[JURIST] A federal judge in Houston on Tuesday vacated the conviction [PDF text] and dismissed the indictment of Enron founder Ken Lay [defense website; Houston Chronicle profile]. Lay was convicted [JURIST report] in May on 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. He died suddenly [JURIST report] of a heart attack in July prompting his lawyers to ask that Lay's conviction be vacated [JURIST report] and the indictment dismissed. 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. Under the "doctrine of abatement," federal courts may vacate convictions of criminal defendants that die pending appeal.

The US Justice Department had asked US District Judge Simeon T. Lake III to defer a ruling [JURIST report] in the matter to allow Congress time to consider a bill drafted by DOJ lawyers that would remove the doctrine of abatement from the criminal code, but Lay's lawyers pressed for speedy ruling [JURIST report] last week, on the grounds that Congress adjourned in September with neither introduction nor passage of any such bill. With the 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. The Houston Chronicle has more.