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USA: Prosecutors On Verge Of Lay Indictment

by Adrian Michaels Financial Times
July 3rd, 2004

Federal prosecutors might be just days away from indicting Ken Lay and could
even charge the former Enron chairman on the second anniversary of the
establishment of the US government's white-collar crime taskforce.

There is still the chance of a last-minute deal or further delays, people
close to discussions cautioned. An indictment or plea agreement at the end of
next week, however, would be a fitting way for the Department of Justice to mark
the progress of the taskforce, which was established in response to the wave of
corporate crime that seemed to start with revelations at the Texas energy group.

Michael Ramsey, a lawyer for Mr Lay, asserted his client's innocence as
recently as two weeks ago . Mr Ramsey said there would be no indictment as Mr
Lay had "committed no crime". Mr Ramsey said Mr Lay had met prosecutors several
times and wanted "as much interplay with the government as possible".

Mr Ramsey added they had requested meetings with the government.

Neither the Department of Justice nor the Securities and Exchange Commission,
the US's criminal and civil white-collar crime investigators, comment on
individual cases.

People close to the case acknowledged that bringing an indictment on or just
before Friday - the second anniversary of the taskforce - was a possibility.

In the next two weeks the Department of Justice is likely to issue updated
figures on the progress of the taskforce.

From July 2002 to February this year - the latest period for which statistics
are available - the government has secured more than 300 fraud convictions. That
300 is out of more than 700 people that it has accused of crimes.

For much of last year, critics of the government's progress questioned if the
people that ran Enron were going to be charged with any crime.

That criticism has disappeared this year as prosecutors have visibly worked
their way up Enron's former executive structure.

Jeffrey Skilling, the former chief executive, was charged in February with
directing a scheme to manipulate earnings and with gaining millions of dollars
from illegal insider stock sales.

Mr Skilling has pleaded not guilty.

Prosecutors received their biggest boost earlier with a guilty plea from
Andrew Fastow, the former chief financial officer.

Mr Fastow has been co-operating with the US government and his knowledge is
thought to be crucial to any cases brought against the company's upper echelons.
The Department of Justice also filed charges against Bernie Ebbers, WorldCom's
founder, in March. Mr Ebbers has pleaded not guilty.

* Separately, Bank of America has agreed to pay Dollars 69m to settle a
class-action lawsuit by investors who lost billions in the collapse of Enron,
the University of California, the lead plaintiff, said yesterday. The settlement
requires court approval, UC said.





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