Kenneth Lay's Conviction Erased From Record

A federal judge in Houston this afternoon wiped away the fraud and conspiracy conviction of Kenneth L. Lay, the Enron Corp. founder who died of heart disease in July, bowing to decades of legal precedent but frustrating government attempts to seize nearly $44 million from his estate.

The ruling worried employees and investors who lost billions of dollars when the Houston energy trading company filed for bankruptcy protection in December 2001. It also came weeks after Congress recessed for the November elections without acting on a last-ditch Justice Department proposal that would have changed the law to allow prosecutors to seize millions in investments and other assets that Lay controlled.

With the judge's order, Lay's conviction on 10 criminal charges will be erased from the record. "The indictment against Kenneth L. Lay is dismissed," U.S. District Judge Simeon T. Lake III wrote in a spare, 13-page order.

Legal analysts said the ruling by a federal judge in Houston closely hewed to long-held doctrine, which allows defendants to vacate their convictions if they die before they are able to exercise their right to appeal. The law hesitates to punish the dead, the analysts said.Samuel J. Buffone, a Washington-based lawyer for Lay, said, "We're very pleased with the ruling and are glad that the criminal case against Mr. Lay is at an end."