The Enron prosecution team on September 6 asked District Judge Sim Lake to delay any ruling on motions by the defense team of the now-deceased Kenneth Lay for dismissal of the former Enron chairman's convictions.
The team wants any possible dismissal rulings delayed until after the sentencing of Lay and his co-defendant, ex-Enron CEO Jeffrey Skilling, which currently is scheduled for October 23.
In a filing with the US District Court for the Southern District of Texas, the prosecution team said that by deferring the ruling "to the time when the court would have originally considered evidence and rendered rulings related to forfeiture and restitution, Congress will be permitted a reasonable opportunity to address the issue of abatement through a legislative proposal that has recently been presented to" it.
Shortly after Lay's July 5 death, his criminal defense team -- which now is acting on behalf of Lay's estate -- notified the government of its intention to file a motion to vacate his convictions and dismiss the indictment.
The defense team later did this, but the government opposes this, the task force said. It believes the estate should not be "unjustly enriched [to the tune of $40 million] with the proceeds of fraud that would otherwise be subject to forfeiture and distribution to Lay's victims."
In most cases, if the defendant dies, then the "judgment is vacated" and the "indictment is dismissed." The prosecution team, however, believes that in this case, the abatement doctrine would "extinguish proof of fraud already established beyond a resonable doubt."
An abatement would lead to a separate civil filing and several years of litigation, but if Lake agrees with the government, this could be avoided. The Department of Justice-crafted legislation aims to protect victims of crime, the prosecution team said in its filing.
On May 25, Lay was found guilty of one charge he shared in a jury trial with Skilling, an overarching securities and wire fraud conspiracy count that suggested the two worked together to deceive investors and enrich themselves.
Lay was found guilty on his own of two charges of wire fraud related to false and misleading statements in employee meetings. These charges, counts 12 and 13 in his trial with Skilling, involve making "deceptive statements" in an Enron Online forum on September 26, 2001, and "deceptive statements" on an employee videoconference in Houston on October 23, 2001.
Lay was found guilty on three charges of lying to credit-rating agencies and securities analysts. These charges, counts 27 through 29 in his trial with Skilling, accused Lay of lying to a ratings agency representative on October 12, 2001; of lying on a third-quarter 2001 analyst conference call on October 16, 2001; and of lying on an analyst conference call on October 23, 2001.
September 8, 2006
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