Judge Allows Government to Seize Nearly $13 Million From Enron Founder Kenneth Lay's Estate

A judge says the federal government can proceed with its attempt to seize nearly $13 million from the estate of former Enron Corp. founder Kenneth Lay.

U.S. District Judge Ewing Werlein rejected a request from Lay's widow to halt the government's bid for the money, which prosecutors claim were "proceeds of the fraud proven in the criminal case against Lay."

Kenneth Lay had been convicted in May 2006 of 10 counts of fraud, conspiracy and lying to banks in two separate cases. A judge ruled last fall that Lay's death of heart disease in July 2006 vacated his convictions because Lay couldn't challenge them.

But Werlein wrote in his ruling Wednesday that prosecutors had "ample allegations" of criminal activity tied to the cash and property to pursue their civil forfeiture case.

Linda Lay, wife of the former Enron head, will continue to fight the attempts to seize the assets, which include the family condominium valued at $6 million, said Samuel Buffone, her attorney.

The government will have to prove his guilt again at a civil forfeiture trial, but the burden of proof is lower than in a criminal case.

Enron, once the nation's seventh-largest company, crumbled into bankruptcy proceedings in December 2001 when years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable. Enron's collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.