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Enron ceo ken lay to face criminal charges { July 7 2004 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A34720-2004Jul7.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A34720-2004Jul7.html
Former Enron CEO to Face Criminal Charges
By Carrie Johnson
Washington Post Staff Writer
Wednesday, July 7, 2004; 5:27 PM
Federal prosecutors are preparing to announce criminal charges against former Enron Corp. chief executive Kenneth L. Lay as early as Thursday, according to sources involved in the two-and-a-half year old investigation.
Lay, 62, has been under government scrutiny since the dramatic collapse of the energy giant in December 2001. In recent months, a grand jury in Houston has heard evidence from a series of former employees who allegedly alerted Lay to mounting financial problems that summer. Lay, who founded Enron and built it into a large energy trader before stepping down as CEO, took over again as chief executive in August, after the sudden resignation of his successor.
The exact charges could not be determined. The Houston Chronicle reported on its Web site late this afternoon that the Enron grand jury had handed down a sealed indictment. Investigators have probed a series of optimistic statements Lay made to analysts and employees in the months before Enron filed for bankruptcy protection, which cost thousands of workers their jobs and pension savings. Lay also sold millions of dollars of Enron stock back to the company between August and December 2001, using a revolving line of credit as an "ATM machine," in the words of one board member.
Lay has strongly denied wrongdoing through his lawyer Michael Ramsey, who told The Washington Post last month that Lay had been duped by underlings and that he sold stock only to cover losses in volatile technology investments. Moreover, Ramsey said, Lay held on to millions of dollars of Enron shares as the stock price dropped, losing potential profits in the process.
A spokeswoman for Lay declined comment, as did prosecutors, who are barred from talking about pending charges.
So far the Justice Department's Enron Task Force has charged 30 other people connected to the company with conspiracy and other crimes, 11 of whom have been found or pleaded guilty. Among the government's chief cooperating witnesses are former chief financial officer Andrew S. Fastow, former treasurer Ben F. Glisan, and former corporate secretary Paula H. Rieker.
The Securities and Exchange Commission will bring related civil charges against Lay, according to the sources, who spoke only on condition of anonymity because of the secrecy cloaking grand jury proceedings. During Enron's heyday, when the firm reported revenues that ranked it seventh on the Fortune 500 list of publicly-traded companies, Lay cultivated close ties to the Bush administration and traveled the world to meet with power brokers and charity leaders.
Charges against Lay could be added to a case filed earlier this year against his former protege, Jeffrey K. Skilling, and former Enron chief accounting officer Richard A. Causey. Skilling and Causey, who have denied wrongdoing, could face trial as early as 2005.
© 2004 The Washington Post Company
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