Posted on 12/01/2007 4:36:51 PM PST by BGHater
Widow's filing answers complaint that seeks assets
The widow of former Enron Chairman Ken Lay denies he committed any crimes, according to a filing Friday in the government's civil forfeiture case that is seeking nearly $13 million from his estate, including the upscale condominium they shared.
On Nov. 14, U.S. District Judge Ewing Werlein Jr. denied Linda Lay's request to dismiss the case, which was filed after Ken Lay died of heart disease in July 2006.
Werlein concluded that the government had made "ample allegations" of criminal activity tied to the cash and property in question and could pursue the case.
Linda Lay's filing Friday answers the government's original forfeiture complaint, which alleges Ken Lay's estate contains ill-gotten gains subject to seizure.
The filing said Linda Lay "denies any criminal activity on the part of Kenneth L. Lay, including his alleged participation in securities fraud, wire fraud, conspiracy or money laundering."
In addition, she denies that any property sought by the government was acquired with ill-gotten money. She is identified in the filing as an "innocent owner" of the property the government aims to seize, with no knowledge of "fraudulent and conspiratorial activities" alleged by prosecutors.
The U.S. Justice Department declined comment.
Lay died about six weeks after he was convicted of six counts of fraud and conspiracy for crimes at Enron and four counts of bank fraud and lying to banks in a separate case stemming from his personal banking. He was never charged with money laundering in a criminal case.
Former CEO Jeff Skilling was convicted of 19 crimes alongside Lay in the larger fraud and conspiracy trial, and is in federal prison while his case is appealed.
Because Lay's death came before he had been sentenced or launched an appeal, U.S. District Judge Sim Lake wiped his record clean more than a year ago.
With his convictions erased, the government would have to reprove his guilt to win the right to seize his estate's assets at a trial in the forfeiture case. The burden of proof in a civil case isn't as stringent as in a criminal case.
Both sides have asked for a jury trial, but no date has been set.
Specifically, the government contends that Ken Lay gained $99 million from criminal activity, mostly by repaying Enron loans with company stock throughout 2001 when the company was in financial trouble.
Prosecutors say they can trace and recover nearly $13 million of that — including $2.5 million Lay used to pay off the mortgage on the couple's condominium days after Enron went bankrupt.
The rest includes $10 million that was controlled by a partnership named for the couple and about $22,000 in a bank account.
Harris County tax records show the condominium is appraised at about $6 million.
kristen.hays@chron.com
Linda Lay’s gotta be one of the luckiest women in the history of the world.
I don’t see how they can seize anything from the partnership.
By law she is technically correct. Since her husband hadn’t exhausted his appeals before he died, his conviction was not final. Technical he was not convicted of any crimes because the appeal was still pending. As a result, she may prevail in keeping the loot. Who says, “Crime doesn’t pay?”
Wow.......justice got Lay’d !
amazing.......
how interesting...I was just discussing this with my students today in our Principles of Business class...what a hoot...yes, agreed, she is absolutely the most fortunate of persons...there was a fairly robust approach to how she may have helped Ken meet his end...I’m gonna have to get another beer...this is great....
Oh yeah! This scenario could be a "Murder She Wrote" movie.
Love your page...reminds me of my time, 40 years ago, in the Marine Corps - a bunch of us Lance Corporals (E-3) got a prick of a Staff Sergeant (E-6) transferred into our Camp Pendleton unit....turned out he was a total drunk, and within 6 months got demoted, demoted, demoted to buck-ass private E-1............it was a hoot seeing this clown "obey" us, his former victims. He was a lifer, so he had no choice, unless he wanted to forego his hoped-for pension.
I’ll always remember the first question of the sheriff of the Colorado
town after being told Ken Lay had died:
“Are you SURE that it’s him (Ken Lay)?”
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