Georgia Criminal Lawyer Blog

The Supreme Court has dealt a blow to federal prosecutors pursuing corporate executives by restricting the federal statute which makes it a crime “to deprive another of the intangible right of honest services.”  Jeffrey K. Skilling, the former CEO of Enron, sold a half million shares of company stock and made a profit of $15 million after allegedly lying about the financial health of the company.  A few months later the company fell into bankruptcy. Skilling was convicted and sentenced to 24 years imprisonment.

Justice Ginsburg, writing for the majority, said the law must be limited to the core offenses of bribes and kickbacks.  Justice Ginsburg wrote, “Because Skilling’s misconduct entailed no bribe or kickback, he did not conspire to commit honest-services fraud under our confined construction” of the law.

In another significant ruling the justices instructed the lower courts to reconsider the conviction of Conrad Black, the newspaper executive convicted of defrauding his media company, Hollinger International.  In Black et. al. v. United States, the court held that its opinion in Skilling on the scope of the honest services law renders the jury instructions in Black on that law incorrect.

The decisions may have implications for cases involving politicians as well, including Gov. Rod Blagojevich of Illinois, whose trial is underway, and Joseph Bruno, a prominent New York politician who was convicted of federal corruption charges last December.

Skilling v. United States is available here

Black et. al. v. United States is available here