Judge Rules Enron-Involved Man is No Conspirator

During its heyday in 1999, Enron sold three power plants, mounted on barges and anchored off the coast of Africa, to Merrill-Lynch. But federal attorneys in Texas alleged the sale was a disguised loan, calling for Enron executives to either resell or buy back the barges within six months. The bogus profits from the so-called Nigerian barge case, they said, were designed to cosmetically boost Enron’s year-end earnings, hiding the company’s real worth.

In 2004, three Merrill employees, amongst others, were convicted of crimes stemming from the transaction, including fraud and conspiracy. The prosecuted parties included Daniel Bayly, former head of investment banking; Robert Furst, Merrill’s former Enron liaison; and James Brown, former head of the asset lease group. On the fraud charge, they faced a jail term of up to five years and/or a fine. The federal maximum sentence for conspiracy is five years.

Prosecutors alleged that the three were guilty of having deprived Enron of their honest services. However, an appellate court found these accusations wrong, because their actions were aligned with Enron’s goals; also, the defendants didn’t accept bribes or steal anything themselves. The convictions were overturned.

The fraud and conspiracy charges against Furst were subsequently dropped, and those against Bayly will be dropped in 2011, as part of a plea agreement. Those against Brown were dropped on Wednesday, Sept. 15, but he is still serving jail time for perjury, obstruction of justice, and lying to a grand jury.

In view of the serious penalties for fraud, conspiracy, and the other crimes connected with the Nigerian barge case, anyone at risk of litigation for these offenses is advised to contact an experienced Austin business law attorney.