HOUSTON -- Former Enron Corp. founder Kenneth Lay and former CEO Jeffrey Skilling were convicted Thursday of conspiracy to commit securities and wire fraud in a case born from one of the biggest business scandals in U.S. history.

The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation's seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations following a trial that lasted nearly four months.

Skilling faced 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Lay faced six counts of fraud and conspiracy.

Skilling, 52, was convicted of 19 of the 28 counts against him while Lay, 64, was found guilty of all counts.

In a separate, non-jury bank fraud trial, U.S. District Judge Sim Lake found Lay guilty of bank fraud and making false statements to banks in a separate trial related to his personal banking.

"Certainly, we're surprised. I think (it's) more appropriate to say we're shocked. Certainly, this is not the outcome we expected. I firmly believe I'm innocent of the charges against me as I have said from day one," Lay said. "Despite what happened today, I am still a very blessed man. Most of all, we believe that God, in fact, is in control and, indeed, that he does work all things for good for those who love the Lord. And we love our Lord, and ultimately, all of these things will work for good."

"This is obviously a very, very difficult time for Mr. Skilling, his children, his family. We had a trial and obviously it did not come out the way we hoped. It does not change our view of what happened at Enron and certainly doesn't change our view of Jeff Skilling's innocence," said Dan Petrocelli, Skilling's attorney. "We've just begun the fight."

A reporter asked Skilling if he would ever admit to himself that he might have committed crimes.

"No, because I didn't," he replied. "Obviously, I'm disappointed but that's the way the system works."

Lake set sentencing for Sept. 11. Lay's charges carry a maximum penalty of 45 years in prison for the corporate trial and 120 years in the personal banking trial. Skilling's charges carry a maximum penalty of 185 years in prison.

As Lake read the verdict from the bench, Lay tossed his head at hearing the first "guilty" on the conspiracy count. He clutched his wife's hand as he heard that word over and over again.

Lay sat with his wife, Linda; his daughter, Elizabeth Vittor, a member of his defense team; and Linda Lay's daughter, Robyn. As Lay clutched Linda Lay's hand, the three women leaned forward and began to sob quietly.

After Lake left the courtroom, Lay's family and some friends gathered around him as the ex-chairman, red-faced and fighting back tears, hugged them and thanked them for their support.

Skilling, sitting with his brother, Mark, showed no emotion when the verdict was read.

The sentencing will come five years almost to the day after Skilling sold 500,000 shares of Enron stock for $15.5 million, for which he was convicted of insider trading.

Skilling's $5 million bond, which restricts him to the continental U.S., remains in effect. Lay, who surrendered his passport, posted a $5 million bond secured with family-owned properties at a hearing following the verdict.

The Enron founder was also ordered to stay in the Southern District of Texas or Colorado, avoid contact with any victim of the offense charged, report to pretrial services regularly and must not own a gun or use alcohol excessively or drugs at all.

Asked if he understood the conditions, Lay said, "I do, your Honor."

The former corporate titans are now felons facing years in prison after being convicted of running an elaborate fraud that gave the company a glamorous illusion of success.

Jurors declared through their verdict that both men repeatedly lied to cover a vast web of unsustainable accounting tricks and failing ventures that shoved Enron into bankruptcy protection in December 2001.

The conviction was a major win for the government, serving almost as a bookend in an era that has seen prosecutors win convictions against executives from WorldCom Inc. to Adelphia Communications Corp. and homemaking maven Martha Stewart. The public outrage over the series of corporate scandals led Congress to pass the Sarbanes-Oxley act, designed to make company executives more accountable

"This verdict encourages us to continue to combat corruption wherever we find it," said Deputy Attorney General Paul McNulty, at the Justice Department in Washington. "We will continue to pursue, relentlessly, this type of corruption. No one, including the heads of Fortune 500 companies, is above the law."

Enron's demise alone took with it more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs.

The panel rejected Skilling's insistence that no fraud occurred at Enron other than a few executives skimming millions from secret scams behind his and Lay's backs, and a lethal combination of bad press and poor market confidence sank the company.

Both men testified in their own defense. Skilling is expected to appeal.

The government's victory caps a 4½-year investigation that garnered 16 guilty pleas from ex-Enron executives, including former Chief Financial Officer Andrew Fastow and former Chief Accounting Officer Richard Causey.

All are awaiting sentencing later this year except for two, who either finished or are still serving prison terms.

