The Associated Press reported that Ken Lay died of a heart attack this morning in Aspen, Colorado. Mr. Lay, the former chairman of Enron Corporation, had been convicted of several crimes in one of the largest public company frauds in history. The various chat rooms are abuzz with allegations Mr. Lay used his money and connections to fake his death and has simply fled before his sentencing. This angry reaction is not new in security fraud cases.
Those who lost their life savings were looking forward to Mr. Lay being sentenced to a long prison term and the Justice Department chasing him and his family for the millions he took from Enron. Some of these investors are angry that they will not get the satisfaction of seeing Mr. Lay in jail and believe his death is more of his fraud. One posting this morning by CIA (Not the Central Intelligence Agency) stated, “Ken Lay is not dead. He more then likely bought off the Corner’s office and Sheriff’s dept. In Pitkin CO living it up in South America (sic).” Another posting from Houston Bystander, who writes, “…it’s got conspiracy written all over it…he’s got the $$, the opportunity…(tiny Colorado town–few law enforcement experts in community where he has been well-known for years) and the motive. The Justice Department must confirm that it is him! We want DNA test results…”
These are angry comments, assuming that the Justice Department and others investigating Enron will simply accept the death certificate from the local coroner’s office. In the mean time Ken Lay will be in some exotic place spending the millions he acquired from defrauding all those people. My opinion is that the Justice Department and others will investigate the circumstances of Mr. Lay’s death and these accusations will be proven false. It is highly improbable that Mr. Lay would be able to fake his death and get away with it.
In a securities fraud case the Orlando Sentinel called “the largest PONZI scheme in Florida’s history”, two individuals died. One had pled guilty to defrauding investors of hundreds of millions of dollars and was awaiting sentencing. He died of a heart attack in a motel in a small town in South Carolina. The local coroner examined the body and provided a death certificate. The sheriff’s office provided a police report of the death. Immediately the cry of foul play arose from those who had been defrauded. They accused the individual, who was a licensed mortician, of faking his death and fleeing to spend his life enjoying the millions he accumulated defrauding the investors. The second individual, who was one of the largest brokers selling the scheme’s securities, committed suicide. Again, there was a coroner’s report, but that did not stop the cry of foul play. In both of these deaths the Justice Department and the bankruptcy trustee investigated and found nothing to indicate that these deaths were not real.
Both of these men were under extreme pressure. They were well respected businessmen in their communities and overnight become known as fraudsters. They pled guilty to crimes, settled with the bankruptcy trustee to pay over all of their exempt assets, could not get a job, and could not provide the lifestyle to themselves and their families that they had expected. In their minds they admitted they had failed. Did they fake their death and go to live an extravagant life in hiding? Not in my opinion.
Mr. Lay was facing the same circumstances. He had been convicted and was facing a long jail sentence. He had stated he was broke, but if he wasn’t, the Justice Department and others would hunt for his hidden assets with a vengeance. He fell from a position of one of the most respected leaders in business to one of the worst fraudsters in history. He not only took money from the corporation and its creditors, but ruined the lives of the employees who revered him as a great leader. One posting from No Enron Shareholder read, “It’s not up to me to judge him, but I am sure there are plenty who will try. I only hope he had made peace in his own life for the pain he inflicted on others.”