updated 5/24/2007 12:54:14 PM ET 2007-05-24T16:54:14

The widow of Enron Corp. founder Kenneth Lay is asking a judge to let her keep nearly $13 million in assets — particularly the family condominium — that the federal government is trying to seize.

In a court filing last week, attorneys for Linda Lay asked U.S. District Judge Ewing Werlein Jr. to throw out the government's civil action, which was filed after Kenneth Lay's criminal convictions related to Enron's downfall were vacated following his death last year.

Federal authorities claim $12.7 million in assets they are trying to seize were "proceeds of the fraud proven in the criminal case against Lay."

If the entire complaint can't be thrown out, Linda Lay's attorneys asked that at least claims to the couple's home be dismissed.

"The facts alleged ... neither indicate nor suggest any intention on the part of Kenneth Lay to purchase the condominium for purposes of concealing, or disguising, or in any way facilitating an alleged money-laundering transaction," her attorneys, David Jones and Samuel Buffone, wrote in their 28-page motion.

Justice Department spokeswoman Jaclyn Lesch declined to comment on the motion Wednesday.

Linda Lay contends she, not her husband, is the owner of the assets the government is trying to seize. In his will, Kenneth Lay left all of his assets to his wife.

Prosecutors are looking to take three things: $2.5 million of the value of the couple's condominium in one of Houston's most exclusive high-rises; $10.2 million from a partnership named for both the Lays; and nearly $23,000 in a bank account.

Kenneth Lay had been convicted in May 2006 of 10 counts of fraud, conspiracy and lying to banks in two separate cases.

But in October, U.S. District Judge Sim Lake said Lay's death of heart disease on July 5 vacated his convictions because Lay couldn't challenge them.

Lake's ruling stopped the government's efforts through the criminal courts to seek millions more in ill-gotten gains prosecutors allege Lay pocketed by participating in Enron's fraud.

Jones and Buffone also argued that prosecutors can't use facts alleged in Lay's indictment to help their forfeiture case because his convictions were thrown out.

Earlier this month, Linda Lay filed a motion asking for a jury trial in the case.

Enron, once the nation's seventh-largest company, entered bankruptcy proceedings in December 2001 after accounting tricks could no longer hide billions in debt or make failing ventures appear profitable.

Enron's collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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