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U.S. Department of Justice lawyers filed a motion on Sept. 6 to recover more than $40 million from the estate of Kenneth Lay, the former chairman of Enron Corp. who was convicted of fraud on May 25, but died of a heart attack on July 6 before he could be sentenced. “They must be so frustrated that he passed away,” says Nancy Rapoport, a professor and former dean of the University of Houston Law Center, who has written extensively about the downfall of Enron and the resulting litigation. That frustration, Rapoport says, probably led the government to file the motion opposing the long-established practice of federal courts throwing out convictions of criminal defendants who die while their appeals are pending. At the same time it filed its motion, the Justice Department announced that it had drafted proposed legislation and was seeking sponsors in Congress to amend the criminal forfeiture procedural statute to eliminate the “doctrine of abatement,” which limits efforts to collect money allegedly derived from fraud from the survivors of deceased defendants. If passed, the proposed legislation would retroactively apply to Lay’s case, the government announced. But the DOJ’s two-pronged efforts, Rapoport believes, likely will not succeed in court or legislatively. She points to a 5th U.S. Circuit Court of Appeals opinion, United States v. Estate of Andrew Clyde Parsons (2004), in which the court decided to maintain the abatement doctrine, which prevents a wrongly accused defendant from standing convicted on the strength of an untested conviction, where the defendant’s death prevents him from pursuing a criminal appeal to its conclusion. In contrast, Philip H. Hilder believes that Lay’s death exposed a flaw in the legal system and that the government lawyers have made a solid argument with their motion and their proposed legislation. Hilder, the founder of Houston’s Hilder & Associates, represents Sherron Watkins, a former vice president for corporate development at Enron who famously warned Lay about possible financial problems at the Houston energy company. Thousands of Enron employees lost their jobs and retirement security when the energy company filed for bankruptcy in December 2001. Hilder says the DOJ’s proposed legislation is fair and equitable because it allows a deceased defendant’s representative to appeal his or her conviction and, at the same time, permits prosecutors to prevent the deceased defendant’s estate from keeping a windfall from fraudulent activity. Justice Department spokeswoman Jackie Lesch did not immediately return a telephone call seeking comment. Neither did Michael Ramsey, a Houston criminal-defense solo who represented Lay during his 16-week trial in Houston.

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