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Federal appeals court upholds decision to vacate ex-Enron CFO conviction

[JURIST] A three-judge panel of the US Court of Appeals for the Fifth Circuit on Thursday upheld [opinion, PDF] an earlier ruling [JURIST report] by a federal district court to vacate the conviction of former Enron [JURIST news archive] CFO Kevin Howard [Houston Chronicle profile]. District Judge Vanessa Gilmore had vacated Howard's conviction in light of an August 2006 opinion [JURIST report] by the Fifth Circuit that overturned separate Enron convictions "on the legal ground that the government's theory of fraud relating to the deprivation of honest services ... is flawed." Prosecutors in the Howard case relied on the "honest services" theory in four of the five counts on which Howard was convicted [JURIST report], despite the fact that Howard did not take money or property in negotiating a deal to sell future Enron profits in an alleged mark-to-market accounting fraud scandal, a required element of an "honest services" crime. The Fifth Circuit agreed with Gilmore, arguing that the honest services instruction "tainted" the falsifying records charge.

In 2006, former Enron CEO Jeffrey Skilling [Houston Chronicle profile] also requested [JURIST report] that the judge presiding over his trial dismiss his conviction [JURIST report] on 19 counts of insider trading, securities fraud, and conspiracy in light of the Fifth Circuit decision. He appealed his conviction [JURIST report] to the Fifth Circuit last fall. AP has more. The Houston Chronicle has local coverage.

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