Kenneth Lay

Shortly before his death from a heart attack in Aspen, Colorado, at the age of 64, Kenneth Lay, the chief executive of Enron, lamented that he had lived both the American dream and the American nightmare.

Born into rural poverty, Lay had built an immense fortune at Enron, the Houston energy firm. He shaped himself as a friend of the Bush presidential family and a leading light among the oil-rich barons of Texas.

He was famously dubbed "Kenny boy" by the current president Bush and, at one point, was hotly tipped to enter the administration - the self-made man defining the modern American myth.

But five years ago, Lay lost it all.

Nightmare was an apposite description, although few extended much sympathy for his plight. Enron was engulfed by scandal and his reputation shattered. Thousands of people lost jobs and life savings as the company filed for bankruptcy in late 2001.

Lay and Enron became shorthand for corporate fraud, fodder for lawyers with dollar signs in their eyes and late night comics looking for an easy laugh. In the process, Lay achieved more household recognition than most businessmen from a lifetime of success. He testified in court that he was $100m in debt.

With an angry public baying for blood, he was finally convicted on six charges of fraud and conspiracy in May. He was due to be sentenced in September, and had been expected to be sent to prison for between 20 and 30 years - the rest of his life, as pundits were fond of saying. He maintained his innocence until the end.

Lay was born in Tyrone, Missouri. His father, Omer, was a Baptist minister who made money from selling farm equipment and working at a department store.

His parents had little formal education, and Lay did what he could to supplement the family income, delivering newspapers and mowing lawns.

"I spent a lot of time on a tractor and had a lot of time to think," he once told the Houston Chronicle. "I was enamoured with business and industry. It was so different from the world in which I was living."

He earned a masters degree in economics at the University of Missouri. In 1970, he added a doctorate in economics from the University of Houston.

Lay began his career at the oil major Exxon as an economist in 1965. After a spell in the US navy, he had his first brush with government, serving as under secretary for energy between 1972 and 1974.

For the next eight years, he held various executive positions in the oil industry, including, fatefully, Houston Natural Gas. In 1985, the company merged with a rival, InterNorth, and was renamed Enron. Lay was made chief executive.

He refashioned the business from a natural gas pipeline company into the biggest name in energy trading. At the height of its hubris, the company set up a business designed to trade broadband capacity as a commodity.

To many observers, Lay's dramatic rise and fall could easily be viewed through the prism of the "new economy" boom and bust. Enron became, fleetingly, the seventh largest company in the US, and Lay appeared, lionised, on the front pages of magazines. At his peak, he was said to be worth $400m.

Lay and his wife, Linda, who remained at his side throughout the trial, had five children and 12 grandchildren. The couple became a fixture in Houston, where Lay, widely regarded as an affable character, enjoyed great popularity and hosted countless charity events.

He supported the arts, helped create the Houston Holocaust Museum and financed the professional baseball park. He regularly attended his downtown church, where, according to local reports, the congregation remained supportive throughout, despite members losing large sums in Enron's collapse.

Lay continued at Enron as chief executive until February 2001, when he moved to the chairman's office and made way for his ambitious protégée, Jeffrey Skilling.

But the cracks were already beginning to show in Enron's facade. Skilling resigned just six months later, and Lay stepped back into the chief executive role.

Things rapidly began to unravel. In October 2001, the company spooked Wall Street by reporting $1bn in losses. Investors fled in panic and, in December, Enron filed for what was then the biggest ever bankruptcy. Its collapse began a sordid period in US corporate history, as a welter of financial fraud was uncovered at big name companies.

Lay and Skilling were accused of a vast conspiracy designed to give the impression that Enron was in better financial shape than it actually was.

They were convicted of using accounting trickery to fudge the numbers and offshore vehicles to hide debts and inflate revenues.

Skilling was regarded as the chief architect of the fraud. The lesser charges against Lay suggested he had carried on the deception after resuming the top job.

Lay was forced to endure four years of uncertainty before the government finally brought his case to trial this year. He had refused to be cowed, although he and his wife made fewer public appearances.

Ahead of his trial, he had risked jeers by taking to the podium at the Houston Forum to address a gathering of businessmen and women and rail against his persecution. In the December address, he said he had been a victim of "political and public hysteria".

The breakthrough for prosecutors had come in early 2004, when they secured a guilty plea from former finance chief Andrew Fastow, who gave evidence in return for a lesser sentence.

Both Lay and Skilling contended that Fastow alone was to blame.

When he finally appeared on the stand, Lay rued the fact that he had taken the chief executive job again after Skilling's departure. "I was just a couple of months away from being 60," he said. "I was looking forward to a somewhat more normal life, a more relaxed life."

He is survived by Linda, whom he married in 1982, and five children.

· Kenneth Lay, business executive, born April 15 1942, died July 5 2006.