Risk & Compliance

Three More Sentences in Enron Barge Deal

In handing down prison terms, the judge reportedly observed that senior Enron executives engaged in far more serious financial crimes.
Dave Cook and Stephen TaubMay 13, 2005

A former Enron Corp. executive and two former Merrill Lynch & Co. bankers were sentenced Thursday for their roles in the infamous Nigerian barge deal.

Dan Boyle, a former mid-level executive in the energy company’s finance department, received a sentence of 3 years and 10 months in prison and must pay fines and restitution totaling $320,000, according to published reports. Former Merrill Lynch bankers Robert Furst and William Fuhs were sentenced to 3 years and 1 month in prison; each must pay $665,000.

All three defendants had been found guilty of one count of conspiracy and two counts of wire fraud; in addition, Boyle had been found guilty of one count of making false statements.

Boyle, Furst, and Fuhs, as well as former Merrill Lynch executives Daniel Bayly and James Brown, were convicted in November for their roles in 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 at the time.

Last month Judge Ewing Werlein Jr. of U.S. District Court in Houston sentenced Bayly to 30 months in prison plus six months of supervised release, according to Bloomberg. Brown received a prison sentence of 46 months followed by a year of supervised release. Each was fined $840,000. Although prosecutors had sought much harsher sentences, at the time the judge said that “in the constellation of the Enron frauds,” the barge deal was “rather small and relatively benign,” reported the Associated Press.

Yesterday the judge again observed that senior Enron executives engaged in far more serious financial crimes, according to Reuters. Judge Werlein reportedly added that the Nigerian barge deal “appears to be one of the smaller and more inconsequential frauds committed by those conspirators.” (Many of those acts, notes senior writer Tim Reason, are outlined more graphically in the new documentary about Enron, The Smartest Guys in the Room.)

Noting that Boyle was a low-level employee who served a minimal role in the deal, the judge sentenced him to a prison term that is “sufficient but not greater than necessary,” according to the AP. In fact, it is the minimum sentence allowable under federal sentencing guidelines, reported Reuters.

In a brief statement to the court, according to the AP, Boyle said, “I am the only one responsible for my acts and omissions…I’m truly sorry.”

“Today is a new low for me,” Furst told the judge in a choked voice, added the wire service. “All of my hard work, my reputation and character are down the drain.” The AP also noted that Furst will probably not be required to report to prison until after his 20th wedding anniversary, on June 29.

Said Fuhs, “I am so sorry for any pain this has caused. I will go forward with my life.”