The agony and the extacy....and some interview love for Daily Caveat amigo, Peter Henning of the White Collar Crime Prof Blog, via USAToday.com:

Sentence's message: Crime doesn't pay

By Greg Farrell
USA TODAY

NEW YORK — One win, one loss and one big trial to go.

That's essentially where the Justice Department's war on corporate crime stands after Wednesday's stiff jail sentence for former WorldCom CEO Bernie Ebbers and the decision by an Alabama prosecutor to give up completely on any further criminal charges against former HealthSouth CEO Richard Scrushy.

Other corporate fraud prosecutions continue in Denver, New York and elsewhere, but the final hurdle in the campaign against accounting fraud in Corporate America will be in January, when the trial of Enron's top three former executives — Ken Lay, Jeff Skilling and Rick Causey — begins in Houston.

"That's going to be the climax" of the government's campaign against corporate crime, says Peter Henning, a law professor at Wayne State University. "But the sentence for Ebbers may well be the high-water mark."

Even with some of the government's misfires, Ebbers' 25-year prison sentence has alerted corporate executives that crime doesn't pay, says Tom Newkirk, a former associate director of enforcement at the Securities and Exchange Commission who is now at Jenner & Block.

"For those who aren't motivated by doing the right thing for its own sake, the efforts of the Justice Department and the SEC over the last three years ought to strike the fear of God into them," he says.

According to Jacob Frenkel, a former prosecutor now at Shulman Rogers, "The ultimate objective of the deterrent effect has been achieved."

But the announcement Wednesday by Alice Martin, the U.S. Attorney in Birmingham, Ala., that she would not pursue any more criminal charges against Scrushy showed that prosecutors don't always get their way. Two weeks ago, Scrushy was acquitted of masterminding a $2.7 billion fraud at his company, even though five former chief financial officers testified against him.

Full article appears here.

-- MDT

Labels: 2006, Health South, Peter Henning