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03:45 PM CDT on Tuesday, October 17, 2006
Associated Press
HOUSTON - A federal judge Tuesday vacated the conviction of Enron founder Kenneth Lay who died in July, wiping out a jury's verdict that he committed fraud and conspiracy in the months before his company's collapse.
Lay was convicted of 10 counts of fraud, conspiracy and lying to banks in two separate cases on May 25. He died of heart disease July 5 while vacationing with his wife, Linda, in Aspen, Colo.
U.S. District Judge Sim Lake, in a ruling Tuesday, agreed with Lay's lawyers that his death required erasing his convictions. They cited a 2004 ruling from the 5th U.S. Circuit Court of Appeals that found that a defendant's death pending appeal extinguished his entire case because he hadn't had a full opportunity to challenge the conviction and the government shouldn't be able to punish a dead defendant or his estate.
Tuesday's ruling thwarts the government's bid to seek $43.5 million in ill-gotten gains prosecutors allege he pocketed by participating in Enron's fraud. The government could still pursue those gains in civil court, but they would have to compete with other litigants, if any, also pursuing Lay's estate.
Prosecutors asked Lake to delay this ruling until Monday, the scheduled sentencing date, so Congress can consider legislation from the Justice Department that changes current federal law regarding the abatement of criminal convictions. Congress recessed for the elections without considering the legislation.
"Certain provisions of the (legislation) would be directly relevant to the situation presented by defendant Lay's death," prosecutors Sean Berkowitz and John Hueston wrote in their motion. "For example ... the (legislation) provides that the death of a defendant charged with a criminal offense shall not be the basis for abating or otherwise invalidating either a verdict returned or the underlying indictment."
Enron crumbled into bankruptcy proceedings in December 2001, obliterating thousands of jobs and $60 billion in market value.
Lay's co-defendant, former Enron chief executive Jeffrey Skilling, is scheduled to be sentenced on Monday.
Associated Press
HOUSTON - A federal judge Tuesday vacated the conviction of Enron founder Kenneth Lay who died in July, wiping out a jury's verdict that he committed fraud and conspiracy in the months before his company's collapse.
Lay was convicted of 10 counts of fraud, conspiracy and lying to banks in two separate cases on May 25. He died of heart disease July 5 while vacationing with his wife, Linda, in Aspen, Colo.
U.S. District Judge Sim Lake, in a ruling Tuesday, agreed with Lay's lawyers that his death required erasing his convictions. They cited a 2004 ruling from the 5th U.S. Circuit Court of Appeals that found that a defendant's death pending appeal extinguished his entire case because he hadn't had a full opportunity to challenge the conviction and the government shouldn't be able to punish a dead defendant or his estate.
Tuesday's ruling thwarts the government's bid to seek $43.5 million in ill-gotten gains prosecutors allege he pocketed by participating in Enron's fraud. The government could still pursue those gains in civil court, but they would have to compete with other litigants, if any, also pursuing Lay's estate.
Prosecutors asked Lake to delay this ruling until Monday, the scheduled sentencing date, so Congress can consider legislation from the Justice Department that changes current federal law regarding the abatement of criminal convictions. Congress recessed for the elections without considering the legislation.
"Certain provisions of the (legislation) would be directly relevant to the situation presented by defendant Lay's death," prosecutors Sean Berkowitz and John Hueston wrote in their motion. "For example ... the (legislation) provides that the death of a defendant charged with a criminal offense shall not be the basis for abating or otherwise invalidating either a verdict returned or the underlying indictment."
Enron crumbled into bankruptcy proceedings in December 2001, obliterating thousands of jobs and $60 billion in market value.
Lay's co-defendant, former Enron chief executive Jeffrey Skilling, is scheduled to be sentenced on Monday.
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