Tuesday, October 13, 2009

October 13, 2009

The Supreme Court will consider throwing out the convictions of former Enron Chief Executive Officer Jeff Skilling for his role in the collapse of the one-time energy giant.

The court said Tuesday it will hear Skilling's appeal of lower court rulings that upheld all 19 of his 2006 convictions of conspiracy, securities fraud, insider trading and lying to auditors involving the 2001 collapse of Enron.

Skilling, serving a 24-year prison term, is asking the court to consider whether the federal "honest services" fraud statute was applied correctly. The justices already have two other cases on their schedule dealing with the honest services law, a favorite tool of federal prosecutors in white-collar crime and public corruption cases.

The law has been criticized as vague and unfair because the government need not prove, in some instances, that a defendant personally benefited from the alleged fraud.

Skilling also questions whether he received a fair trial in Houston following Enron's collapse.

A ruling in his favor probably would result in a new trial.

In January, the 5th U.S. Circuit Court of Appeals in New Orleans upheld the convictions, but ordered Skilling's prison term reduced.

Skilling is the highest-ranking executive to be punished for the accounting tricks and shady business deals that led to the loss of thousands of jobs, more than $60 billion in Enron stock value and more than $2 billion in employee pension plans after the company imploded in 2001.

Company founder Kenneth Lay also was convicted of conspiracy, fraud and other charges, but his convictions were vacated after he died less than two months later of heart disease.

The case, to be argued next year, is Skilling v. U.S., 08-1394.

Also Tuesday, the court agreed to consider reinstating the sex trafficking and forced labor conviction of a man dubbed the "S&M Svengali."

The justices said they will hear an appeal filed by federal prosecutors in the case of Glenn Marcus, convicted after a sensational trial that dealt with mutilation and extreme humiliation.

Last year, the 2nd U.S. Circuit Court of Appeals ruled the conviction violated the Constitution because Marcus was convicted of a breaking a law, the 2000 Trafficking Victims Protection Act, that wasn't in place when some offenses happened.

In September 2007, Marcus was sentenced to nine years in prison for abusing a woman he photographed for his Web site, which reveled in sadomasochism. She was identified only as "Jodi."

FRONTLINE: Bigger Than Enron/PBS/Why the largest business scandal in American history is just the tip of the iceberg--and why investors should care.

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