Category Everything Else
And this guy didn't even get much of
a kickback from it all... When you compare this crime to what Skilling
presided over during the Enron collapse, "life imprisonment"
Ex-Dynegy Exec Gets 24 Years for Fraud
By C. Bryson Hull
HOUSTON (Reuters) - A
federal judge on Thursday sentenced former Dynegy Inc. (NYSE:DYN
tax executive Jamie Olis to 24 years in prison for his role in an Enron-style
scheme to burnish the company's finances by disguising a $300 million debt.
The 38-year-old lawyer and accountant was convicted in a November trial
of six counts of criminal conspiracy and securities, wire and mail fraud
for his role in the complicated 2001 financial transaction dubbed "Project
Alpha." U.S. District Judge Sim Lake also fined Olis $25,000.
Lake, who presided over Olis' trial, said
he took no pleasure following the federal laws that dictated such a stiff
sentence for a first-time white collar offender.
"Sometimes good people commit bad acts,
and that is what happened in this case," Lake told Olis. He permitted
Olis to remain free on bond and turn himself in to prison.
The judge said he was required to give Olis
a sentence of between 24 and 30 years, five years shy of the maximum, based
on the massive losses Dynegy shareholders suffered as a result of Project
Olis, who was already choked up as he stood
before the judge, had no visible reaction to the sentence, read in a courtroom
filled to capacity with his family, supporters and ex-Dynegy colleagues.
New laws enacted last year in response to
a wave of corporate chicanery, and in 2001, stiffened the penalty range
for white collar crimes, putting them equal with offenses like bank robbery.
Michael Shelby, U.S. Attorney for the Southern
District of Texas said Olis' harsh punishment was deserved, since thousands
of investors lost their savings over Project Alpha.
Shelby said the investigation into Alpha is
active, but would not say if the probe was focusing on six unindicted co-conspirators
named during the Olis trial, including Dynegy's former chief financial
Olis' attorney, David Gerger, criticized prosecutors
for focusing on a lower-level executive like Olis instead of on his bosses.
"The government is on a witch hunt, and
today the witch hunt netted a very small fish," Gerger told reporters.
He said he had not yet decided whether to appeal.
NO SLAP ON WRIST
The fate of Olis, one of the first executives
to go to trial and be sentenced in an Enron-style fraud case, demonstrated
that the days of a slap on the wrist for business crime are over.
David Adler, a Houston criminal defense lawyer,
said the sentence was "far beyond the average for white collar crime."
"But the other tragedy of this case is
that it may convince people who have done nothing wrong to plead guilty
instead of go to trial, as the lesser of two evils," he said.
Adler said he expected Olis would serve at
least 20 years, with time off for good behavior.
Olis, who worked in the Houston-based energy
merchant's tax department, was a key engineer of Alpha. The deal dressed
up a $300 million loan as a five-year gas trade to help boost cash flow
and hopefully, Dynegy's stock.
Dynegy's cash flow had been lagging earnings,
causing consternation -- and a lower share price -- on Wall Street. The
deal also helped Dynegy claim an improper $79 million tax benefit, later
Dynegy's stock lost more than half its value
on April 26, 2002, the day after the Houston company disclosed a U.S. Securities
and Exchange Commission (news
sites) investigation into Alpha.
It also had to reclassify the $300 million
as debt, pay the SEC a $3 million fine and restate its 2001 earnings downward
by 12 percent. The total losses to investors were in the billions.
Two other Dynegy employees, Helen Sharkey
and Gene Shannon Foster, Olis' boss, each pleaded guilty to conspiracy
to commit securities fraud and agreed to cooperate with prosecutors. Lake
is due to sentence both on Aug. 19, and each faces a maximum of five years