Thursday, January 5, 2006
Former Dynegy Corp. executives
Bill Gene Foster and Helen Sharkey, who entered guilty pleas and testified against Jamie Olis, another executive at the company, received sentences well below the government's recommendation for their part in an accounting fraud. The three were involved in a program called Project Alpha that inflated Dynegy's earnings by $300 million. The government recommended a 30-month sentence for Foster and 18 months for Sharkey, but U.S. District Judge Sim Lake sentenced them to 15 months and 1 month, respectively. Olis, who fought the charges but was convicted, originally received a 24-year sentence that was later reversed by the Fifth Circuit because of an improper calculation of the loss attributable to the criminal conduct. Olis' sentencing hearing has been delayed until late January to permit the judge to consider the loss issue, which will be the primary determinant of the sentence. As Doug Berman points out in a post on the Sentencing Law & Policy blog (here), the lower sentences for Foster and Sharkey bode well for Olis because the government is seeking a 15-year sentence for him, but the court does not appear to be as receptive to the sentencing recommendations of the prosecutor.
Sharkey's sentence may be something of an aberration because she recently gave birth to twins. The 15-month sentence for Sharkey, who was senior to Olis at Dynegy, may indicate at least a floor on Olis' sentence, and it would not surprise me to see a sentence in the 36 to 54 month range. The defense has submitted information that argues for a loss of zero, while the government argues for a loss calculation of between $20 and $50 million. After Booker, sentencing has become much more of a guessing game, particularly in white collar crime cases where the amount of the loss is subject to such widely divergent claims. A Houston Chronicle story (here) discusses the sentencings. (ph)