Criminals in white collars beware

WHITE collar criminals in Ireland face a maximum jail term of 10 years in sharp contrast with the life sentences handed down to the leading executives of Enron in the US on Thursday.

Here the Director of Corporate Enforcement, Paul Appleby, said yesterday he was satisfied with the legal framework in place to tackle white collar crime.

Despite the life sentences passed on top Enron bosses Ken Lay and Jeffrey Skilling Mr Appleby said the maximum 10 year sentence for Irish fraudsters, which applies in a limited number of cases, was adequate.

Speaking to RTÉ Mr Appleby said “the office has been very successful in the last number of years in convicting almost 200 companies and individuals, securing disqualification of 25 individuals and supervising a regime which has seen some 600 directors restricted since 2002.”

He also defended the regime here saying “I think things have improved enormously in Ireland over the last five years. Our own research at the end of last year indicates that three out of four directors believe that the company compliance environment has improved in the last five years. The number who think it has decreased is only 2%, so I think there has been a huge cultural change brought about”.

Meanwhile Enron founder Lay, surrendered his passport and posted a $5 million bond secured with property at a hearing following Thursday’s verdict.

The life sentences reflected the aggressive attitude now being adopted to white-collar crime in the US while few, if any corporate criminals, get even a modest jail sentence in this country.

Following their sentencing the two Enron chiefs, once dubbed “visionaries” by the US markets expressed shock as the verdicts handed down.

Lay and Jeffrey Skilling who were known as visionaries, hands-on executives and corporate titans directing their high-flying ship, Enron, were brought down to earth with a bang Thursday afternoon.

Speaking after the verdict a shaken Mr Lay said “certainly we’re surprised. I think it’s more appropriate to say we’re shocked. This is not the expected outcome”.

The Enron collapse wiped out more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.

The conspiracy conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corporation and homemaking legend, Martha Stewart.

The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley Act, designed to make company executives more accountable.