| Former Merrill bankers, Enron executive convicted over Nigerian energy deal (04/11/2004) |
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| WASHINGTON (AFP) Four former Merrill Lynch bankers and a former Enron executive were convicted by a Texas jury on criminal charges for carrying out a fraudulent deal that helped the notorious energy trader inflate its earnings. A Houston jury delivered its finding Wednesday after hearing how Merrill Lynch extended millions of dollars to Enron, once the seventh largest US corporation, in a 1999 deal just before Enron reported its earnings to Wall Street. Under the deal's terms, Merrill acquired several Nigerian electricity- generating barges from Enron, which it then sold back to Enron after the energy trader had reported its earnings to Wall Street. The timely transaction allowed Enron to book a handsome 12 million dollar profit, helping it meet Wall Street earnings targets. Congressional lawmakers have said the deal "assisted Enron in cooking its books." Those convicte d Wednesday included ex Enron finance director Dan Boyle, James Brown, the former head of Merrill's asset lease and finance group, and ex Merrill bankers William Fuhs, Daniel Bayly and Robert Furst. The trial stemmed from an investigation of the energy trader's spectacular collapse into bankruptcy three years ago. "Today's verdict signals that executives committing corporate fraud will be vigorously investigated and prosecuted," said assistant US Attorney General Christopher Wray of the Department of Justice Criminal Division. "Those who aid such fraud will meet the same fate," Wray said in a statement. A sixth defendant, Sheila Kahanek, a one-time Enron accountant, was acquitted, according to media reports. The trial followed a series of congressional hearings in July 2002 at which senior Merrill executives were publicly hauled over the coals, Furst had pleaded the fifth amendment when called to testify before Congress. Internal Merri ll memos released at the time revealed a member of the Wall Street titan's banking group, who assessed the risks of the Nigerian barge swap, had questioned "reputational risks in aid/abet Enron income stmt (statement) manipulation." Under a subsequent government accord with Merrill, the brokerage agreed to a series of sweeping reforms to deter a repeat of such deals. The jury found the four bankers and the ex Enron executive guilty of conspiracy and two counts of fraud for their role in the 1999 deal. Other top Enron officials, including former chairman Ken Lay and former chief executive officer Jeff Skilling are awaiting trial. Former Enron chief financial officer Andrew Fastow has pleaded guilty and agreed to serve 10 years in prison. He has yet to be sentenced and is cooperating with prosecutors. | ||
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