Enron's Lay surrenders to face charges
(Agencies)
Updated: 2004-07-08 21:36

Former Enron Corp. CEO Kenneth Lay surrendered Thursday, and the government unsealed an indictment charging him in a wide-ranging scheme to deceive the public, company shareholders and government regulators about the energy company that he founded and led to industry prominence before its collapse.

The federal indictment adds 11 counts against Lay to charges already filed against his hand-picked protege, former CEO Jeffrey Skilling, and former top Enron accountant Richard Causey.

Former Enron chief executive Kenneth Lay listens to opening statements before the Senate Committee on Commerce Science and Transportation February 12, 2002 in Washington, DC. Ken Lay was indicted by a grand jury in connection with the fraud that led to the collapse of the giant energy firm, news reports said. [AFP]

It accuses Lay of participating in a conspiracy to manipulate Enron's quarterly financial results. It also accuses him of making public statements about Enron's financial performance that were false and misleading and omitting facts necessary to make financial statements accurate and fair.

In a separate action, the Securities and Exchange Commission filed civil charges Thursday against Lay, accusing him of fraud and insider trading and seeking recovery of more than $90 million in what the agency said were illegal proceeds from stock sales.

The contents of the criminal indictment, returned Wednesday, were released a few hours after Lay was taken away in handcuffs after surrendering to the FBI Thursday morning.

The indictment of Lay, 62, who also was Enron's chairman, caps an investigation that snared dozens of other employees and executives but took nearly three years to reach the man at the top.

Enron's collapse in late 2001 cost investors billions of dollars, put thousands of Enron employees out of work and wiped out retirement savings for many. The company, once admired, became a symbol of corporate greed and excess, and its fall was followed by a string of scandals at other companies.

"Nice of you all to show up this morning," Lay, accompanied by a pastor, told a throng of reporters before entering the FBI offices. About 20 minutes later, he left in handcuffs for the trip to the federal courthouse and a scheduled late morning appearance before a federal judge.

The indictment accused Lay, Skilling and Causey of enriching themselves through salaries, bonuses, grants of stock and stock options.

It specifically names Lay in 11 counts: one count of conspiracy, two of wire fraud, four of securities fraud, one bank fraud and three of making false statements to banks.

According to the Justice Department, Lay faces a maximum of 175 years in prison if convicted on all counts as well as fines possibly totaling more than $5.7 million.

After learning of the indictment on Wednesday, Lay said in a statement, "I have done nothing wrong, and the indictment is not justified."

Lay's attorney, Michael Ramsey, said he would push for the former Enron chief executive to go to trial ahead of other executives charged in the investigation. He maintains Lay did nothing wrong and cast blame on former chief financial officer Andrew Fastow, who pleaded guilty to two conspiracy counts in January. Fastow admitted to orchestrating partnerships and financial schemes to hide Enron debt and inflate profits while pocketing millions of dollars for himself.

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