Updated from 2:05 p.m. EDT

Kenneth Lay was accused by the government Thursday of playing an active role in the accounting fraud that led to the collapse of Enron, the company he founded and helped run for 15 years.

The allegations, contained in separate criminal and civil cases coinciding with Lay's arrest in Houston, contrast sharply with his image as an aloof corporate figurehead whose lax oversight allowed a cadre of top executives to run amok.

Lay surrendered to federal authorities and pleaded innocent to an 11-count indictment that alleged the now-familiar litany of fraud and conspiracy charges that have been leveled against most of Enron's former senior management. The 62-year-old Texan faces the possibility of decades-long incarceration if convicted.

"I have done nothing wrong," Lay said in a statement released after his arrest. At a subsequent press conference, he blamed the scandal on former chief financial officer Andrew Fastow, who has already pleaded guilty in the case.

"My worst mistake was entrusting someone in the chief financial officer job who chose to use that position for his own enrichment," Lay said. "But that's with 20-20 hindsight. I knew nothing at the time that would've given me suspicion as to what was going on."

A separate civil complaint released by the Securities and Exchange Commission said the government will seek the return of $90 million Lay pocketed by selling Enron stock, plus other penalties. Together, the cases paint a new picture of Lay as a hands-on conspirator who lied and cynically unloaded shares while tens of thousands of employees and shareholders saw their lives ruined by the company's insolvency.

Enron, once the seventh largest company in America, declared bankruptcy in December 2001 after a series of debt downgrades made it impossible to pursue its main business of energy trading. More than two dozen other employees face charges they helped think up and implement the phony accounting that lifted the stock close to $100 in the months before it became virtually worthless.

"As Enron's chairman and chief executive, Lay was an engaged participant in the ongoing fraud, and must therefore be called to account for his actions," the SEC said in a release.

As it has in previous proceedings against former CEO Jeffrey Skilling, former Chief Accounting Officer Richard Causey and Fastow, the crux of the government's case against Lay rests on the theory that his public statements about Enron were at odds with his knowledge of the company's true financial condition.

Much of the case against Lay stems from the period after Skilling abruptly left Enron in August 2001, just months before it was forced to reveal its complex array of off-balance-sheet structures. The indictment uses Lay's own words against him. In particular, it focuses on statements Lay made during the fall of 2001, in which he tried to reassure investors and Enron employees that everything at the company was fine.

If you liked this article you might like

Spain to Play Netherlands for World Cup

Spain to Play Netherlands for World Cup

Wal-Mart: Analysts' Upgrades, Downgrades

Wal-Mart: Analysts' Upgrades, Downgrades

Netherlands Advances to World Cup Final

Netherlands Advances to World Cup Final

Apple: Analysts' Upgrades, Downgrades

Apple: Analysts' Upgrades, Downgrades

World Markets Mostly Lower Monday

World Markets Mostly Lower Monday