Ken Lay and Jeff Skilling asked an appeals court Wednesday to move their fraud trial from Houston, saying they have been “demonized” in the headquarters city of Enron Corp., which they ran before its collapse in 2001.
Unless the Fifth Circuit U.S. Court of Appeals acts, the trial will start next week after U.S. District Judge Sim Lake refused to move it.
“For over four years, defendants have consistently been demonized by the Houston press, public and politicians and the Enron Task Force lawyers prosecuting this case,” Daniel Petrocelli, Skilling’s lead lawyer, said in an emergency request. “The scorn directed toward defendants has fueled a repeatedly and even violently expressed desire for vengeance expressed in the local community.”
Skilling, 52, Enron’s former chief executive, and Lay, 63, its former chairman, are charged with overseeing a wide-ranging financial fraud that led to the meltdown of what was once the nation’s largest energy trader. About 150 prospective jurors are to report Monday for their trial.
Enron had more than $68 billion in market value before its bankruptcy filing wiped out more than 5,000 jobs and at least $1 billion in retirement funds virtually overnight. Outside investors suing over the company’s demise contend accounting fraud at Enron led to at least $25 billion in losses.
Prosecutors Wednesday answered defense complaints that they have unfairly broadened the case against Skilling and Lay with new allegations in a court filing last week.
Defense lawyers argued that prosecutors indicated they planned to try the executives on 13 new allegedly false statements and involvement in a massive off-books partnership that neither was accused of in the original indictment.
The government said these allegations were part of the case all along.
“Each of the 13 new statements fits comfortably within the allegations of the existing superseding indictment and cannot have surprised defendant,” Sean Berkowitz, director of the Justice Department’s Enron Task Force, said in a filing. “The government’s recent minor additions” to its list of allegations “do not meaningfully broaden the transactions the government intends to prove at trial.”
Berkowitz said many of the allegedly false statements the government recently identified are nearly identical to statements that are listed in the indictment but were made at different times.
