NY Times: Lay’s death very convenient…


Richard Moore

  from article>
       In yet another bizarre twist to the Enron saga, the sudden
       death of Kenneth L. Lay on Wednesday may have spared his
       survivors financial ruin. Mr. Lay's death effectively voids
       the guilty verdict against him, temporarily thwarting the
       federal government's efforts to seize his remaining real
       estate and financial assets, legal experts say.

  speculation from an internet discussion group>
         Speculation is rife that Lay was murdered by the CIA because
     he was about to cut a deal with prosecutors. In exchange for
     a much shorter sentence, Lay said he was going to reveal
     hitherto undisclosed recordings he made of the secret energy
     policy talks he had with Vice President Dick Cheney at the
     beginning of the Bush presidency. "I made the
     administration's energy policy," Lay said last Monday to
     reporters. "The fix was in, and when the tapes are released
     Bush and Cheney are going down with me." Lay was scheduled
     to be sentenced Oct. 23. He faced decades in prison.

one more 'convenient' death for the neocon pirates...

Original source URL:

July 6, 2006
Lay's Death Complicates Efforts to Seize Assets

HOUSTON, July 5 - In yet another bizarre twist to 
the Enron saga, the sudden death of Kenneth L. 
Lay on Wednesday may have spared his survivors 
financial ruin. Mr. Lay's death effectively voids 
the guilty verdict against him, temporarily 
thwarting the federal government's efforts to 
seize his remaining real estate and financial 
assets, legal experts say.

"The death of Mr. Lay in all likelihood will 
render the government's hard-fought victory 
null," said Christopher Bebel, a former federal 
prosecutor based here who specializes in 
securities fraud.

But while the death of Mr. Lay may have limited 
government efforts in his criminal case, he 
remains the subject of civil lawsuits by the 
Securities and Exchange Commission and former 
investors and Enron employees. Those lawsuits 
could still proceed, with the aim of taking 
control of some of Mr. Lay's remaining assets.

Mr. Lay and Jeffrey K. Skilling, the two chief 
executives who guided Enron through its rise and 
fall, were found guilty in May of fraud and 
conspiracy, and were free on bail pending their 

Just last Friday, the Justice Department had 
moved to seize a total of $183 million in assets 
belonging to the two men.

The bulk of those assets belong to Mr. Skilling. 
Five years ago, Mr. Lay's personal fortune was 
valued as high as $400 million. But a large part 
of that was tied to the value of Enron's stock, 
which is now virtually worthless.

Mr. Lay testified at his trial that his net worth 
had declined to liabilities of $250,000, hampered 
by mounting legal bills and poor-performing 
investments. But his finances were apparently not 
so dire. According to legal documents filed at 
the federal courthouse here Friday, Mr. Lay had 
holdings in an investment account at Goldman 
Sachs valued at $6.3 million.

In addition, prosecutors said that Mr. Lay's 
full-floor luxury apartment in this city's River 
Oaks district had at least $1.5 million in value 
that could be forfeited to the United States.

The government's forfeiture effort ahead of the 
planned sentencing of Mr. Lay and Mr. Skilling 
this fall, however, has been thrown into doubt, 
at least in relation to Mr. Lay's assets since 
the death of a criminal defendant before his 
sentencing and the appeal process may void the 
criminal case against him.

"Technically, he was found guilty, but that's 
extinguished as of today," said Joel M. Androphy, 
a prominent defense lawyer in Houston.

A person involved in the government's action 
against Mr. Lay, who did not want to be 
identified because of the sensitivity of the 
case, said that Mr. Lay's death did not 
necessarily rule out proceeding with forfeiture 
actions, explaining, "The family at the end of 
the day cannot sit on the fruits of the fraud." 
But, this person said: "Even if the verdict is 
nullified, he paid for his actions with his life. 
That is more tragic."

The civil lawsuits against Mr. Lay may continue 
with efforts to seize his remaining assets, but 
even those moves may be complicated by his death 
since technically there was no conviction of Mr. 
Lay in the criminal case to rely upon as proof.

Still, lawyers in the civil lawsuits may proceed 
against Mr. Lay's remaining assets through 
motions inspired by admiralty law. Under that 
law, the government or a private party can take 
action against property (or the ship) without 
going after the owner (the captain), legal 
experts said.

Lawyers involved in the civil lawsuits, however, 
have already signaled that they were more 
interested in seeking compensation from 
institutions with deeper pockets that may have 
profited from improper dealings with Enron, like 
Wall Street investment banks, rather than 
focusing on Mr. Lay. Shortly after Enron filed 
for bankruptcy protection in late 2001, Mr. Lay 
still had extensive real estate holdings, 
including three beachfront homes in Galveston, 
Tex., and two luxury homes in Aspen, Colo., one 
with five bedrooms and the other with four 
bedrooms. All those properties have since been 

Any life insurance policies bought by Mr. Lay may 
also be shielded from federal seizure efforts 
since state laws normally cover such payments. 
While jurors found Mr. Lay guilty, his death may 
also complicate any efforts to go after life 
insurance proceeds, even if the original policies 
were acquired with ill-gotten gains.

Attention now shifts to Mr. Skilling, Mr. Lay's 
protégé. The sentencing of Mr. Skilling is now 
set for October instead of September at the 
request of his Los Angeles-based lawyer, Daniel 
Petrocelli, who had a previously scheduled trial 
involving the rock band The Eagles.

Mr. Skilling has more assets open to federal 
seizure than Mr. Lay had, including more than $50 
million in cash and securities in a Charles 
Schwab account, $4.6 million in value at his 
9,000-square-foot home in Houston and a 
condominium worth nearly $580,000 in Dallas, 
according to the government's forfeiture 

Mr. Petrocelli said the government's efforts to 
go after the assets of his client and those of 
Mr. Lay illustrated an overreaching of federal 
authority. "The issue is the recklessness and 
overzealousness with which the government has 
pursued the Enron case right from the inception," 
Mr. Petrocelli said.

At issue, too, are Mr. Skilling's obligations to 
his lawyers. Mr. Petrocelli's law firm, O'Melveny 
& Myers, is awaiting more than $20 million of 
payments from its client for work carried out 
since last September. "Jeff wants to pay his 
lawyers, to whom he owes tens of millions of 
dollars," Mr. Petrocelli said, "and would like to 
satisfy family obligations including child 

Lawyers for Mr. Lay may also be left with unpaid 
invoices. Michael Ramsey, a lawyer for Mr. Lay 
who experienced his own heart problems during the 
trial, declined to comment on Wednesday, saying 
simply, "I am not well."

For Mr. Skilling, an even more pressing concern 
may be his sentencing before Judge Simeon T. Lake 
III, with sentencing experts saying Mr. Skilling 
could get more than 20 years of jail time in a 
medium- or maximum-security prison, in line with 
federal sentencing guidelines. If anything, Mr. 
Lay's death may warrant even harsher scrutiny of 
Mr. Skilling's crimes by Judge Lake.

"Jeff Skilling is quite literally the last man 
standing in the Enron scandal," said Robert A. 
Mintz, a former federal prosecutor now in private 
practice in New Jersey.

Alexei Barrionuevo contributed reporting for this article.

Copyright 2006 The New York Times Company

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