The prison sentence of Jeffrey K. Skilling, the former chief executive of Enron who spearheaded the pervasive fraud that destroyed the 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 federal 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.
He will now exit prison as early as 2017. Though there is no parole in the federal criminal justice system, Mr. Skilling will most likely receive the standard 15 percent sentence reduction for good behavior and a one-year reduction for completing a substance-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 that 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 withholding exculpatory evidence.
â! €œThe 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, lawyers for Mr. Skilling said tht he would seek a new trial based on recently discovered evidence.
The case also made its way all the 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 Mr. Skilling’s 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 the company’s transformation from a sleepy pipeline operator to a global energy-trading colossus. But he also played a central role in the accounting schemes that masked the company’s 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 employees their retirement savings. Its demise also ushered in a wave of prosecutions that root! ed out ac! counting 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. But Mr. Lay died a month after the trial, and his conviction was vacated.
Though the corporate accounting scandals of a decade ago have faded from public view, replaced by the financial crisis and insider-trading scandals, the Enron case still has a hold on the white-collar criminal defense world.
In Las Vegas next week, one of the keynote speakers at the annual conference of the Association of Certified Fraud Examiners is Enron’s former chief financial officer, Andrew Fastow, who will speak about his crimes. Mr. Fastow was released from prison in 2011 after serving a reduced sentence for testifying against Mr. Silling.
