Handcuffed ex-Enron boss is charged
THE former chairman of fraud-ridden, bust energy group Enron left the Houston, Texas, office of the FBI in handcuffs today after turning himself in.
Kenneth Lay, alleged to be at the centre of the Enron accounting scandal, surrendered to the FBI at dawn and left soon after for the city's federal courthouse.
Driven to the FBI headquarters by his wife and accompanied by the minister of his local church, Lay greeted thronging reporters with a prepared statement saying: 'I have done nothing wrong and the indictment is not justified.'
A federal grand jury had laid a sealed indictment against Lay after a two-and-a-half-year investigation.
Today federal prosecutors charged him with 11 criminal counts, including wire fraud, securities fraud and making false and misleading statements.
The US financial regulator, the Securities and Exchange Commission, was also expected to bring separate civil charges against Lay.
Houston-based Enron was the seventh-largest publicly-owned firm in the US when it collapsed in 2001 after hiding billions of dollars in debt and inflating profits.
Lay is the latest in a string of Enron executives to be charged in the affair and his indictment follows the breakthrough by prosecutors who made a deal with former chief financial officer Andrew Fastow.
He pleaded guilty in January and has been co-operating with prosecutors. That has led to charges against Lay's hand-picked successor, Jeff Skilling, who unexpectedly quit in August 2001, six months after becoming chief executive.
He and former chief accountant Rick Causey deny dozens of counts of insider trading, fraud and lying on Enron financial statements.
Prosecutors contend Skilling and Causey knew Fastow ran partnerships that helped Enron hide debt and inflate profits and both secretly promised Fastow his partnerships wouldn't lose money in deals with Enron.
The Enron affair was followed by a wave of scandals across corporate America, many resulting in bankruptcy and still working their way through the courts.
Lay's indictment could also have political ramifications. He is a close friend of President Bush. On the campaign trail yesterday, Bush walked away and refused to answer questions put to him about Lay's indictment.
Enron was very much Lay's baby. As head of then Houston Natural Gas in 1985, he created the merger that formed Enron, using his close connections to Bush and his father, the former president, to deregulate natural gas markets.
That deregulation paved the way for the freewheeling electricity trading of the 1990s - a market that Enron's collapse and the California power crisis of 2000-01 destroyed.
Lay said recently that his personal fortune once stood at $400m (£217m), but had dropped below $20m because most of his holdings were in now worthless Enron stock
