David E. Rovella
Ex-Enron Chief Lay's Indictment to Be Announced
Wed Jul 7, 2004 17:31
64.140.158.42

Ex-Enron Chief Lay's Indictment to Be Announced, Person Says
http://quote.bloomberg.com/apps/news?pid=10000006&sid=adPpw9oQihQg&refer=home

July 7 (Bloomberg) -- The U.S. government is expected to announce tomorrow the indictment of former Enron Corp. chairman Kenneth Lay for his alleged role in an accounting fraud that drove the former energy trader into bankruptcy, a person familiar with his case said.

Lay, who was also chief executive, presided over the Houston- based company while former Chief Financial Officer Andrew Fastow used off-the-books partnerships to hide Enron's debt and inflate income. In December 2001, the company, which cost investors an estimated $30 billion in stock losses, filed what was then the largest bankruptcy in U.S. history.

Lay, 62, a friend of President George W. Bush and a contributor to his political campaigns, will be charged with fraud and insider trading, the person said. In February former chief executive Jeffrey Skilling, 50, was indicted on similar charges. In January Fastow, 42, pleaded guilty to his role in the fraud. The government's Enron Task Force has investigated the company's collapse for 2 1/2 years, the first probe in a wave of corporate frauds that also struck WorldCom Inc., HealthSouth Corp. and Tyco International Ltd.

``The indictment of Lay brings full circle the season of corporate scandals that was touched off by the implosion of Enron,'' former federal prosecutor Robert Mintz said.

Financial news network CNBC reported today that Lay had been indicted by a grand jury in Houston and would surrender to authorities tomorrow, citing unidentified persons familiar with the situation. CNBC did not specify the charges.

To contact the reporter on this story:
David E. Rovella in New York at drovella@bloomberg.net .

To contact the editor of this story:
Patrick Oster at poster@bloomberg.net

Last Updated: July 7, 2004 16:19 EDT

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