Skilling, Lay guilty of numerous charges

The maximum penalty for each man is well over a hundred years.
HOUSTON (AP) -- Former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling were convicted Thursday of conspiracy and securities and wire fraud in one of the biggest business scandals in U.S. history.
The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation's seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations after a federal criminal trial that lasted nearly four months.
Lay was also convicted of bank fraud and making false statements to banks in a separate, nonjury trial before U.S. District Judge Sim Lake related to Lay's personal finances.
The conspiracy conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corp. and homemaking maven Martha Stewart. The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable.
Enron's collapse alone took with it more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.
"The jury's verdicts help to close a notorious chapter in the history of America's publicly traded companies" said Rep. Michael Oxley, R-Ohio, co-author of the Sarbanes-Oxley legislation. "Appeals aside, the end of the trial will mark the end of a dark era."
Verdicts
Enron founder Lay was convicted on all six counts against him in the corporate trial and all four in the personal banking trial. Former Chief Executive Skilling was convicted on 19 of the 28 counts in the corporate trial, including one count of insider trading, and acquitted on the remaining nine.
Lake set sentencing for Sept. 11. Lay's charges carry a maximum penalty in prison of 45 years for the corporate trial and 120 years in the personal banking trial. Skilling's charges carry a maximum penalty of 185 years in prison.
As Lake read the verdict from the bench, Lay tossed his head at hearing the first "guilty" on the conspiracy count. He clutched his wife's hand as he heard that word over and over again.
Lay sat with his wife, Linda; his daughter, Elizabeth Vittor, a member of his defense team; and Linda Lay's daughter, Robyn. As Lay clutched Linda Lay's hand, the three women leaned forward and began to sob quietly.
After Lake left the courtroom, Lay's family and some friends gathered around him as the ex-chairman, red-faced and fighting back tears, hugged them and thanked them for their support.
Skilling, sitting with his brother, Mark, showed no emotion when the verdict was read.
Sentencing set
The sentencing will come five years almost to the day after Skilling sold 500,000 shares of Enron stock for $15.5 million, for which he was convicted of insider trading.
"Obviously, I'm disappointed," Skilling told reporters outside the courthouse. "But that's the way the system works."
"We're going to stand behind him," his lawyer, Daniel Petrocelli, said. "As I told him, we've just begun to fight."
Skilling's $5 million bond, which restricts him to the continental U.S., remains in effect. Lay, who surrendered his passport, posted a $5 million bond secured with family-owned properties at a hearing after the verdict.
The Enron founder was also ordered to stay in the Southern District of Texas or Colorado, avoid contact with any victim of the offense charged, report to pretrial services regularly and must not own a gun or use alcohol excessively or drugs.
"I firmly believe I'm innocent of the charges against me," Lay said after the hearing. "We believe that God in fact is in control and indeed he does work all things for good for those who love the Lord."
Didn't believe testimony
Jurors found through their verdict that both men had repeatedly lied to cover a vast web of unsustainable accounting tricks and failing ventures at Enron.
The panel rejected Skilling's insistence that no fraud occurred at Enron other than that committed by a few executives skimming millions in secret side deals, and that bad press and poor market confidence combined to sink the company.
"I wanted very, very badly to believe what they were saying, very much so, and there were pieces in the testimony where I felt their character was questioned," juror Wendy Vaughan said after the verdict was announced.
Both men testified in their own defense. The government's victory caps a 41/2 year investigation that garnered 16 guilty pleas from ex-Enron executives, including former Chief Financial Officer Andrew Fastow.
All are awaiting sentencing later this year except for two, who either finished or are still serving prison terms.
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