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Bankers linked to Enron to be retried

The Merrill Lynch trio's convictions in the sham sale of a power barge had been thrown out.

February 17, 2007|From Bloomberg News

Three former Merrill Lynch & Co. bankers will be retried for their roles in an Enron Corp. fraud involving a sham sale of Nigerian power barges.

"We would prefer to try the case sooner rather than later," Arnold Spencer, the government's lead prosecutor, told U.S. District Judge Ewing Werlein Jr. at a hearing Friday in federal court in Houston.

A U.S. appeals court in New Orleans last year threw out the convictions of former Merrill bankers Daniel Bayly, Robert S. Furst and James A. Brown, ruling that they hadn't deprived Enron of their "honest services" because their actions, though possibly criminal, were in Enron's best interest. Prosecutors said Thursday that they wouldn't appeal that ruling to the U.S. Supreme Court.

The reversal of the 2004 verdicts was fatal to convictions in another Enron case and could boost chances for the appeal of former Enron Chief Executive Jeffrey K. Skilling, who is serving 24 years in prison for defrauding investors. He plans to appeal his conviction on similar grounds as early as March.

The bankers and a former finance executive at Houston-based Enron were found guilty of helping Enron disguise a $7-million loan as proceeds from the fake sale to Merrill of electricity- generating barges moored off the coast of Nigeria. Bayly and Brown received 30-month prison sentences; Furst got 37 months.

At Friday's hearing, Werlein urged both sides to resolve the matter without a trial. The defense said it was willing to pursue talks with the government. Prosecutors said they planned to pursue a new indictment of the defendants.

The verdict against a fourth former Merrill banker in the barge case, William Fuhs, was overturned for lack of evidence, and he can't be retried. All four were released from federal prisons last year. Brown, whose conviction for lying to investigators was upheld, has asked the Supreme Court to review that case.

Bayly, Merrill's former global chief of investment banking, was released from prison in June after serving a third of his sentence. Brown, a former strategic financial group chief, was released in August, having served a third of his term. Furst, a former managing director, was released in June after serving eight months of his sentence.

Dan Boyle, the former Enron executive convicted alongside the bankers, remains in prison, having dropped his appeal.

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