The Hindu : International : Former Enron chief accused in wide-ranging indictment

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Friday, Jul 09, 2004

International

International

Former Enron chief accused in wide-ranging indictment

HOUSTON, JULY 8. The former Enron CEO, Kenneth Lay, was involved 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 in 2001, according to an 11-count indictment unsealed on Thursday.

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

It accuses Mr. Lay of participating in a conspiracy to manipulate Enron Corp.'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.

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

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

It specifically names Mr. 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.

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

Mr. Lay's attorney, Michael Ramsey, said he would push for the former Enron chief executive to go trial ahead of other executives charged in the investigation.

He maintains Mr. Lay did nothing wrong and cast blame on the former chief financial officer Andrew Fastow, who pleaded guilty to two conspiracy counts in January. Mr. Fastow admitted to orchestrating partnerships and financial schemes to hide Enron debt and inflate profits while pocketing millions of dollars.

``Andy is obviously a liar and a thief,'' Mr. Ramsey said before entering the courthouse on Thursday.

``He admits that.''

Prosecutors from the Justice Department's Enron Task Force presented an indictment to the U.S. Magistrate Judge Mary Milloy in Houston on Wednesday, and at their request she sealed both the indictment and an arrest warrant.

The Securities and Exchange Commission also was expected to bring civil fraud charges against Mr. Lay on Thursday, including making false and misleading statements and insider trading, a person familiar with the case said, speaking on condition of anonymity. — AP

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