WHITE-COLLAR CRIME: WHO DOES TIME?
February 28, 2006
The trial of Enron's Kenneth Lay and Jeffrey Skilling may not be as predictable as people think. Recent history shows white-collar crime convictions occasionally result in unlikely outcomes, according to BusinessWeek.
A specific crime must be committed and the executive must have had bad intentions. This can be very difficult to prove, as neither greed nor accounting tricks are necessarily illegal. Furthermore, a defendant who helps prosecutors catch top executives may also receive very little punishment. The culture of the justice system also affects the outcome, says BusinessWeek.
Sometimes corporate crime results in severe consequences, as the Ebbers trial confirms. Other times, corporate villains come away only mildly bruised, says BusinessWeek. For example:
- Michael Milken served less than two years in prison and left in 1992 with a fortune of roughly $500 million, thanks to the less harsh culture of the justice system at the time.
- Gary Winnick of Global Crossing Ltd., who pocketed millions from stock sales, is not criminally or civilly charged. His fiber-optic swaps made the company look financially stronger than they were, but the swaps were not exactly illegal.
- WorldCom's Bernie Ebbers, on the other hand, may serve 25 years, since pretending everyday expenses are capital investments is an unmistakable accounting violation.
- WorldCom CFO Scott Sullivan only received five years for helping prosecutors nail Ebbers.
- HealthSouth's Richard Scrushy, charged with a $2.7 billion fraud, avoided charges by using his hometown jury to his advantage, even when five former HealthSouth CFOs pleaded guilty and implicated him as well.
The world may think convictions wait for Ken Lay and Jeff Skilling, but trials take on a life of their own, says BusinessWeek.
Source: Jane Sasseen, "White-Collar Crime: Who Does Time?" BusinessWeek, February 6, 2006.
Browse more articles on Government Issues