The Houston Chronicle reports here that former Enron CEO Jeff Skilling has asked the full Fifth Circuit to review the panel decision, authored by Ed Prado, affirming his convictions. The main thrust of the motion apparently pertains to the honest services fraud question, with Skilling claiming that the panel strayed from recent Fifth circuit precedent.
You are currently browsing the archive for the Enron category.
Judge Ed Prado’s 104 page opinion affirms the guilty verdicts in toto. The case is remanded for re-sentencing, however, in light of an improper enhancement for substantially jeopardizing a financial institution. Jerry Smith and District Judge Alia Ludlum (sitting by designation) rounded out the panel.
Bloomberg reports that former NatWest investment banker David Bermingham was flown to the UK on November 21 to finish serving his 37 month prison sentence for wire fraud in connection with a scheme devised by former Enron CFO Andrew Fastow. Bermingham entered prison in May. All three bankers were cleared to return on November 6 (earlier). In the UK, unlike in the US federal system, Bermingham will automatically be eligible for parole after serving half his sentence.
The US Supreme Court on Friday agreed to hear the appeal of former Enron Broadband Division strategic planning executive Scott Yeager, who is fighting a retrial on insider trading charges. Yeager’s retrial on 13 onsider trading and money laundering counts had been scheduled for next March before US District Judge Vanessa Gilmore in Houston, but the Supreme Court is not expected to hear arguments before February or March. Yeager was acquitted in 2005 on conspiracy and fraud counts but jurors were hung on insider trading and money laundering counts. The essence of his appeal is that he couldn’t have engaged in insider trading and money laundering since he’s not guilty of participating in the alleged conspiracy and fraud. In March, a three-judge panel of the Fifth Circuit ruled that Gilmore was correct in refusing to dismiss the counts.
The Court’s list of accepted cases didn’t include the appeal of Yeager’s co-defendant Rex Shelby, former broadband divison software executive. Shelby’s attorney held out hope that he won’t be on Monday’s rejected list. His retrial is scheduled for January. A third co-defendant, Joseph Hirko, pleaded guilty last month to one count of wire fraud and sgreed to serve a sentence of 12 to 16 months in prison (Houston Chronicle).
David Bermingham, Giles Darby and Gary Mulgrew, three British investment bankers known as the NatWest Three, will now be able to leave for the UK to serve the remainder of their 37 month prison sentences. On Thursday, the three men appeared before US Magistrate Judge Frank Maas in New York, who approved the transfers. The former Greenwich NatWest bankers were indicted on seven counts of wire fraud in 2002 in connection with a scheme devised by former Enron CFO Andrew Fastow and his right-hand man Michael Kopper. They pleaded guilty in 2007 to one count of wire fraud and were sentenced to 37 months in prison plus a total of $7.3 million in restitution by US District Judge Ewing Werlein in Houston on February 22, 2008 (earlier). Their plea agreements allowed a transfer to the UK after several months, where they will be eligible for parole after serving half their sentences. Each has already served about six months (Bloomberg).
Former Enron CEO Jeff Skilling has been moved from the low-security federal prison at Waseca, Minnesota to a facility in the suburban Denver area. The federal prison in Englewood, Colorado has recently been changed from medium security to low security, while the Minnesota facility is being turned into a low security prison for women. Skilling is serving a 24 year prison sentence for conspiracy, securities fraud and insider trading; his appeal is still pending before the US Court of Appeals for the Fifth Circuit. The Rocky Mountain News also notes that former Enron Broadband CEO Ken Rice, who has been serving his 27 month sentence for securities fraud at a federal prison camp in Beaumont, Texas, was moved to a halfway house in Houston in August in anticipation of his release in February 2009.
As expected (earlier), former Enron Broadband Services division CEO Joseph Hirko pleaded guilty on Tuesday to one count of wire fraud, admitting that he misled investors at Enron’s January 2000 analyst conference by announcing that a new operating system on Enron’s broadband network was completed when it was actually still under development. Hirko agreed to serve a prison sentence of 12 to 16 months; he will also forfeit $7 million in cash and $1.7 million in deferred compensation to the government, which represents what he gained when stock prices rose following the announcement. US District Judge Vanessa Gilmore scheduled his sentencing for March 3, 2009 (Houston Chronicle).
