So I guess this puts an end to any civil suit against him to recover the lost millions. That would seem to be a good reason for suicide or maybe it's a combination disappearance and coincident homicide of a look-alike. With the kind of coin he had, I have no doubt something like that could be arranged. If I were among the attorneys representing shareholders, I would demand DNA evidence of his demise.
I don't immediately know of any impediment to the continuation of civil actions that are already pending. They should be able to proceed against the estate.
However, there are some interesting Fifth Circuit decisions relating to the validity of a criminal conviction if the defendant dies during the course of appellate proceedings.
Under the Fifth Circuit's law of abatement of a criminal conviction when a defendant dies before appellate review of the conviction, "It is well established in this circuit that the death of a criminal defendant pending an appeal of his or her case abates, ab initio, the entire criminal proceeding." United States v. Asset, 990 F.2d 208 (5th Cir. 1993).
And in a recent Fifth Circuit decision, United States v. Estate of Parsons, 367 F.3d 409 (5th Cir. 2004), the court explained that "the appeal does not just disappear, and the case is not merely dismissed. Instead, everything associated with the case is extinguished, leaving the defendant as if he had never been indicted or convicted."
In Parsons, the court vacated a forfeiture order, which means that the government's forfeiture claim against Lay for $43.5 million could be dismissed. The Fifth Circuit explained the rationale for the rule: "The finality principle reasons that the state should not label one as guilty until he has exhausted his opportunity to appeal. The punishment principle asserts that the state should not punish a dead person or his estate."
An interesting question is whether one can still describe Lay as having been convicted of a crime, at least in a technical sense, because the law no longer recognizes there having been any criminal case initiated against him.
If there is no underlying criminal conviction, then the favorable presumptions that would otherwise exist in pending civil actions would be expunged, making such actions harder to prosecute.
Civil suits can continue-- his estate will be substituted as defendant.
The criminal case, on the other hand, will be dismissed-- the Government is not allowed to collect criminal fines from the estate of a dead man.