A U.S. District judge erased Ken Lay’s criminal conviction citing an earlier case in which the U.S. Court of Appeals extinguished a defendant’s entire case pending appeal due to his death. The reasoning was that the defendant hadn’t had a full opportunity to challenge the conviction and the government shouldn’t be able to punish a dead defendant or his estate. This means that that Ken Lay’s estate is off the hook for the $43.5 million in ill-gotten Enron gains that the U.S. government would have received as restitution as part of his conviction. The U.S. government must now sue the Ken Lay estate like any other litigant in civil court.

I guess that if you steal hundreds of millions of dollars and fail to get away with it, you can always kill yourself while on appeal and leave your heirs a pretty nice nest egg. Who knew? Some people claim that he either killed himself or faked his own death. It turns out that he may have “died” on the advice of legal counsel. Surely laws will have to be changed going forward to deal with this, since many CEOs are old farts that may die before the legal process is through with them.

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