Five Execs convicted in Enron Barge Case

By KRISTEN HAYS, Associated Press

HOUSTON (AP) - Four former Merrill Lynch  & Co. executives and a former midlevel  Enron Corp. finance executive have been convicted  of conspiracy and fraud in first criminal  trial of Enron and Wall Street executives  for their role in the energy company's 2001  collapse.

Five men were convicted Wednesday of helping  push through a bogus year-end 1999 sale of  interest in floating power plant barges to  the brokerage firm so Enron could appear to have  met earnings targets.

But the jury acquitted a former in-house  Enron accountant, Sheila Kahanek, who testified  she consistently opposed a verbal promise  that the government contended made the deal  a loan - that Enron would resell or buy back  Merrill's interest within six months.

"You can only hope and pray that the  jury saw the truth and that's what they did,"  said Kahanek, who was indicted more than a  year ago. "I can't tell you how wonderful  that is."

The verdict came after 21 hours of deliberations  in the six-week trial. The jury returned Thursday  for a sentencing phase, where experts for  the prosecution and defense are expected to  testify regarding financial loss tied to the  barge deal.

All the convicted defendants declined comment  Wednesday, appearing stunned and emotional  as they embraced their tearful wives. Most  of their lawyers also declined comment, though  some said they would appeal.

Christopher Wray, assistant attorney general  in Washington D.C., said the verdict "signals  that executives committing corporate fraud  will be vigorously investigated and prosecuted"  and "those who aid such fraud will meet  the same fate."

The barge case marked the first time Wall  Street bankers were charged with active participation  in a criminal Enron scheme. While Enron's  former auditor, Arthur Andersen LLP, was convicted  more than two years ago of obstruction of  justice for destroying Enron documents before  the collapse, the barge case was the first  to involve former Enron employees as defendants.

Those convicted of conspiracy and two counts  of wire fraud were: Daniel Bayly, Merrill's  former head of investment banking; James A.  Brown, former head of Merrill's asset lease  and finance group; William Fuhs, a vice president  who reported to Brown; Robert S. Furst, a  former manager of Merrill's relationship with  Enron; and Dan O. Boyle, a former Enron finance  executive.

Brown also was convicted of perjury and obstructing  a special grand jury in Houston for testifying  that he didn't know of a verbal buyback promise.  Boyle was convicted of lying to investigators  for a Senate subcommittee for saying the same  thing.

The five men face between a few months in  prison to up to 30 years, depending on how  many counts they were convicted of.

They were each given different 2005 sentencing  dates: Bayly, March 4; Boyle, March 10; Brown,  March 17; Fuhs, March 18; and Furst, March  24. All remain free on bail.

Contact us if you believe you may have  a suit.

Contact Us
Free Consultation: (800) 259-9010