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DOJ drops appeal of dismissed Lay conviction after abatement bill proposed

[JURIST] The US Justice Department has withdrawn its notice of appeal of a federal judge's decision to vacate the conviction [PDF text; JURIST report] of former Enron founder Ken Lay [Houston Chronicle profile; JURIST news archive]. Lay, convicted [JURIST report] in May of fraud and conspiracy charges [indictment, PDF] for providing investors with false and misleading financial information from 1999 up until Enron [JURIST news archive] filed bankruptcy in late 2001, died suddenly [JURIST report] of a heart attack in July. Lay died before his sentencing date and therefore was not afforded an opportunity to exhaust the appeals process, and no final judgment was issued in the case. US District Judge Sim vacated the conviction and dismissed Lay's indictment under the "doctrine of abatement," which allows federal courts to vacate convictions of criminal defendants that die pending appeal. Federal prosecutors had filed papers indicating a planned appeal to the US Court of Appeals to the Fifth Circuit, but withdrew the notice of appeal Monday.

A DOJ official noted that the decision not to appeal was made after legislation was introduced in Congress to modify the abatement doctrine. Last week, US Sen. Dianne Feinstein (D-CA) [official website], who previously urged the DOJ to appeal [letter, PDF; JURIST report] Lake's decision, introduced legislation [press release] that would "clarify the legal procedures that should be applied when criminal defendants, such as former Enron CEO Kenneth Lay, die after they have been duly convicted, but before their appeals are final." The proposal, drafted in conjunction with the Justice Department, would:

  • Establish that, if a defendant dies after being convicted of a federal offense, his conviction will not be vacated. Instead, the court will be directed to issue a statement stating that the defendant was convicted (either by a guilty plea or a verdict finding him guilty) but then died before his case or appeal was final.

  • Codify the current rule that no further criminal punishments can be imposed on a person who is convicted if they die before a sentence is imposed or they have an opportunity to appeal their conviction.

  • Clarify that, unlike criminal punishment, all other relief (such as restitution to the victims) that could have been sought against a convicted defendant can continue to be pursued and collected after the defendant's death.

  • Establish a process to ensure that after a person dies, a representative of his estate can stand in the shoes of the defendant and challenge or appeal his conviction if they want, and can also secure a lawyer - either on their own or by having one appointed.
  • With Lay's vacated conviction, the federal government now has no means of seizing property controlled by the Lay estate to compensate victims of the Enron collapse. Instead, victims will have to pursue civil remedies against Lay [JURIST report] in order to recover money lost when Enron declared bankruptcy. Feinstein's proposal would allow the government, if a criminal forfeiture action was filed before a defendant's death, an additional two years after a defendant's death "to file a parallel civil forfeiture lawsuit so that [the government] could try to recover those same assets in a different and traditionally-accepted manner." The Baltimore Sun has more.

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