Ken Lay's Estate

A legal expert says Enron founder Ken Lay's reported death has nullified Lay's recent fraud and conspiracy convictions, and it will complicate the government's efforts to get restitution from Lay's estate. Houston Public Radio's Jim Bell reports.

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Just last week, federal prosecutors filed motions to get Lay and co-defendant Jeff Skilling to pay the government 183 million dollars it says were ill-gotten gains from the fraud they were found guilty of committing at Enron. Houston attorney Joel Androphy say Lay's death throws a big monkey wrench into that effort because the law says Lay is now not guilty of anything. His conviction is now null and void.

"A death of a criminal defendant pending an appeal abates the entire criminal proceeding. Everything associated with the case is extinguished, leaving the defendant as if he had never been indicted or convicted. That includes orders of forfeiture. So at this juncture, they're gonna have to pursue the Lay family in civil court."

Along with all the companies and individuals who've filed civil lawsuits against Lay. Androphy says none of this will stop the government's efforts to get restitution from the estate.

"It starts the whole process all over again, and it's civil and they can't use the criminal conviction as leverage. That's exactly what they were trying to do the other day when they were going after them for a $180 million money judgement."

South Texas College of Law Dean Gerald Treece agrees that Lay's death will make it harder for the government to get Lay's property, because it's now part of his estate and the law gives his widow some exemptions from forced forfeiture. The government is now just one more creditor entitled to file claims on the estate. Treece says he was shocked and surprised to learn of Lay's death because Lay appeared to be in good health during his trial. He also thinks Lay's downfall is a classic example of being done in by bad choices.

"Most of us do pretty good on the big stuff. It's the little stuff that comes to get you. And I think the small things, the Sherron Watkins testimony during the trial indicated that Ken Lay could have been a real hero here, but he made some choices and those choices led to some really bad results for him and his family."

Treece says Lay's family and heirs will be dealing with this in court for a long time. Jim Bell, Houston Public Radio News.

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