Judge posthumously annuls conviction of Enron’s Lay

CHICAGO – A judge on Tuesday dismissed the conviction of Enron founder Kenneth Lay, who became a symbol of corporate malfeasance in the US, because he died before he had a chance to appeal.

The decision by a federal judge in Houston, Texas, means Lay’s estate will not have to forfeit tens of millions of dollars that the court had determined were fraudulently obtained. Thousands of people who lost their jobs and life savings when the Houston-based energy giant collapsed in 2001, however, will still be able to sue Lay’s estate in civil court.Enron collapsed with an estimated US$40 billion in debt hidden through complicated investment strategies obscured in its financial statements.The corporate bankruptcy, then the largest in US history, rattled stock and energy markets and undermined public confidence in the business sector.Lay was convicted of six counts of fraud on May 25 and died of a massive heart attack on July 5.Former Enron chief executive Jeffrey Skilling, who was found guilty of 19 of 28 counts of fraud and conspiracy and faces a maximum penalty of 185 years in jail, will be sentenced on Monday.Prosecutors of Lay had argued against his family’s request to vacate the sentence “on grounds that the Lay Estate should not be unjustly enriched with the proceeds of fraud that would otherwise be subject to forfeiture and distributions to Lay’s victims.”Judge Sim Lake ruled that since Lay had died before he was sentenced or given the opportunity to appeal, and court precedent does not “allow the court to enter an order of restitution against Lay’s estate,” the conviction must be thrown out.Nampa-AFPThousands of people who lost their jobs and life savings when the Houston-based energy giant collapsed in 2001, however, will still be able to sue Lay’s estate in civil court.Enron collapsed with an estimated US$40 billion in debt hidden through complicated investment strategies obscured in its financial statements.The corporate bankruptcy, then the largest in US history, rattled stock and energy markets and undermined public confidence in the business sector.Lay was convicted of six counts of fraud on May 25 and died of a massive heart attack on July 5.Former Enron chief executive Jeffrey Skilling, who was found guilty of 19 of 28 counts of fraud and conspiracy and faces a maximum penalty of 185 years in jail, will be sentenced on Monday.Prosecutors of Lay had argued against his family’s request to vacate the sentence “on grounds that the Lay Estate should not be unjustly enriched with the proceeds of fraud that would otherwise be subject to forfeiture and distributions to Lay’s victims.”Judge Sim Lake ruled that since Lay had died before he was sentenced or given the opportunity to appeal, and court precedent does not “allow the court to enter an order of restitution against Lay’s estate,” the conviction must be thrown out.Nampa-AFP