In federal court in Houston, a jury convicted five of six defendants in the first criminal trial involving former energy giant Enron Corp. Four former executives of Merrill Lynch — James A. Brown, Daniel Bayly, William Fuhs, and Robert Furst — and a former mid-level Enron manager, Dan Boyle, were each convicted on one count of conspiracy and two counts of wire fraud, reported Bloomberg.
In addition, Brown was convicted on two counts of making false statements; Boyle was convicted on one such count. The verdicts followed 21 hours of jury deliberations, reported the Associated Press, following six weeks of testimony.
The case involved a $12 million sale of three electricity-generating barges off the coast of Nigeria in 1999. The government alleged that former Enron chief financial officer Andrew Fastow orally promised Merrill Lynch that if it pretended to buy the barges so Enron could fraudulently pump up its bottom line, then Fastow would guarantee the property would be bought back and Merrill Lynch would make a profit, the Houston Chronicle explained.
The barges were repurchased by an Enron side company that Fastow controlled, and Merrill Lynch did make a profit, added the newspaper, which noted that Merrill itself was not charged.
The sixth defendant in the case, former Enron accountant Sheila Kahanek, was acquitted by the jury on all counts, according to wire services. The AP reported that Kahanek had testified she had consistently opposed the oral promise by Enron that was at the heart of the government’s case.
According to Bloomberg, each count of conspiracy and wire fraud carries a maximum sentence of five years in prison; the false-statement counts, up to 10 years each.