Kenneth Lay (search), Enron Corp.'s founder and former chairman, could be indicted on charges stemming from its 2001 collapse by the end of June, sources close to the case told The Associated Press on Saturday.

Two sources who spoke on condition of anonymity said federal prosecutors are aggressively pursuing Lay, and witnesses with information about him have recently testified before a special grand jury probing Enron's (search) December 2001 collapse.

Barring any delays, federal prosecutors aim to ask the grand jury for an indictment before the Fourth of July, the sources said. The Houston Chronicle first reported the possible indictment in Saturday's editions, citing unidentified lawyers close to the case.

It was unclear what kinds of charges would be filed against Lay, a friend and contributor to President Bush. The sources said any indictment would include conspiracy charges for allegedly participating in hiding Enron's true financial condition before the energy trader collapsed into bankruptcy.

Former Enron CEO Jeffrey Skilling (search) and top accountant Richard Causey (search) are awaiting trial on charges of conspiracy, fraud and insider trading.

Lay's attorney, Michael Ramsey, said Saturday that he would ask to meet with the Justice Department's Enron Task Force in the coming week.

"I feel very confident that Ken Lay did not commit a crime," Ramsey said.

Bryan Sierra, a spokesman for the Justice Department, declined to comment Saturday on anything pending before the grand jury.

The sources said prosecutors likely are focusing on Lay's actions and statements when he resumed as CEO upon Skilling's abrupt resignation in mid-August 2001.

Days after Skilling's resignation, Lay met privately with Sherron Watkins, then an executive on Fastow's staff, who had sent him a lengthy memo warning of impending doom from Fastow's schemes.

Ramsey said on Saturday that Lay took over as CEO "with one purpose — to cure any problems that might exist, and to bring the morale of the company back up to where it should be."

Speculation about possible criminal charges against Lay grew more intense after former Enron finance chief Andrew Fastow (search) pleaded guilty in January to two counts of conspiracy and became the most highly placed former Enron executive to become a cooperating witness for the government.

Fastow admitted to scheming to manipulate Enron's books by hiding debt and inflating profits while enriching himself on the side.

Fastow's subsequent cooperation with prosecutors led to the indictments of Skilling and Causey, prosecutors have revealed in court filings.

Ramsey said Saturday that Lay "had no idea that Andy Fastow was doing what he has now admitted he was doing."

Another potential witness in the investigation could be Paula Rieker, the company's former No. 2 executive for investor relations. She replaced Skilling's then-girlfriend Rebecca Carter as the board's corporate secretary in September 2001 and answered directly to Lay and former Enron general counsel Jim Derrick.

She pleaded guilty May 19 to one count of insider trading and is cooperating with prosecutors. She left Enron May 5, when her name surfaced as a target in the Justice Department's investigation.

Lay resigned as CEO in January 2002 and stepped down as chairman the next month. He has remained publicly silent since Enron's collapse, except for expressing "profound sadness" for the scandal before invoking the Fifth Amendment before Congress in February 2002.

Enron's accounting scandal and collapse into bankruptcy was the first in a series of corporate scandals. Thousands of workers lost their jobs and stock fell from a high of $90 in August 2000 to just pennies.