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Judge Vacates Rulings Against Enron's Lay

Wade Goodwyn Reports

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The convictions against former Enron CEO Ken Lay, who died earlier this summer, have been vacated by a federal judge in Houston.

Convicted of fraud and conspiracy after the collapse of the Houston-based energy giant, Lay died in July of heart disease while vacationing in Aspen, Colo. — before he had a chance to appeal.

In his ruling, which declares Lay an innocent man, U.S. District Judge Sim Lake cited a decision by the 5th U.S. Circuit Court of Appeals. In that case, a defendant's death before the appeals process has been exhausted is grounds for throwing out a conviction.

Lake's decision to clear Lay's name from convictions of fraud, conspiracy and lying attached to it means that the federal government will not seek $43 million it says Lay earned through fraud. But Lay's estate remains susceptible to claims made in civil court.