Kenneth Lay, long-time chairman of Enron Corp., is expected to be indicted on criminal charges within the next two weeks regarding his activities during the final months at the failed energy company, according to sources. If the indictment is handed out, it most likely would resolve the biggest work of the Enron Task Force’s two-and-a-half-year investigation.

Although details of the indictment have not been leaked, Lay, 62, is expected to face charges for encouraging employees and investors to buy Enron stock even though he knew about the mounting financial difficulties before Enron declared bankruptcy in December 2001, according to the Houston Chronicle. Lay was mostly involved in community and public relations in the latter part of his tenure as chairman, but he resumed the role of CEO in August 2001 when Jeffrey Skilling resigned, and he led the company until its bankruptcy.

In February, Skilling pleaded innocent to 35 counts of fraud, conspiracy and insider trading in charges brought by the Justice Department’s Enron Task Force and the Securities and Exchange Commission (SEC).

Apparently, the Houston-based grand jury investigating Enron has heard five days of testimony this month, all focused on Lay, the Chronicle said. Included in the hearings have been Lay’s Chief of Staff Steven Kean, former Enron General Counsel Jim Derrick, Lay’s children and his bookkeeper, according to the Chronicle. The SEC already has many of Lay’s personal financial records. The newspaper said that prosecutors are questioning witnesses about several things, including:

A spokesman for the Enron Task Force said prosecutors could not comment on the case. Michael Ramsey, one of Lay’s attorneys, was expected to meet with prosecutors to review evidence against Lay.

“We’re very comfortable Ken didn’t commit a crime,” Ramsey told the Washington Post. “We’re uncomfortable with the fact that we had prosecutors who picked their target before they knew the facts.”

The case against Lay may be coming from cooperating witnesses who already have pleaded guilty to various crimes while they were employed at Enron, including former CFO Andrew Fastow and former corporate secretary Paula H. Rieker. Rieker had traveled to New York with Lay in October 2001, “a trip when the Enron entourage is alleged to have made false statements to analysts about Enron’s troubles,” said the Chronicle. However, Ramsey, Lay’s attorney, told the Post, “I’ve seen nothing that will support a prosecution. I cannot conceive of anything Andy Fastow can say.”

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