Thursday, October 12, 2006

Skilling Takes Another Shot at Overturning the Guilty Verdict

Former Enron CEO Jeffrey Skilling filed another motion seeking to overturn his conviction, relying on the Fifth Circuit's recent decision that threw out the mail fraud convictions of three defendants in the Enron Nigerian Barge trial.  In U.S. v. Brown (here), the Fifth Circuit held that the government's "right of honest services" theory for mail fraud did not apply because the defendants believed they were working in the company's best interests when they engaged in the transaction designed to inflate Enron's earnings.  In the Lay/Skilling, the government referenced the right of honest services as one theory of fraud, although the main feature of the government's case was the improper disclosure and omission of important information and not the structure of any particular deal.  Nevertheless, the mention of honest services raises a question about the verdict.  The Enron Task Force has asked for en banc review of Brown, and it is unlikely that U.S. District Judge Sim Lake will overturn the entire verdict against Skilling on this basis, even if he were inclined to grant the motion as to some counts.  If Judge Lake denies the request, then the motion preserves the issue for appeal, which may be the ultimate goal behind the filing.  The motion also seeks to have the court grant bail pending the appeal, which has been done for a number of high-profile white collar criminal defendants after their conviction, including Bernie Ebbers, John Rigas, Frank Quattrone, and Martha Stewart.  A Houston Chronicle story (here) discusses Skilling's motion. (ph)

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