Enron barge fraud cost investors $13.7 million
A jury in federal court in Houston that recently convicted five former executives from Enron Corp. and Merrill Lynch & Co. of fraud has determined that an alleged barge scam cost investors $13.7 million.
In 1999, Enron sold Merrill Lynch a $7 million stake in three energy-generating barges moored of the coast of Nigeria. The U.S. Justice Department said the sale was a loan in disguise, because Enron promised to pay Merrill Lynch back. The government also alleged that Enron committed an act of fraud when it listed the loan as a $12 million profit, in order to meet estimates of earnings.
The jury convicted the following executives on one count of conspiracy and two counts of wire fraud: Daniel H. Bayly, 57, former Merrill Lynch investment banking chief; James A. Brown, 52, former chief of Merrill Lynch’ s strategic financial group; Robert S. Furst, 43, a former Merrill Lynch managing director; William R. Fuhs, 36, a former Merrill Lynch vice president; and Daniel O. Boyle, 48, formerly an finance executive with Enron.
The jury also convicted Brown on two counts of making false statements and Boyle on one court of making a false statement. A sixth defendant, Sheila K. Kahanek, a former Enron accountant, was acquitted.
The ruling of fraud in the alleged barge scam can be used by U.S. District Judge Ewing Werlein in determining prison terms for the defendants, who are to be sentenced next March according to the present court schedule.