Former Enron Corp chiefs Ken Lay and Jeffrey Skilling were convicted on Thursday of fraud and conspiracy in one of the greatest corporate scandals in US history, and could spend the rest of their lives in prison.
The verdict capped a bitter four-month-long trial that was the culmination of the government's years-long effort to punish them for their roles in the stunning 2001 overnight collapse of Enron, which shook the country's faith in corporate America and led to new corporate governance regulations.
The verdicts also brought an end to an era of corporate mega scandals in which Enron, Worldcom and Tyco collapsed under tens of billions of dollars of debt.
"The jury sent an unmistakable message: You can't lie to shareholders. No matter how rich and powerful, you must play by the rules," prosecutor Sean Berkowitz said.
As the verdicts were read, Lay slumped, sighed heavily and shook his head, his sobbing wife Linda tightly clutching his arm. Skilling looked shaken and left the courtroom quickly after US District Judge Sim Lake set sentencing for Sept. 11.
Afterward, still in the courtroom, Lay and his weeping family members gathered in a circle, clasped hands and prayed.
"God's got another plan right now," Lay, the son of a preacher, said without tears. "We'll all come through this stronger and more reliant on God."
Outside the courthouse, he said the verdict had "shocked" him.
"Certainly this is not the outcome we expected," Lay said. "I firmly believe I am innocent of the charges against me, as I have said from day one."
"If I were a CEO today, I would say it sends a very dangerous message. [It] basically makes an innocent act criminal," he said.
Lay, 64, was convicted of all six counts of conspiracy and fraud and faces a maximum of 45 years in prison.
Skilling, 52, was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements, which combined carry a maximum sentence of 185 years. He was not convicted of nine counts of insider trading.
In a separate trial for Lay, Judge Lake found him guilty of all four bank fraud charges for illegally using money from US$75 million in personal loans to buy stock.
Each of those four charges carries a maximum of 30 years, but experts say he is unlikely to be sentenced to more than six months for each because he paid off the loans and the lenders suffered no damage.
Lay and Skilling, once well-regarded business leaders who moved comfortably in the highest circles of US society and politics, will remain free on a US$5 million bond until they are sentenced.