Risk & Compliance

Lay-Skilling Case Goes to Jury

''They lied,'' says prosecutor Sean Berkowitz, who has the last word before deliberations begin. ''It's not business as usual. Don't let them fool ...
Stephen TaubMay 17, 2006

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The fate of former Enron executives Kenneth Lay and Jeffrey Skilling is in the hands of the jury.

After a four-month trial and more than four years after the energy giant sought bankruptcy protection, jurors will weigh the merits of 28 charges against Skilling and a half-dozen against Lay.

The last word on the case, before Judge Sim Lake turned it over to the jurors, went to prosecutor Sean Berkowitz, the head of the government’s Enron Task Force. In a two-hour rebuttal to the defense’s closing arguments, Berkowitz reportedly asserted that Lay and Skilling lied when they testified that they did not commit any crimes.

“They lied to their investors,” Berkowitz stated, reported The Wall Street Journal. “They omitted critical facts, and at key times they put their own interests above those of their shareholders. And they lied, ladies and gentlemen, from the stand. It’s not business as usual. Don’t let them fool you.”

According to the Houston Chronicle, Berkowitz continued: “They have gotten on the stand and told their stories. This isn’t Hollywood, ladies and gentlemen, we didn’t make this up.” (In a movie moment, however, Berkowitz reportedly added that “The Wall Street Journal published the truth, and Enron couldn’t handle the truth.”)

On Thursday, Judge Lake will begin hearing testimony in a bench trial — that is, without a jury — is which Lay is charged with one count of bank fraud and three counts of making false statements to banks. The former Enron executive allegedly used $75 million in loans from three banks from 1999 through 2001 and reneged on agreements not to use the money to carry or buy margin stock, according to the Journal.

The case is expected to last a few days, the publication noted, and Lake plans to issue his verdict after the jurors deliver their verdict in the larger case.