Enron Corp. founder Kenneth Lay on Monday said the four bank fraud charges against him are accurate, but he insisted to the presiding judge in the case that it was not his intention to defraud the banks.

In his second trial, Lay is being tried before U.S. District Judge Sim Lake. The government alleges that beginning in 1999, Lay obtained $75 million in loans from Bank of America Corp., Chase Bank of Texas and Compass Bank, and although he signed documents promising not to use the loans to purchase stock, he did so on several occasions. If convicted, Lay could be sentenced up to 30 years in jail on each count. However, because Lay repaid the loans, and it is considered a victimless crime, even if convicted he would receive a minimum sentence.

Lay’s lawyer Ken Carroll asked him if he knew about how bank credit lines were governed and about the purchase of margin stock.

“I know a lot more about it today than I ever have before,” Lay answered. He then was asked if the charges against him were accurate.

Directing his answer to Lake, Lay answered, “Very much so, your honor…There is no doubt that we did not fully comply with those documents…I did not nor would I have if I had known what the facts were.”

Asked when he first became aware of any allegations that he had improperly used the loans, Lay said he learned about them “the morning of my indictment” in June 2004. Lay also was charged with six counts of fraud and conspiracy related to Enron. If he had known he was not in compliance with the requirements, Lay said, he would have tried to correct it.

“We would have asked what the problem was, and second of all we would have fixed it,” Lay said. He said, “as we look back at those documents…clearly we were not in compliance in different investments or paybacks or whatever.” But he said he was “convinced” his staff and lawyers who were reviewing the documents were not doing anything wrong either. “I regret I didn’t have a lot more time to spend on my personal matters, and perhaps that’s one of the consequences of that one.”

Asked by Carroll why he needed all of his credit lines, Lay said he wanted to have “financial flexibility,” and he said “because I had a lot of bankers coming at me for my business.”

The government completed its case on Monday after calling FBI Special Agent Bob Cunnane to the stand. Cunnane, who specializes in bank fraud, affirmed earlier testimony that Lay had signed loan documents that some of the bank loans had been used to buy margin stock. Cunnane admitted under defense questioning that $750,000 of one bank loan had been put into a money market fund, an allowed use of one of Lay’s nonpurpose lines of credit.

However, “the proceeds of that fund were eventually used to purchase stock,” Cunnane testified under redirect. “I think there was $1 million put into that brokerage account [and] immediately $240,000 was used to purchase stock.”

After the government had rested its case, Carroll called on Lake to acquit Lay on the four charges because he said the prosecution had failed to prove its case. Lake denied the motion. Lake is expected to announce his verdict after the Enron jury renders its decision in the first case.

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