The Houston Chronicle’s Kristen Hays reports that former Enron Broadband Services division CEO Joseph Hirko is expected to plead guilty on Tuesday to a single count of wire fraud before US District Judge Vanessa Gilmore in Houston. The plea agreement calls for Hirko to serve 12 to 16 months in prison. Hirko and former broadband divison software executive Rex Shelby were scheduled to be retried starting December 1 (earlier). The two men and three others were accused of deceiving investors in connection with a failed broadband venture. Hirko, Shelby and former division strategic planning executive Scott Yeager were tried in 2005 and acquitted on some counts, but the jury deadlocked on other counts. Gilmore refused to dismiss those counts. Shelby is still scheduled for trial in December, while Yeager’s retrial is set to begin on January 12, 2009.
US District Judge Vanessa Gilmore on Friday delayed the retrials of former Enron Broadband executives Joseph Hirko, Rex Shelby and Scott Yeager while they take their case to the US Supreme Court. In March, a three-judge panel of the Fifth Circuit ruled that Gilmore was correct in refusing to dismiss most of the remaining charges against Hirko and Shelby and all the remaining charges against Yeager (earlier) after jurors were hung on many counts; the three were acquitted on some counts. Gilmore had scheduled the retrial of Hirko and Shelby for November 3, while Yeager’s retrial was set for January 12, 2009. But prosecutors said that it would be mid-November at the earliest before the Supreme Court could decide if it would take the case. In response, Gilmore rescheduled the Hirko and Shelby retrial for December 1 and the Yeager trial for March 24, 2009 (Houston Chronicle).
Attorneys for former Enron Broadband Services division CEO Joseph Hirko and former divison software executive Rex Shelby on Tuesday asked US District Judge Vanessa Gilmore to dismiss charges against them because a prosecutor allegedly ignored exculpatory evidence. Also on Tuesday, attorneys for former division strategic planning executive Scott Yeager filed a separate motion asking Gilmore to dismiss charges against him. The Houston Chronicle has Kristen Hays’ story here. Hirko and Shelby will be retried on November 3, 2008, while Yeager’s retrial is set for January 12, 2009. The retrials were scheduled after the Fifth Circuit in March upheld Gilmore’s refusal to dismiss the remaining charges (earlier).
Former Enron Broadband CFO Kevin Howard will be tried for a third time; US District Judge Vanessa Gilmore on Monday scheduled his trial to begin March 24, 2009. Howard’s first trial in 2005 resulted in a hung jury. His second trial in 2006 resulted in his conviction on five counts including conspiracy, falsifying books and records and three counts of wire fraud. However, Judge Gilmore dismissed the conviction in January 2007 after the Fifth Circuit ruled in a separate Enron case that the government’s “honest services fraud” theory was improper. In February 2008, prosecutors lost their appeal of her dismissal of one of the counts (earlier). Now AUSA Jonathan Lopez says Howard will be retried on all five counts without seeking a new indictment; the government will instead edit the indictment used in his second trial to erase all references to honest services. The Houston Chronicle has Kristen Hays’ story here.
James A. Brown, one of three former Merrill Lynch executives still possibly facing retrial in the Enron Nigerian Barge case after their convictions were reversed on appeal (here and here ), is now asking that a former Enron Task Force prosecutor be investigated for misconduct on grounds that he wrongly withheld exculpatory evidence and knowingly misled the judge and jury in the November 2004 trial. And the former prosecutor? None other than Matthew Friedrich, Acting Assistant AG of the Criminal Division of the DOJ. Brown has asked Senate Judiciary Committee, the OPR and the Virginia Bar to investigate Friedrich’s conduct, and Brown’s attorney Sidney Powell said that similar complaints will be made against other prosecutors in the case (Bloomberg).
