HOUSTON — Prosecutors dropped several charges against Kenneth L. Lay and Jeffrey K. Skilling as they rested their case Tuesday against the former Enron Corp. executives, who are accused of covering up the financial ruin at the energy company.
Prosecutors asked U.S. District Judge Sim Lake to dismiss three charges against Skilling -- two counts of securities fraud and one count of making false statements to auditors -- and one charge of securities fraud against Lay because they had not presented any evidence regarding those counts during the two months in which they laid out their case. The judge agreed.
Skilling, 52, now faces 28 counts of conspiracy, fraud and insider trading, and Lay, 63, faces six counts of conspiracy and fraud linked to the company's collapse into bankruptcy in December 2001.
Both men, who have pleaded not guilty to any crimes at Enron, could face decades in prison if found guilty.
After the government's last witness left the stand, Lake recessed the case until Monday, when defense lawyers will begin their presentation.
The government called 22 witnesses during its case, including former top Enron executives Andrew S. Fastow, David Delainey and Ken Rice, who all testified that Skilling and Lay knew of the illicit financial deals inside Enron that were used to hide billions of dollars in debt while inflating the company's profit and propping up its stock price.
The prosecutors' final witness was Joanne Cortez, a former Enron employee who oversaw a line of credit the company had set up for Lay.
Cortez said she had been shocked to discover that Enron's compensation committee raised Lay's credit line to $7.5 million from $4 million during the company's final months despite the financial turmoil there.
Lay repeatedly drew down the credit line and repaid it almost immediately each time with Enron shares he owned, Cortez said. "It made me question whether it was being used as somewhat of a tool to sell shares," she said.
Lay has not been charged with insider trading, although prosecutors have said he enriched himself as the company descended into bankruptcy.
Skilling's lawyer Daniel M. Petrocelli told Lake that the defense teams would present their case together, and that the lawyers would work to trim their witness list from the 113 people they have said could take the stand.
"It's probably a list of about 50 witnesses, about half of which I expect to testify," Petrocelli said.
Defense lawyers have said Lay and Skilling would take the witness stand as they present their case, which is expected to last four to six weeks.
The current list includes several former high-ranking Enron employees, such as former Chief Accounting Officer Richard A. Causey, who struck a plea deal with the government shortly before he was due to go on trial with Lay and Skilling.