HOUSTON (AP)--Enron Corp. founder Kenneth Lay is taking the blame for federal criminal bank fraud charges against him but insists he never intended to break the law because he didn't realize he was doing anything wrong.
"Clearly we were not in compliance in different investments and different paybacks," Lay said late Monday as he took the witness stand in his own defense. "Ultimately, it's my responsibility. I regret I did not have more time to spend on my personal matters and perhaps this is one of the consequences of that."
Lay was to return to the stand Tuesday for what his lawyer, Ken Carroll, estimated was another hour of questioning. Then prosecutor John Hueston expected to cross-examine Lay for about another hour, which should complete the defense case. Prosecutors were considering one rebuttal witness.
U.S. District Judge Sim Lake, who is hearing the case without a jury, anticipated closing arguments early Tuesday afternoon. Lake, however, has said he wouldn't release his verdict in the case until a jury finishes its deliberations in the main fraud and conspiracy case involving Lay and former Enron Chief Executive Jeffrey Skilling.
The jury in that case, where Lay faces six charges and Skilling 28, was to return Tuesday for a fourth day of deliberations.
Prosecutors allege that beginning in 1999, Lay obtained $75 million in loans from three banks - Bank of America; Chase Bank of Texas, a unit of JP Morgan & Co.; and Compass Bank - and then reneged on an agreement with the lenders that he wouldn't use the money to carry or buy stock or mutual funds. The federal rules governing use of loans for stock sales were covered in documents Lay signed.
His personal banker testified earlier the rules were spelled out to Lay.
"They're not things I remember today," Lay said. "It's just that simple."
Under questioning, Lay said he didn't remember a discussion of the rules even in his time over the years as director of several banks.
He said he didn't dispute using the money to buy stock, but he added he had no intention to defraud the banks or make false statements.
"I did not nor would I have if I knew what the facts were," he said.
He said documents for his signature routinely were handed to him by his assistants and after reviews by lawyers who he believed "were doing in good faith and doing the best job they could with the information they had." He also insisted he never was aware of any problems until he was indicted in July 2004.
"I do not recall hearing from anybody, not even an internal employee, certainly not from one of my bankers or bankers representatives," he said.
Earlier Monday, Lay's personal accountant testified she was unaware when she transferred money from loans Lay had obtained that federal regulations barred use of some of the money for stock purchases.
Sherrie Gibson, contradicting her own grand jury testimony, said sometimes she decided herself which of Lay's multiple lines of credit to use but didn't intend to be deceptive.
"I never think in terms of sneaky," she said.
Like Lay, Gibson said she was unaware of the rules and neither Lay nor his banker told her about them. She also said Lay never told her to circumvent any regulations.
The final government witness was FBI agent Robert Cunnane, who specializes in white-collar fraud and who reviewed thousands of documents related to Lay's loans and stock purchases. Cunnane said Lay's statements that he wouldn't use the money to buy stocks were untrue.
But under cross-examination, he said he found no documents where any agency or bank raised concerns regarding any of the transactions.
Conviction on each of the four charges carries up to a 30-year prison term.
Lay's lawyers last week questioned the legitimacy of the bank documents containing the loan terms by suggesting the loan agreements actually were signed by an automatic signature device in Lay's office and not by him. On Monday, they again objected to some documents allowed into evidence that carried his signatures.
But Lay, in his testimony, said he was "a little upset" that "so much was made over it."
While acknowledging he didn't read everything he signed or what the machine signed, "Certainly, it was an authorized legal signature."
