Feds
Want Skilling to Pay Nearly $183M
By KRISTEN
HAYS
August 12, 2006
HOUSTON (AP) - Federal prosecutors want former Enron Corp. CEO Jeffrey Skilling to turn over nearly $183 million for helping
perpetuate one of the biggest business frauds in U.S. history - his alleged
share and that of his late co-defendant, company founder Kenneth Lay.
The government had originally split that amount between the two former corporate
titans, who were convicted in May of charges including fraud and conspiracy at
the close of a four-month trial.
In late June, prosecutors asked U.S. District Judge Sim Lake to issue a money
judgment ordering Skilling to pay $139.3 million, and Lay $43.5 million in
proceeds the government contends they pocketed by conspiring to present an
optimistic picture of Enron's health when they knew it was an illusion propped
up by cooked books.
However, Lay died July 5 of heart disease. His lawyers have since filed court
papers noting their intention to ask Lake to wipe Lay's record clean because he
hadn't yet appealed his conviction or been sentenced. That would thwart the
government's bid for a money judgment against him, but his assets could remain
targets in civil litigation.
In a filing Friday, prosecutors responded to Skilling's opposition to the pricey
proposed judgment by asking Lake to require the ex-CEO to pony up the entire
$182.8 million.
Prosecutors said that with his conspiracy conviction, Skilling is ``liable for
all the proceeds attributable to all co-conspirators, indicted or unindicted,
including Lay,'' because they participated in the same scheme.
Lake has yet to rule.
In a money judgment, a judge sets an amount a defendant has to pay and the
defendant comes up with the cash through asset sales and other means. That
differs from a traditional forfeiture, which could involve seizure of cash as
well as assets directly tied to the defendant's crimes that the government later
sells.
Skilling was convicted of 19 of 28 counts of fraud, conspiracy, insider trading
and lying to auditors for his actions from 1999 through late summer 2001.
Jurors acquitted him of nine counts of insider trading that stemmed from stock
trades in 2000, but convicted him of a single insider trading count related to
his sale of half his Enron holdings three weeks after he abruptly resigned as
CEO in mid-August 2001.
Skilling insisted no fraud occurred at Enron and his optimism about the company
was genuine. He faces decades in prison upon his Oct. 23 sentencing, and aims to
appeal.
Enron, once the nation's seventh-largest company, went bankrupt in December 2001
amid revelations of hidden debt and inflated profits. Thousands of jobs and the
company's $60 billion market value evaporated.
Skilling's lead lawyer, Daniel Petrocelli, contends that only $12.5 million
could arguably be tied to crimes in a money judgment because the rest stems from
insider trading counts of which Skilling was acquitted. Similar issues should
shave a forfeiture of frozen cash and property to $4.1 million.
The government had already intended to seize about $60 million in Skilling's
cash and assets - including his $5.1 million mansion - that have been frozen
since the ex-CEO was indicted in February 2004. Prosecutors say those assets and
Skilling's $5 million bond can help pay the tab.
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