Carleen Hawn thinks it could happen, and Prof. Malcolm Salter likes Jeff Skilling’s chances (Financial Week).
US District Judge Vanessa Gilmore on Monday scheduled retrials for former Enron Broadband Services executives Joseph Hirko, Rex Shelby and Scott Yeager. Hirko and Shelby will be retried on November 3, 2008, while Yeager’s retrial is set for January 12, 2009. In March, a three-judge panel of the Fifth Circuit ruled that Gilmore was correct in refusing to dismiss most of the remaining charges against Hirko and Shelby and all the remaining charges against Yeager (earlier) after jurors were hung on many counts; the three were acquitted on some counts. Attorneys for all three defendants indicated on Monday that they will appeal the Fifth Circuit ruling to the US Supreme Court and will ask Gilmore to delay the retrials if a hearing is granted (Houston Chronicle).
David Bermingham, Giles Darby and Gary Mulgrew, three British investment bankers known as the NatWest Three, were each ordered on Tuesday by US District Judge Ewing Werlein to report to prison within the next three weeks, each at a different prison. Mulgrew was ordered to surrender to the facility in Big Spring, Texas, on April 30; Darby to the Allenwood facility in White Deer, Pennsylvania, on May 7; and Bermingham to the prison in Lompoc, California on May 9. They all asked for Allenwood at their sentencing hearing and Judge Werlein recommend it, but the Bureau of Prisons has final authority(Bloomberg).
The former Greenwich NatWest bankers were indicted on seven counts of wire fraud in 2002 in connection with a scheme devised by former Enron CFO Andrew Fastow and his right-hand man Michael Kopper. They pleaded guilty in 2007 to one count of wire fraud and were sentenced to 37 months in prison plus restitution by Judge Werlein on February 22, 2008 (earlier). Their plea agreements call for them to be eligible for transfer to the UK after several months imprisonment in the US, and under the UK system they will be eligible for parole after serving half of their sentences.
Jeff Skilling’s lead attorney Daniel Petrocelli on Wednesday called former Enron CEO Jeff Skilling’s 2006 trial “fundamentally unfair and defective” in oral arguments before the US Court of Appeals for the Fifth Circuit in New Orleans. In urging the three-judge panel to overturn the convictions, Petrocelli focused on the August 2006 US v. Brown (Enron Nigerian Barge) decision in which the Fifth Circuit held that “honest services fraud” does not apply when an employee’s actions were intended to benefit the company rather than for personal gain. Skilling was convicted in May 2006 on 19 of 28 counts including conspiracy, securities fraud and insider trading and is currently serving a 24 year prison sentence. Houston Chronicle (Kristen Hays), Texas Lawyer (Brenda Sapino Jeffreys), AP.
The US Court of Appeals for the Fifth Circuit will hear arguments today in the appeal of former Enron CEO Jeff Skilling. Kristen Hays’ Houston Chronicle story here discusses the key issues, especially the “honest services fraud” theory used to convict him. The Fifth Circuit has already rejected this theory in vacating convictions in the Enron/Merrill Lynch Nigerian Barge case. Skilling was convicted in May 2006 on 19 of 28 counts including conspiracy, securities fraud and insider trading; he is currently serving a 24 year prison sentence.
Predictably, the government response to Jeff Skilling’s supplementary appellate brief denies that the Enron Task force withheld material exculpatory information from the former Enron CEO’s defense team. The government’s brief, filed on Tuesday, asserts, “Skilling’s claims rely on isolated snippets culled from 420 pages of handwritten notes and stripped of their context.” It accuses Skilling of using “hyperbolic rhetoric” and says that the Andrew Fastow interview notes that Skilling cites in his supplemental brief either contain information that Skilling had prior to the trial in the summaries of the notes “or would have had minimal value in impeaching Fastow.” Houston Chronicle here (with link to the brief), our earlier posts here, here and here. The US Court of Appeals for the Fifth Circuit has scheduled arguments in the appeal for April 2.
