HOUSTON (CNNMoney.com) - Enron former chief executive Jeffrey Skilling and founder Kenneth Lay were found guilty Thursday of conspiracy and fraud in the granddaddy of all corporate fraud cases.
On the sixth day of deliberations, a jury of eight women and four men convicted the former executives of misleading the public about the true financial health of Enron, whose collapse in late 2001 symbolized the wave of corporate fraud that swept the United States early this decade
Skilling was found guilty on 20 counts of conspiracy, fraud, false statements and insider trading. He was found not guilty on eight counts of insider trading.
Lay was found guilty on all six counts of conspiracy and fraud.
In a separate bench trial, Judge Sim Lake ruled Lay was guilty of four counts of fraud and false statements.
Both Lay and Skilling could face 20 to 30 years in prison, legal experts say.
Sentencing was set for the week of Sept. 11.
The verdict is a major victory for the government and marks the end of one of the most scandalous chapters in the history of corporate America.
Houston-based Enron, once one of the hottest companies on Wall Street, imploded in a matter of months after Skilling abruptly resigned as CEO in August 2001. Lay, who was chairman at the time, postponed his retirement plans to return to the helm.
Enron's collapse marked the first of the high-profile corporate scandals that rocked the nation, followed by WorldCom, Global Crossing, Adelphia and Tyco. The wave of fraud led to passage of the Sarbanes-Oxley law that tightened oversight of how American companies are audited.
After a government investigation that took 4-1/2 years, prosecutors presented evidence that Lay and Skilling orchestrated a conspiracy to artificially inflate profits, hide millions in losses and misrepresent the true nature of the company's finances.
The long-awaited trial began Jan. 31 in Houston, despite repeated protests from defense attorneys calling for a change in venue.
The defense argued that it was impossible to get a fair trial in Houston - the epicenter of Enron's collapse. Enron's bankruptcy, the biggest in U.S. history when it was filed in December 2001, cost 4,000 employees their jobs and many of them their life savings. Investors lost billions.
Over 16 weeks, the government presented 22 witnesses, including former top executives, who testified that Skilling and Lay fostered a culture that put the company's image and stock price above everything else, at any cost.
Sixteen people pleaded guilty for crimes committed at the company, and five others, including four former Merrill Lynch employees, were found guilty at trial. Eight former Enron executives testified against Lay and Skilling, their former bosses.
But it was Enron's former finance chief, Andrew Fastow, who was the star witness for the government.
Fastow, who pleaded guilty to wire and securities fraud in 2004 in exchange for an expected 10-year sentence, testified that special partnerships were created to help the company hide millions of dollars in losses.
But defense lawyers dismissed the testimony of Fastow and other witnesses, saying that not only were Lay and Skilling innocent, but that no crimes were committed at Enron, except for the shady deals that enriched Fastow.
As for those other than Fastow who testified against Lay and Skilling, defense attorneys said they were strong-armed by the government and compelled to lie on the stand out of fear for themselves and their families.
In an attempt to explain away the company's aggressive accounting and the optimistic comments executives made to Wall Street, both Skilling and Lay testified during the trial.
But that yielded decidedly mixed results.