What does the case of Mike Mike, the former owner of Kamaaina Termite and other Honolulu businesses, have in common with that of Kenneth Lay, the founder and CEO of Enron, the Texas-based energy company that collapsed in 2001 in what at the time was the largest bankruptcy in U.S. history?

Quite a lot, it seems.

Lay was convicted in 2006 on 10 counts of fraud and related offenses tied to the corporate bookkeeping shenanigans that led to the Enron collapse, and faced criminal forfeiture of millions worth of his personal assets. But Lay died of a heart attack in 2006, a few months before he was scheduled to be sentenced and before a planned appeal had been filed.

Michael J. Miske, Jr., was convicted last July by a federal jury on 13 counts of racketeering, as well as murder, kidnapping and related offenses. The same jury said an estimated $25 million in cash, real property, and other assets should be forfeited to the government because they were obtained, at least on part, with proceeds of Miske’s criminal activity. And, like Lay, Miske died in December 2024, weeks before he was to be sentenced.

Both deaths, having occurred prior to sentencing and before their appeals could be pursued, implicated the legal doctrine of abatement ab initio, which requires the criminal charges to be vacated, or cancelled, because the defendants had not been able to exercise their right to appeal.

Federal prosecutors agree with Miske’s defense counsel that the indictments naming him must be vacated as a matter of law, but that isn’t the end of the matter.

The opinion and order by Federal District Judge Sim Lake back in 2006, vacating Lay’s indictment, explained the rationale for the abatement ab initio doctrine.

First, Judge Lake cited a law review article: “The abatement remedy relies significantly on a larger premise: a conviction that cannot be tested by appellate review is both unreliable and illegitimate; the constitutionally guaranteed trial right must include some form of appellate review.”

Judge Lake’s opinion continued:

The Fifth Circuit also explained that {tJhe second rationale focuses on the precept that the criminal justice system exists primarily to punish and cannot effectively punish one who has died. “[T]he purposes of criminal proceedings are primarily penal-the indictment, conviction and sentence are charges against and punishment of the defendant-such that the death of the defendant eliminates that purpose.”

Miske’s Motion to vacate

On December 9, 2024, just a week after Miske’s death of an apparent accidental drug overdose while held in Honolulu’s Federal Detention Center, his defense attorneys filed a motion to vacate the indictments and jury verdicts pursuant to the doctrine of abatement ab initio. It argues, in essence, that Miske’s indictment and convictions should be voided and simply disappear from his record.

Their motion argues that vacating the indictments and jury verdicts would necessarily also vacate the jury’s verdict in favor of the forfeiting an estimated $25 million of Miske’s cash, assets, and property. Further, the motion argues the government should be ordered to lift all encumbrances and return all the cash and property, presumably to the trusts that Miske had established or to his estate, and ultimately to his family.

In their response to Miske’s motion, federal prosecutors agreed with defense counsel on the the main point. They acknowleding the law and legal precedent is clear that Miske’s death prior to sentencing “requires dismissal of the indictments….”

Yes, but…

Although both sides agree that the indictments must be thrown out, they disagree on a rather obscure point, whether the same reading of the law requires vacating the jury’s two separate verdicts (verdict 1 found Miske guilty of 13 charges, and verdict 2 found that almost all of his property was tied up with his criminal activities and therefore is subject to forfeiture).

Government attorneys argue “[t]he jury verdicts are not vacated under the doctrine of abatement ab initio, and because there is no judgment of conviction, there are no additional court entries or proceedings to vacate or dismiss.”

The government made two additional arguments. First, their response argues that Miske’s defense attorneys lack legal standing to ask for return of his property because, after his death, Miske himself (rather than his estate) has no remaining legal interest that they represent.

Further, the government announced it had already filed a civil lawsuit seeking to seize the same property which, the argue, “was obtained illegally and used in furtherance of the Defendant’s crimes.” As a result, they say, Judge Derrick Watson, who presided over Miske’s criminal trial, no longer has jurisdiction over the forfeiture matter, which now moves to a different court.

Sparring over the verdicts

Interestingly, both sides cite Judge Lake’s opinion and order in the Lay case to support their respective and conflicting positions regarding the jury verdicts.

Prosecutors argue:

It is unnecessary to “vacate” a jury verdict where the Court is otherwise dismissing the indictment and there is no formal judgment of conviction. Dismissal of the indictments is sufficient to abate this proceeding in its entirety. Indeed, in Lay, where, like here, the proceeding was abated ab initio by the defendant’s death but a final judgment of conviction was never entered, the court procedurally dismissed only the indictment against the defendant and took no action as to the jury verdict against the defendant.

And, they argue, Judge Lake only ordered that “[t]he indictment against Kenneth L. Lay is DISMISSED.”

Miske’s attorneys responded sharply.

Miske’s attorneys responded:

“Not true. In a section titled “Conclusion and Order,” the Court in Lay “concludes that Lay’s conviction must be vacated and that this action must must be dismissed” and, in addition, “[a]ccordingly, the Motion of the Estate of Kenneth L. Lay to Vacate His Conviction and Dismiss the Indictment (Docket Entry No. 1082) is GRANTED.”

A closer look shows that the motion to vacate filed by Lay’s attorneys included a proposed order to vacate that specifically pointed to the jury verdict, court records show.

This proposed order directed “said Motion should be and is hereby Granted and that the verdict of conviction is vacated and the indictment against Kenneth L. Lay is hereby dismissed. (emphasis added)”

However, Judge Lake’s actual order did not follow their suggested form, and simply ordered: “The indictment against Kenneth I. Lay is DISMISSED,” as cited by prosecutors in response to the motion by Miske’s attorneys.

What actual difference vacating the verdicts along with the indictments might make isn’t clear, but it seems most likely related to how the forfeiture issue will play out as the government’s civil lawsuit claiming right to Miske’s property moves forward.

In the meantime, Judge Derrick Watson will decide whether a further hearing is needed to hash out the differences between the two sides, or whether he will rule on the basis of the written arguments. There is no timeline for his decision.