"You can't lie to shareholders," said Sean Berkowitz, director of the Enron Task Force. "You can't put yourselves in front of your employees' interests. No matter how rich and powerful you are, you have to play by the rules."

He expressed sympathy for the Enron employees who lost their life savings when the company collapsed.

"Nothing that happened today is going to bring that back for them. ... What we do hope is that today's verdict lets them know that the government will not let corporate leaders violate their trust and get away with it."

Prosecutor John Hueston, who sparred with Lay on the stand, said the founder had missed "a golden opportunity to save Enron."

"He made a fateful choice in late 2001. He made that choice to put his own interests ahead of that of the shareholders and investors. He did that by choosing not to tell the unvarnished truth," Hueston said.

The Lay-Skilling case tested the federal government's ability to prove complicated corporate skullduggery.

Enron's implosion and the subsequent scandals scared off investors, increased regulatory scrutiny over publicly traded companies and prompted Congress to stiffen white collar penalties.

The government's vast investigation seemed to stall until Fastow pleaded guilty in January 2004 to two counts of conspiracy and paved the way for prosecutors to secure indictments against his bosses. Fastow also led investigators to Causey, who was bound for trial alongside Lay and Skilling until he broke ranks with their unified defense and pleaded guilty to securities fraud just weeks before the trial began.

Jurors: Trial Took Its Toll

The jury of eight women and four men received the case on May 17. The judge told jurors, "You have reflected on this evidence for the last few days and reached a very thorough verdict, and I thank you."

Jurors said the four-month trial, which began on Jan. 30, took an emotional and financial toll.

"I think fatigue took a big role in what we went through," said a juror who owns her own business.

The panel said they liked and admired Lay and Skilling, but the facts and evidence made their job easy.

"When (Lay) spoke, he kind of commanded the room when he answered questions," juror Wendy Vaughan said. "He just seemed very focused, a little of a chip on his shoulder. I think it made me question his character at that point, how controlling he might be."

"In all honestly, in the very beginning of the trial I admired both men," Vaughan said. I thought they were brilliant. I think they had a lot of talent and they probably, for the most of their career, did a lot of good. It was sad to see that, in the end, it wasn't accomplished in a respectful manner, having to hurt so many people to get there."

Jurors were asked if they factored in all of the lives affected by the Enron collapse or the philanthropic nature of Lay in the past.

"There was no emotion in reaching this verdict. We only looked at the facts," jury forewoman Debra Smith said. "No one is above the law."

Jurors said there was not one single piece of evidence that was a deciding factor, but rather the totality of it.

"We're confident in our decision. It was a very difficult thing, but I do feel that justice prevailed," an unidentified juror said.

Juror Doug Baggett, a legal department manager, said the panel felt like a ping-pong ball, swaying from the prosecution to the defense, until the final vote was taken.

The panel formed a bond through the lengthy trial.

Juror Freddy Delgado is an elementary school principal.

"We've been together for four months," Delgado said. "We’ve cried together. We've laughed together. We really became more than just friends. I believe we are a family. We've supported each other with all the different things that happened within our lives in these four months."

"Financially, it was extremely difficult," said alternate juror Amanda Perry, a 23-year-old single mother. "I would do it all again because I learned so much."

Former Enron Employees React To Verdicts

Many former employees of Enron were relieved to hear that Skilling and Lay were convicted.

"I think they're getting what they deserve," said Eric Eden, a former Enron employee. "I was one of the guys who use to sit around in the office defending Enron when we talked about if it was a house of cards or not. I was of the opinion we could trust the guys above us. If that's what they were telling us, that must have been what was real."

Eden said it was hard to learn the truth about the company and its leaders. He does not feel bad that Skilling and Lay now face years in federal prison. Lay could spend the rest of his life behind bars.

"I don't feel sorry for (Lay) at all. I really admired Ken Lay and his management skills were unbelievable. He deceived all of us. I really think that he should have had the rug pulled out from him a long time ago," Eden said, but added, "I feel the most empathy for Ken Lay, not much for Jeff Skilling.

"I think (Lay) made a comment about having to maintain his lifestyle to some degree throughout this period of time. There's a lot of Enron employees, myself included, that didn't get to continue the same lifestyle we had from day 1," Eden said.

Paula Cory worked in businesses services and broadband at Enron for six years.

"I'm happy," Cory said. "It's kind of like closure. It's been four really long years. This feels good today. It feels right."