Lay Faces Separate Trial on Banking Charges

For the past 16 weeks the legal spotlight has been on Ken Lay and the fraud and conspiracy charges he and Jeff Skilling are facing. Now that the jury is deliberating those charges Lay is facing a separate trail on four banking charges that carry very stiff sentences. Houston Public Radio's Rod Rice reports on how things ended-up this way.

The trail that resumes this morning is a bench trial, meaning there is no jury, federal Judge Sim Lake will hear testimony and decide if Lay is guilty or not guilty of one count of bank fraud and three counts of false statements to banks. This trial has not gotten the attention of the longer trial but it is not an insignificant matter. If the jury finds Lay guilty of all six fraud and conspiracy charges he faces a maximum 45-years in prison. Adam Gershowitz with the South Texas College of Law says the bank charges carry much stiffer maximum sentences.

"If all of them were to be sentenced at the maximum and sentenced consecutively it would be in the neighborhood of a hundred and twenty years."

It is a defendant's decision to forego a jury and have a bench trial and a defendant can request to have a trial separate from other defendants charged in the same matter. Lay requested both and Gershowtiz says the way things turned out is probably the worst scenario for Ken Lay. Lay was the last of the Enron defendants to be charged and he faced far fewer charges then Jeff Skilling and Richard Causey.

"When you get a conspiracy trial like this all of the defendants would prefer to have their cases tried separately because it's much easier to point the finger at all the other defendants if they're not sitting in the room with you."

Which is what Lay did. He said he wanted a speedy trial and would forego a jury trial if his case could be severed from the others. One of his reasons for a separate trial was that he also faced the bank charges that the others did not.

"The judge said, well, okay, I'll offer your speedy trial and I'll offer your severance of your claims from those of Skilling and Causey, but I'm going to sever just these four separate bank fraud charges and I'll try them myself, but all the other charges you face are related to charges against Skilling and Causey and you should have to sit for a joint trial with them."

And so the government gets two chances at Ken Lay one of which carries no possibility of a mistrial due to a hung jury. Gershowitz says while it was a gamble the strategy of asking for a separate and speedy trial was sound.

"It's almost a sure thing that if Lay had gotten what he wanted and had a trial only a couple months after he was indicted in 2004 the government would not have been able to do a good a job as they did when they had a year and half extra to prepare their case."

The bench trial is expected to end this week, but judge Sim Lake will not render his verdict until the fraud and conspiracy jury makes its decisions.

Bio photo of Rod Rice

Rod Rice

Local Anchor, Morning Edition

Rod Rice became fascinated with radio at an early age, while sitting on his Grandfather’s lap listening to his "programs" on the big Emerson Radio...