Enron’s Skilling Rejected by Top U.S. Court on Conviction

The U.S. Supreme Court left intact Jeffrey Skilling’s conviction for leading the Enron Corp. accounting fraud, refusing to grant a second hearing to the imprisoned former chief executive officer.

Today’s rebuff leaves Skilling with nothing to show for his victory at the Supreme Court in 2010, when the justices said prosecutors used an improper legal theory to convict him. A federal appeals court then reaffirmed his 19-count conviction, saying the verdict would have been the same regardless.

Skilling is serving a 24-year sentence in a federal prison in Colorado after he and former Enron Chairman Kenneth Lay were found guilty of deceiving investors about the company’s true financial condition. Lay died in 2006.

The accounting fraud caused Enron, once the world’s largest energy trading company, to file for bankruptcy in 2001, wiping out more than 5,000 jobs and $60 billion in shareholder value.

The 2010 Supreme Court ruling said Skilling couldn’t be convicted under a federal statute outlawing fraudulent schemes to withhold “honest services.” The high court said that law could be used only in cases involving bribery or kickbacks, which weren’t at issue in the Enron case.

The honest-services law had come into play on Skilling’s conviction on one charge of conspiracy. The jury didn’t spell out whether he had conspired to commit honest-services fraud or to commit securities fraud.

In its ruling last year, the New Orleans-based appeals court said there was “overwhelming evidence that Skilling conspired to commit securities fraud.”

Skilling’s sentence might be adjusted because the appeals court concluded in an earlier opinion that the trial judge overseeing the case erred on one issue.

The case is Skilling v. United States, 11-674.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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