Ex-Enron Chief’s Sentence Is Cut by 10 Years, to 14

Story Originally Appeared in DealB%k

The prison sentence of Jeffrey K. Skilling, the former chief executive of Enron who spearheaded the pervasive fraud that destroyed the energy company, was reduced by 10 years on Friday after a federal judge approved a deal between his lawyers and prosecutors.

Judge Simeon T. Lake III of Federal District Court in Houston, who oversaw Mr. Skilling’s trial in 2006, signed off on an agreement that will decrease his 24-year sentence to 14 years.

The reduction was driven in part by a 2009 appeals court ruling that ordered a recalculation of Mr. Skilling’s sentence because of a mistake made by the judge in interpreting the federal sentencing guidelines.

Mr. Skilling, 59, who has been serving his sentence at a federal prison in Colorado, appeared in court on Friday wearing an olive-drab prison uniform and a salt-and-pepper beard, and looking bulkier than he did during his days as a corporate chieftain.

He will now exit prison as early as 2017. There is no parole in the federal criminal justice system, but Mr. Skilling will most likely receive the standard 15 percent sentence reduction for good behavior and a one-year reduction for completing an alcohol-abuse treatment program.

“We are relieved that Jeff can now look forward a day when he can come home to his family and friends,” said Daniel M. Petrocelli, Mr. Skilling’s lead lawyer.

In exchange for his reduced sentence, Mr. Skilling gave up about $42 million, all of which will be distributed to victims of Enron’s fraud. He also agreed not to pursue any further legal appeals, including a claim that would have accused the prosecution team of misconduct.

“The sentence handed down today ends years of litigation, imposes significant punishment upon the defendant and precludes him from ever challenging his conviction or sentence,” Mythili Raman, the acting assistant attorney general, said in a statement.

Several Enron victims wrote letters to the court protesting Mr. Skilling’s proposed reduced sentence. On Friday, Andrew Stoltmann, a lawyer who represented several victims, criticized the Justice Department for agreeing to the reduction and said it was unacceptable coming on the heels of the lack of prosecutions arising out of the financial crisis.

“By entering into this early release agreement, a clear message will be sent to corporate C.E.O.’s that if you get caught with the hand in the cookie jar, you will get little more than a slap on the wrist,” Mr. Stoltmann said.

Mr. Skilling’s legal team mounted a zealous appeal, seeking to overturn his conviction on a variety of legal grounds. Last year, they said that Mr. Skilling would seek a new trial based on recently discovered evidence.

The case also made its way to the Supreme Court, which in 2010 questioned the use of the “theft of honest services” law that helped convict Mr. Skilling, finding it unconstitutionally vague. But a federal appeals court ruled that there was overwhelming evidence of his guilt, so his conviction was not tainted by the use of that legal theory.

Mr. Skilling, a former consultant at McKinsey & Company, joined Enron in 1990 and led its transformation from a sleepy pipeline operator to a global energy-trading colossus. He also played a central role in the accounting schemes that masked its debts and weak finances from shareholders and regulators.

The fall of Enron, which at its peak was one of the country’s most admired businesses, cost shareholders billions of dollars and its employees their retirement savings. Its demise ushered in a wave of prosecutions that rooted out accounting fraud at once-highflying companies like WorldCom, HealthSouth and Adelphia Communications.

Prosecutors tried Mr. Skilling alongside Kenneth L. Lay, Enron’s chairman, who was also found guilty in the fraud. Mr. Lay died about a month after the trial, and his conviction was vacated.

During Mr. Skilling’s time in prison, his parents and his 20-year-old son have died.