The 12-member jury, weighing the criminal fraud and conspiracy charges against Enron Corp. founder Ken Lay and former chief executive Jeffrey Skilling, began its deliberations on Wednesday.

U.S. District Judge Sim Lake delivered instructions to the eight women and four men on the active jury panel before listening to closing arguments. Among Lake's instructions was one that will allow the jury to consider "willful blindness." The instruction allows jurors to convict if they believe Skilling or Lay intentionally shielded themselves from information they knew could be explosive.

Lake issued 55 pages of instructions, which nearly equaled one for every day of the case so far, 56 days. Skilling, 52, faces 28 charges of fraud, conspiracy and insider trading, while Lay, 64, faces six charges of fraud and conspiracy.

The jurors deliberated for just over two hours Wednesday and will follow an 8 a. m. to 4 p.m. schedule Monday through Thursday until a decision is reached.

But Lay won't wait idly for the jury's decision. On Thursday, a second case began against him, which is being tried without a jury. T he government alleges that Lay used Enron stock as collateral for loans totaling $75 million and signed documents required by the bank and federal regulators that stated he would not use those loans to buy additional stock. Lay allegedly then did buy stock with the loan money.

While t he banks lost nothing -- Lay paid the loans back -- the law only requires that a customer put the banks at risk. Lay has denied the charges and publicly complained that no one has ever been charged with the crime.

The trial isn't expected to last more than a week, but if convicted, the charges could put Lay in prison for longer than the four-month-old Enron case. Each of the four counts of bank fraud and false statements to banks carries a prison term of up to 30 years and a fine of $1 million.

The government's first witnesses include former Lay employees, former bank and investment company executives, and an agent from the Federal Bureau of Investigation. Judge L ake has said that he'll deliver his verdict in the banking case after jurors make their decisions in the fraud and conspiracy case.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access