Former Enron Corp. Chairman Kenneth Lay is facing two separate criminal trials under a ruling made last week by a U.S. district judge in Houston. Under the rulings, Lay will be tried with former CEO Jeffrey Skilling and former chief accountant Rick Causey, and then will be tried for criminal charges related to his personal banking activities.

Lay, Skilling and Causey had each requested separate trials, but U.S. District Judge Sim Lake refused all of the requests. Lake also ruled that Lay’s four criminal charges related to banking activities should be tried separately.

“When all the defendants named in an indictment are alleged to have participated in an overarching conspiracy that encompasses the substantive offense charged, the defendants are properly joined,” Lake said in his ruling. However, he also found that the personal banking charges against Lay were not sufficiently related to the Enron conspiracy, even though prosecutors had argued that they were.

Lay pleaded innocent last July to 11 criminal counts: seven criminal charges relating to fraud and conspiracy at Enron, and four charges of fraud related to his personal banking (see NGI, July 12). Skilling and Causey are each charged with 35 criminal counts for conspiracy, fraud and insider trading (see NGI, Feb. 23).

Mike Ramsey, who is representing Lay, said he was disappointed in the rulings. Ramsey said that the government had “missed an opportunity” by not allowing Lay to have a speedy, separate trial. He also said that trying Lay, Skilling and Causey together won’t allow the jury to have clarity when reviewing the charges.

Skilling’s lead attorney Daniel Petrocelli said, “Whether we’re in it alone or with Mr. Lay and Mr. Causey, we are looking forward to our day in court when Mr. Skilling will be completely exonerated from these wrongful charges against him.”

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