Kenneth Lay and Jeffrey Skilling were convicted of conspiracy and fraud Thursday by a federal jury that laid blame for one of the biggest business scandals in US history squarely on Enron Corp.'s two former top executives.

Former Enron CEO Jeff Skilling (L) faces the media outside the Bob Casey US Courthouse with his attorney Daniel Petrocelli (R) after the end of his fraud and conspiracy trial, in Houston. After 16 weeks of testimony and six days of deliberation, the jury found Skilling guilty on 19 of 28 counts. [AFP]

Jurors found that the once-wealthy and powerful corporate chiefs repeatedly lied to cover up accounting tricks and business failures that led to its 2001 demise. The collapse wiped out more than $60 billion in market value, almost US$2.1 billion in pension plans and 5,600 jobs.

The verdict came in the sixth day of deliberations following a criminal trial that lasted nearly four months. Lay was also convicted of bank fraud and making false statements to banks in a separate, non-jury trial before U.S. District Judge Sim Lake related to Lay's personal finances.

The conspiracy conviction was a major win for the government, serving almost as a bookend to an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corp. and homemaking maven Martha Stewart. The public outrage over the string of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable.

"The jury's verdicts help to close a notorious chapter in the history of America's publicly traded companies" said Rep. Michael Oxley (news, bio, voting record), R-Ohio, co-author of the Sarbanes-Oxley legislation. "Appeals aside, the end of the trial will mark the end of a dark era."

Lay was convicted on all six counts of conspiracy, securities and wire fraud against him in the corporate trial and all four in the personal banking trial. Former Chief Executive Skilling was convicted on 19 of the 28 counts in the corporate trial, including one count of insider trading, and acquitted on the remaining nine.

Lake set sentencing for Sept. 11. The charges against Lay, who is 64, carry a maximum penalty in prison of 45 years for the corporate trial and 120 years in the personal banking trial. The charges against Skilling, 52, carry a maximum penalty of 185 years in prison.

As Lake read the verdict from the bench, Lay tossed his head at hearing the first "guilty" on the conspiracy count. He clutched his wife's hand as he heard that word over and over again.

Lay sat with his wife, Linda; his daughter, Elizabeth Vittor, a member of his defense team; and Linda Lay's daughter, Robyn. As Lay clutched Linda Lay's hand, the three women leaned forward and began to sob quietly.

After Lake left the courtroom, Lay's family and some friends gathered around him as the ex-chairman, red-faced and fighting back tears, hugged them and thanked them for their support.

Skilling, sitting with his brother, Mark, showed no emotion when the verdict was read.

The sentencing will come five years almost to the day after Skilling sold 500,000 shares of Enron stock for $15.5 million, for which he was convicted of insider trading.

"Obviously, I'm disappointed," Skilling told reporters outside the courthouse. "But that's the way the system works."

"We're going to stand behind him," his lawyer, Daniel Petrocelli, said. "As I told him, we've just begun to fight."

Skilling's $5 million bond, which restricts him to the continental U.S., remains in effect. Lay, who surrendered his passport, posted a $5 million bond secured with family-owned properties at a hearing following the verdict.

The Enron founder was also ordered to stay in the Southern District of Texas or Colorado, avoid contact with any victim of the offense charged, report to pre-trial services regularly and must not own a gun or use alcohol excessively or drugs.

"I firmly believe I'm innocent of the charges against me," Lay said following the hearing. "We believe that God in fact is in control and indeed he does work all things for good for those who love the lord."

Jurors found through their verdict that both men had repeatedly lied to cover a vast web of unsustainable accounting tricks and failing ventures at Enron.

Both men testified in their own defense. But the panel rejected Skilling's insistence that no fraud occurred at Enron other than that committed by a few executives skimming millions in secret side deals, and that bad press and poor market confidence combined to sink the company.

"I wanted very, very badly to believe what they were saying, very much so, and there were pieces in the testimony where I felt their character was questioned," juror Wendy Vaughan said after the verdict was announced.

Philip Hilder, a former federal prosecutor who represents ex-Enron finance executive Sherron Watkins, said the convictions were "absolutely a comprehensive government victory," particularly given the speed of the jury's decision. Watkins tried to warn Lay of financial problems in the fall of 2001.

Hilder said that both men likely face "north of 20 years" in prison.

Lay was a campaign benefactor who President Bush nicknamed "Kenny Boy" when the two were up-and-comers in Texas. The Center for Public Integrity, a Washington-based nonprofit group, said the Lays had given $139,500 to Bush's political campaigns over the years.Those donations were part of $602,000 that Enron employees gave to Bush's various campaigns, making the company the leading political patron for Bush at the time of the company's bankruptcy in 2001.

Early in 2002, the White House discloses that Lay sought help from two Cabinet members shortly before the company collapsed, but neither offered aid.

Speaking for the president on Thursday, White House press secretary Tony Snow congratulated the Justice Department on "successfully concluding a highly complex conviction."

The government's victory caps a 4 1/2 year investigation that garnered 16 guilty pleas from ex-Enron executives, including former Chief Financial Officer Andrew Fastow and former Chief Accounting Officer Richard Causey.

All are awaiting sentencing later this year except for two, who either finished or are still serving prison terms.

"You can't lie to shareholders, you can't put yourselves in front of your employees' interests. No matter how rich and powerful you are, you have to play by the rules," prosecutor Sean Berkowitz told reporters outside the courthouse.

He expressed sympathy for the Enron employees who lost their life savings when the company collapsed.

"Nothing that happened today is going to bring that back for them. ... What we do hope is that today's verdict lets them know that the government will not let corporate leaders violate their trust and get away with it."

Prosecutor John Hueston, who sparred with Lay on the stand, said the founder had missed "a golden opportunity to save Enron.

"He made that choice to put his own interests ahead of that of the shareholders and investors. And he did that by choosing not to tell the unvarnished truth and he did it by choosing not to ask the hard questions."

Asked what was next, Berkowitz joked, "We're probably going to step aside and go get a well-deserved drink and an afternoon off."

The Enron case tested the government's ability to prove complicated corporate skullduggery. Its implosion and the subsequent scandals scared off investors, increased regulatory scrutiny over publicly traded companies and prompted Congress to stiffen white collar penalties.

The vast federal investigation seemed to stall until Fastow pleaded guilty in January 2004 to two counts of conspiracy and paved the way for prosecutors to secure indictments against his bosses. Fastow also led investigators to Causey, who was bound for trial alongside Lay and Skilling until he broke ranks with their unified defense and pleaded guilty to securities fraud just weeks before the trial began.

"This verdict encourages us ... to continue to combat corruption wherever we find it," said Deputy Attorney General Paul McNulty, at the Justice Department in Washington. Attorney General Alberto Gonzales was recused from the Enron case because he once was a partner at Houston law firm Vinson & Elkins LLP, which represented Enron.