Kenneth Lay’s Conviction Erased From Record

By dying before he started serving his sentence, Ken Lay may have cheated justice. Now, his record has been wiped clean, removing whatever small comfort Enron’s victims might have gotten from his conviction.

A federal judge in Houston this afternoon wiped away the fraud and conspiracy conviction of Kenneth L. Lay, the Enron Corp. founder who died of heart disease in July, bowing to decades of legal precedent but frustrating government attempts to seize nearly $44 million from his estate.

The ruling worried employees and investors who lost billions of dollars when the Houston energy trading company filed for bankruptcy protection in December 2001. It also came weeks after Congress recessed for the November elections without acting on a last-ditch Justice Department proposal that would have changed the law to allow prosecutors to seize millions in investments and other assets that Lay controlled.

With the judge’s order, Lay’s conviction on 10 criminal charges will be erased from the record. “The indictment against Kenneth L. Lay is dismissed,” U.S. District Judge Simeon T. Lake III wrote in a spare, 13-page order.


Legal analysts said the ruling by a federal judge in Houston closely hewed to long-held doctrine, which allows defendants to vacate their convictions if they die before they are able to exercise their right to appeal. The law hesitates to punish the dead, the analysts said.Samuel J. Buffone, a Washington-based lawyer for Lay, said, “We’re very pleased with the ruling and are glad that the criminal case against Mr. Lay is at an end.”

Separately, lawyers for the Lay family Tuesday asked the court to release a $5 million bond that was secured by the homes of several of Lay’s children.

Regulators at the Securities and Exchange Commission can still pursue their civil case against Lay’s estate, but their task will be more difficult because they can no longer introduce the fact of his conviction and instead must prove all over again that he broke the law. The SEC case has been stayed pending resolution of the criminal issues, an agency spokesman said.

This is quite a bizarre practice, longstanding or no. The burden of proof during an appeal is on the convict, not the state. Further, the question of fact–whether the convict committed the crime–is no longer at issue on appeal, merely issues of process.

UPDATE: Ironically, this happened the same day as a NYT piece by Adam Liptak reporting that “enormous commercial databases are fast undoing the societal bargain of expungement, one that used to give people who had committed minor crimes a clean slate and a fresh start.”

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Fersboo says:

    …small comfort Enron’s victims might have gotten from his conviction.

    Would that include as ‘victims’, those employees which participated(the fake trading room) in the fraud?

  2. Wayne says:

    “the question of fact—whether the convict committed the crime—is no longer at issue on appeal”.

    Not true. Yes they do concentrate on the process and often a truly guilty party will get off on a technicality but sometimes an innocent person can show that they were wrongly convicted. The whole reason for the appeals process is to counter-balance against kangaroo or jury-rig courts.

    It is not for the purpose of a retrial of the person but to determine if he was fairly tried in the first place.