Tuesday, July 23, 2024

Merrill personnel to be retried on Enron

HOUSTON (AP) – Three former Merrill Lynch & Co. executives whose 2004 fraud and conspiracy convictions connected to an Enron Corp. deal were overturned last year will be retried in January, a judge said Wednesday.
James A. Brown, Daniel Bayly and Robert S. Furst were convicted of conspiracy and wire fraud for helping push through Enron’s sham sale of three power barges moored off the coast of Nigeria to the brokerage in 1999.
Jurors also convicted William Fuhs, a fourth Merrill Lynch executive, as well as Dan Boyle, a former Enron finance executive. The jury acquitted in-house Enron accountant Sheila Kahanek.
A three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans last year overturned most of the convictions against Brown, Bayly and Furst. The cases were sent back for prosecutors to decide how to proceed.
Fuhs had his convictions erased for lack of evidence and cannot be retried. Boyle did not appeal and is serving a three-year, 10-month prison term.
While federal prosecutors and defense attorneys for Bayly, Brown and Furst said they have been open to some sor24t of plea deal to avoid a second trial, both sides said such discussions have been unsuccessful.
‘We are planning on getting ready for trial,’ said Paul Coggins, Furst’s attorney. ‘Our clients don’t relish the thought of going through another trial. We had hoped it was over.’
Assistant U.S. Attorney Arnold Spencer said prosecutors were still open to some sort of plea deal.
‘But we are committed to going to trial,’ he said.
Dan Cogdell, Brown’s attorney, said he is hoping to resolve the case with a civil resolution through a settlement with the Securities and Exchange Commission.
‘There are going to be some pretty serious attacks on these charges,’ said Thomas Hagemann, an attorney for Bayly.
U.S. District Judge Ewing Werlein Jr. scheduled jury selection for the retrial to begin Jan. 28 in Houston federal court. The retrial was expected to last three to four weeks.
Bayly, Merrill Lynch’s former head of investment banking, and Furst, Merrill’s former Enron relationship manager, are free on bond. Bayly was serving a 2 1/2-year sentence. Furst was serving a sentence of three years and a month.
Brown, originally sentenced to a three-year, 10-month term, remains in prison. The appeals court upheld his convictions of perjury and obstruction of justice for lying to a grand jury about the nature of the deal. His attorneys are appealing that decision.
Bayly, Brown and Furst appealed their convictions on several grounds, including problems with jury instructions and the government’s arguments of criminal liability and deprivation of honest services.
In the first trial, prosecutors argued the sale of the three power barges was really a loan because Enron promised to resell or buy back Merrill’s $7 million interest within six months.
The appeals court said the scheme fell outside the limits of honest-services fraud because the executives acted to ensure that the company benefited and not themselves personally.
Spencer filed a motion Wednesday to remove all references to deprivation of honest services in the indictment, and he said this theory will not be part of the retrial.
‘It will be a much simpler trial than the first time around,’ Spencer said.
But defense attorneys disagreed.
‘I think it’s going to be far more complex than the government thinks,’ Coggins said.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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