Enron Corporation was an energy and commodities company based in Houston, Texas that declared bankruptcy in 2001 amid allegations of corporate abuse and accounting fraud. Its CEO, Kenneth Lay, was indicted in July 2004 on 11 counts of securities fraud related to his time as Chairman. Government lawyers who embarked on this whaling expedition included, along with his indictment, allegations seeking criminal forfeiture of Lay’s financial estate in an effort to compensate victims for their losses.
With roughly 4,000 jobs lost and the life savings of countless victims wiped out, Lay was eventually found guilty in May of 2006, nearly two years after his indictment. Less than two months later, however, and prior to his criminal sentencing, Lay died while vacationing in the state of Colorado. As a result of his death, Lay’s conviction was necessarily vacated by the court; and with it, any prospect of criminal forfeiture.
Fortunately for few of the victims affected by Lay's crimes, civil forfeiture as a means to recover some of his assets remained a possibility under the law. While criminal forfeiture only becomes available after a conviction and is finalized only at sentencing (assuming the assets sought are still available at that time), civil forfeiture has no such requirement. Therefore, because the proceeding was not against Lay himself but rather the “guilty” property associated with his crimes, and because civil law does not aim to punish, but rather is designed to provide a type of remedy, an action against Lay’s real estate and other specific assets was still obtainable.
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