of $45 million from Skilling to former employees who lost money in Enron's pension funds was also approved.
The sentence doled out by U.S. District Judge Sim Lake is by far the longest term received by any of the Enron defendants, was at the low end of federal sentencing guidelines, considering that the amount of the fraud the court linked to Skilling’s actions was estimated at $80 million.
Skilling was convicted in May on 19 counts of conspiracy and fraud -- most of those charges tied to the complex financial structures that Enron used to move debt off its balance sheet -- in a joint trial with former Enron chairman Ken Lay. The charges against Lay, who died in July, were dropped last week because he was unable to exhaust the appeals process before his death.
Lake denied a request for Skilling to remain free pending an appeal. Instead, the former Enron chief was placed under house arrest in Houston for the next few days until he is told to report to the Butner Correctional Facility in North Carolina. After already spending an estimated $30 million on his legal defense, Skilling has pledged to continue with the appeals process.
Skilling could trim his sentence by 54 days a year with good behavior and could erase a full year for participating in an inmate drug and alcohol treatment program, which the judge required.
Once the country's seventh-largest company with a market value of $68 billion, Enron's December 2001 bankruptcy filing wiped out more than $1 billion in retirement funds. Investors suing over the company's collapse have claimed that the energy giant's accounting fraud and earnings manipulations cost them upwards of $25 billion.
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