Following the news that the three former Merrill Lynch executives still possibly facing retrial in the Enron Nigerian Barge case have filed a motion asking US District Judge Ewing Werlein to order the government to give them the Andrew Fastow notes (earlier here; Chronicle here), Tom Kirkendall at Houston’s Clear Thinkers posts here on the motion filed by Sidney Powell, attorney for defendant James A. Brown, to dismiss the indictment on grounds of egregious prosecutorial misconduct, Brady violations and double jeopardy, and links here to the motion, which he has bookmarked. It’s a stunning motion which goes well beyond the Fastow notes in its allegations.
In light of the revelations in Jeff Skilling’s recently unsealed brief regarding the Andrew Fastow notes (earlier here and here), attorneys for James A. Brown, Daniel Bayly and Robert Furst — the three former Merrill Lynch executives still possibly facing retrial in the Enron Nigerian Barge case — have now filed a motion asking US District Judge Ewing Werlein to order the government to give them the notes. The retrials are currently delayed while the defendants’ appeal of Werlein’s refusal to dismiss is pending before the Fifth Circuit (earlier). Kristen Hays’ Houston Chronicle story is here.
A three-judge panel of the 5th US Circuit Court of Appeals on Tuesday ruled that US District Judge Vanessa Gilmore was correct when she refused to dismiss most of the remaining charges against former Enron Broadband Services executives Joseph Hirko and Rex Shelby and all the remaining charges against Scott Yeager. The three men were tried in 2005 and acquitted on some charges while the jury deadlocked on others (Houston Chronicle trial verdict story here); Judge Gilmore declared a mistrial but would not dismiss the charges. In Tuesday’s ruling, the appeals court said that despite the acquittals it could not be concluded that the men could not be found guilty of some of the other charges against them. Hirko’s lawyer Per Ramfjord indicated that a motion for rehearing before the full appellate court was possible. The Mary Flood/Kristen Hays Houston Chronicle story is here.
Here, for our readers, is Jeff Skilling’s Supplemental Brief Regarding Andrew Fastow Interview Notes. Originally filed under seal, and now unsealed, the brief details the material withheld from Skilling and how this withholding affected Skilling’s trial defense. We breathlessly await the government’s response. Brady-Giglio claims seldom prevail on appeal. An appellant must prove, among other things, that the withheld information was material, non-cumulative, and unavailable to the defendant by other means. Nevertheless, my initial take on this issue, after coming to it late, is that Skilling has a decent chance to win. The government’s use of a composite 302, which allegedly masked Fastow’s changing stories, as well as the government’s failure to show all of its raw Fastow interview notes to the trial court, are, in my view, quite striking (troubling) factors–and highly unorthodox. Ideoblog discusses the matter further, here, as does the always informative Tom Kirkendall, in Houston’s Clear Thinkers.
The Houston Chronicle reports here on convicted former Enron CEO Jeff Skilling’s latest substantive, and fully unsealed, appellate brief, which publicly references for the first time all of the Fastow interview notes that Skilling claims were improperly withheld from the defense by the prosecution. According to Hays, “[a]fter the trial, jurors told reporters that they didn’t give Fastow’s testimony much weight.” This gratuitous information, whether true or false, will be utterly irrelevant to the Fifth Circuit’s ultimate analysis of whether there was a Brady violation, and, if so, whether it warrants reversal.
Kristen Hays’ Houston Chronicle story here discusses recent filings in the appeal of former Enron CEO Jeff Skilling. At issue are the notes from the FBI interviews of former Enron CFO Andrew Fastow, which the defense contends will reveal exculpatory evidence. Skilling’s lead attorney Daniel Petrocelli describes the content of the notes as “a sledgehammer that destroys Fastow’s testimony.” The defense filings seek to use the notes in the appeal and make the contents public.
The article misleadingly states that Skilling’s attorneys were given summaries of Fastow’s interviews before the trial; a chron.com reader comment to the story notes: “Standard procedure has the prosecution giving the defense ’summaries’ know[n] as Form 302s, made by FBI agents from their raw notes. The Task Force DID NOT do this. Instead, they summarized the FBI forms into a ‘composite draft’, and they destroyed all previous drafts of their summary. BIG difference.”
