Lay, Skilling face hard road
The chances of winning on appeal look slim, and prison terms could be 20 years or more, legal experts say.
NEW YORK (CNNMoney.com) - Jeffrey Skilling was once a hard-charging poster boy for energy deregulation. Kenneth Lay was once a big political fund-raiser for George W. Bush.
Now both of the former Enron executives are likely to spend a big chunk - if not all - of the rest of their lives behind bars. Skilling and Lay were found guilty Thursday of conspiracy and fraud in one of the most infamous corporate crime trials of the new century.
"Nine out of 10 times appeals hinge on argument that the judge didn't accurately describe the law to jurors," said Donald Langevoort, Thomas Aquinas Reynolds Professor of Law at Georgetown Law School. "Eight out of 10 times the argument fails."
"People in Houston are still very engaged," said Langevoort. "If that crowd is in the courtroom or on the courthouse steps - literally or figuratively - the judge will be aware of that at sentencing time. I have no doubt 20 to 30 years is well within the realm of possibility."
Nicholas Theodorou, a former federal prosecutor and defense lawyer for the firm Foley Hoag LLP in Boston, said, "Certainly we're looking at double-digit sentences for Lay and Skilling."
He noted that Adelphia's John Rigas got 15 years and ex-WorldCom CEO Bernie Ebbers 25 for their roles in the corporate frauds at those companies. And Judge Sim Lake has already convicted Lay on bank fraud in another Enron case, he added.
Judge Lake conducted the main Enron trial well and appeared to leave little room for error, legal experts said.
"This judge was very meticulous in the way he let the case be presented by both sides," said Roma Theus, who focuses on corporate integrity and white-collar crime at the Defense Research Institute, a national organization for defense lawyers. "The likelihood of serious error in how the case was presented is not great. Error must be so significant it taints the entire trial."
If their appeals fail, Lay and Skilling will probably be sent to minimum- or low-security federal prisons, which house about 85 percent of all federal prisoners. A medium-security facility is also possible.
It's highly unlikely they'lll do time at a maximum-security prison that houses violent or dangerous criminals, legal experts said.
If no appeal is granted, the defense will seek to get the lowest possible sentence set forth under federal sentencing guidelines, according to Langevoort.
Some of the factors affecting this stage include the amount of harm the defendants caused society as well as their contriteness, "Since the defendants announced after the trial they're not guilty they're not likely to make the case for contriteness," said Langevoort. "Unless there's a substantial change in attitude."
Sentencing day, September 11, 2006
"I think in September there will be a lot to be said," Langevoort said. "Some will be PR from all the parties. But the sentencing goes back to a question of what kind of message the judge wants to make."
"Sept. 11th won't be a routine Melba Toast sentencing hearing," noted Theus from the defense lawyers' group.
Experts agree that the amount of financial loss will be hotly debated.
The government will introduce evidence of how Lay and Skilling's crimes caused significant financial losses, according to Theodorou. The defense will argue all the loss can't be attributable to the actions of the defendants, even if they were guilty.
After Judge Lake makes the decision on the sentencing, the Bureau of Prisons will decide what prison Lay and Skilling are headed to.
Minimum-security facilities include Federal Prison Camps like the West Virginia facility, dubbed "Camp Cupcake," that housed Martha Stewart after she was found guilty of criminal charges that she lied to investigators during an insider trading probe of her personal sale of ImClone Systems stock in late 2001
Documents on the Bureau's Web site describe the camps as "work- and program-oriented" with "dormitory housing, a relatively low staff-to-inmate ratio, and limited or no perimeter fencing." They are often located on military bases or near large institutions.
Low-security prisons have double-fenced perimeters, dormitory or cubicle housing, more staff per inmate and "strong work and program components." Medium-security institutions have double fences with electronic detection systems and "greater internal controls."
Mike Truman, spokesman for the Bureau of Prisons, said the agency takes three factors into consideration when placing inmates. They try to place them within 500 miles of their residence to make visits easier, the facility must have space, and of course, the security risk of the inmate.
Risk factors considered include the severity of the offense and the length of the sentence, whether additional charges are pending, their prior record and any history of violence.
Lay and Skilling's day of reckoning. Click here.