Enron's Ken Lay indicted

HOUSTON -- The three-year investigation of Enron Corp.'s scandalous collapse has reached the top of the energy company, with the criminal indictment of founder and former chief executive Kenneth Lay, sources told The Associated Press Wednesday.\nLay, who has insisted he knew nothing of the financial fraud at Enron, was expected to surrender to federal authorities Thursday, said the sources who spoke on condition of anonymity.\nThe specific charges remained under seal. Prosecutors from the Justice Department's Enron Task Force presented an indictment to U.S. Magistrate Judge Mary Milloy in Houston Wednesday, and at their request she sealed both the indictment and an arrest warrant, the sources said.\nA hearing before Milloy was scheduled for late Thursday morning. Lay's lawyer, Michael Ramsey, didn't immediately return a call for comment.\nThe Securities and Exchange Commission was expected to bring civil fraud charges against Lay on Thursday, including making false and misleading statements and insider trading, a person familiar with the case said, speaking on condition of anonymity.\nProsecutors have aggressively pursued the one-time celebrity CEO and friend and contributor to President Bush who led Enron's rise to No. 7 in the Fortune 500 and resigned within weeks of its stunning failure. Barring last-minute delays, Lay is the 30th and highest-profile individual charged.\nHe will be the second Enron CEO to be charged. Jeffrey Skilling, who succeeded Lay and then stepped down abruptly in August 2001, shortly before the scandal broke, was charged with nearly three dozen counts of fraud and other crimes in February.\nWaiting to testify for the prosecution is former finance chief Andrew Fastow, who pleaded guilty to two conspiracy counts in January. Fastow admitted to engineering partnerships and financial schemes to hide Enron debt and inflate profits while pocketing millions for himself.\nEnron's collapse led a series of corporate scandals that sent investors fleeing and sparked numerous investigations through 2002. Thousands of Enron's workers lost their jobs and stock fell from a high of $90 in August 2000 to just pennies.\nThe charges against Skilling and former top accountant Richard Causey target actions over several years leading up to Enron's collapse, while allegations against Lay were expected to focus on his actions after he resumed the role of CEO upon Skilling's abrupt resignation in August 2001, the sources said.\nDays after Skilling's resignation, Lay met privately with Sherron Watkins, then an executive on Fastow's staff, who had sent him a lengthy memo warning of impending doom from Fastow's myriad schemes to hide debt and inflate profits.\nBut Lay told The New York Times last month that he didn't believe the company had serious problems and trusted other senior managers -- including Fastow and Causey -- when they reassured him that all was fine.\nSkilling and Causey are awaiting trial on charges of conspiracy, fraud and insider trading. Both pleaded innocent and are free on bond.