Thursday, August 10, 2006

Vacating Lay's Indictment and Conviction

The Houston Chronicle reports (here) that former Enron CEO Ken Lay's appellate attorney has moved to appear before the federal district court on behalf of his estate to seek dismissal of the indictment and conviction against him.  As discussed in an earlier post (here), under the abatement doctrine as applied in the Fifth Circuit, a defendant who dies before having his first appeal as of right decided by the court of appeals can move to have the case expunged.  An attorney usually must represent a party to appear in a proceeding, so this procedural step is necessary before U.S. District Judge Sim Lake can issue the order to remove Lay's indictment and conviction from the record. 

With the criminal conviction abated, the Enron Task Force is limited to a civil asset forfeiture action under 18 U.S.C. Sec. 981 if it wants to pursue that route to obtain property traceable to the violations from Lay's estate.  One limitation on civil asset forfeiture actions is that the government can only obtain "[a]ny property, real or personal, which constitutes or is derived from proceeds traceable to a violation" but not substitute assets.  Also, a claimant to the property can raise an "innocent owner" defense to the forfeiture under Sec. 983(d).  All in all, civil asset forfeiture is not as simple as a criminal forfeiture after a conviction, especially because the government will have to prove the underlying violation by Lay all over again, without the benefit of using the criminal conviction as proof that the assets are forfeitable.  In the end, it may not be worth the effort to pursue the asset forfeiture further, but that decision will come another day. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/08/vacating_lays_i.html

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