The US Court of Appeals for the Fifth Circuit has scheduled arguments in the appeal for April 2 (earlier coverage here).
The U.S. Court of Appeals for the Fifth Circuit has scheduled arguments for April 2 in New Orleans in former Enron CEO Jeff Skilling’s appeal of his convictions. Skilling was convicted in May 2006 on 19 of 28 counts including conspiracy, securities fraud and insider trading; he is currently serving a 24 year prison sentence. Skilling’s appeal contends that the government’s “honest services fraud” theory used to convict him is fatally flawed; the Fifth Court has already vacated convictions in the Enron Nigerian Barge case which were based on the same prosecution strategy. Kristen Hays’ Houston Chronicle story is here.
David Bermingham, Giles Darby and Gary Mulgrew, three British investment bankers known as the NatWest 3, were each sentenced to 37 months in prison on Friday by US District Judge Ewing Werlein in Houston. In accordance with their plea agreements, they will also have to pay $7.3 million restitution to Royal Bank of Scotland, parent of their former employer Greenwich NatWest. The plea agreements also allow the men to be eligible for transfer to
the UK in several months, and under the UK system they will be eligible
for parole after serving half of their sentences.
The three men were charged with seven counts of wire fraud in a 2002 indictment in connection with a scheme devised by former Enron CFO Andrew Fastow and his right-hand man Michael Kopper, Enron’s former global finance manager. In a complex series of transactions, Enron paid $20 million for Greenwich NatWest’s interest in a Fastow-controlled partnership, but Greenwich NatWest only received $1 million, while Fastow and Kopper siphoned off the difference and paid $7.3 million to Bermingham, Darby and Mulgrew. However, although the three men agreed to repay the money, they actually only pleaded guilty to one count of wire fraud and that was not the count involving the $7.3 million wire transfer. Tom Kirkendall at Houston’s Clear Thinkers had an excellent analysis of the plea deal here. Kristen Hays has the Houston Chronicle’s story on the sentencing here.
US District Judge Vanessa Gilmore on January 31, 2007 dismissed the five-count conviction of former Enron Broadband CFO Kevin Howard (Houston Chronicle story here) after a ruling by the US Circuit Court of Appeals for the Fifth Circuit, in a separate Enron case, that the government’s “honest services fraud” theory was improper. Prosecutors had conceded that four of the counts of conviction should be vacated but appealed the dismissal of the fifth. Now in a decision filed on Tuesday, the Fifth Circuit has rejected the DOJ appeal (Howard Decision). Prosecutors have not indicated if they will seek to retry Howard (h/t Houston’s Clear Thinkers).
- Schering-Plough President Carrie Smith Cox’s large stock sale prior to the public release of the Vytorin clinical trial results has now come to the attention of the Congressional committee already investigating the Vytorin ad campaign. (Junkfood Science; earlier)
- Tom Kirkendall discusses the Enron Task Force’s continued refusal to turn over potentially exculpatory evidence, especially regarding Andrew Fastow. (Houston’s Clear Thinkers)
- Is the DOJ’s prosecution of Geoffrey Fieger a political vendetta? (Scott Horton in Harper’s)
In Houston on Wednesday US District Judge Ewing Werlein delayed the Enron-related conspiracy and wire fraud retrial of former Merrill Lynch executives Daniel Bayly and Robert S. Furst. The trial was scheduled to start next week but Werlein granted the delay because Bayly, Furst and James A. Brown (who is scheduled for a separate retrial) have filed an appeal with the Fifth US Circuit Court of Appeals in New Orleans asking the court to overturn Werlein’s earlier ruling not to dismiss all charges. The three were convicted in 2004 in the Enron Nigerian Barge case but the Fifth Court reversed the convictions in 2006, rejecting the government’s “honest services fraud” theory. The Yahoo/AP story is here.