A former Enron Corp. executive and two former Merrill Lynch bankers were sentenced to prison last Thursday for their roles in a sham deal in which Enron "sold" electricity-producing barges in Nigeria to the bank and then bought them back at a pre-set price. The men were convicted with two other Merrill executives last November for their roles in the bogus transaction.
U.S. District Court Judge Ewing Werlein Jr. sentenced Dan O. Boyle, an ex-Enron executive, to three years and 10 months, while ex-bankers Robert Furst and William Fuhs each received three years and one month in prison for fraud and conspiracy. Furst and Fuhs must each pay $665,000 in fines and restitution, while Boyle was ordered to pay $320,000.
Prosecutors had asked for double-digit sentences, but Werlein reiterated Thursday that he rejected the government's theory that investors lost $43.8 million by overpaying for Enron shares after the barge deal helped the company hide losses on its books, the main factor supporting lengthy prison terms. The barge transaction "would appear to have been one of the smaller and more inconsequential frauds committed by these conspirators at Enron," Werlein said.
In April, Werlein sentenced Merrill's Daniel Bayly to two and a half years in prison, while James Brown received three years and 10 months for their roles in the transaction.
The judge noted that other higher-level Enron executives, including former CFO Andrew Fastow, had played more critical roles than Boyle in the barge transaction. Fastow pleaded guilty to conspiracy in January 2004 and will serve 10 years in prison. Fastow will not be sent to prison until the Enron Task Force completes its investigation.
The judge called Boyle's prison term "sufficient but not greater than necessary." In turn, Boyle told the judge that he was the only person responsible for his actions, "and the pain I've caused to each and every person I've affected. I'm truly sorry."
Werlein agreed to ask the Federal Bureau of Prisons to not order Furst to prison until he celebrates his 20th wedding anniversary on June 29. Furst's role was to maintain a good relationship with Enron, the judge noted. During the sentencing, Furst told the judge Thursday, "today is a new low for me. All of my hard work, my reputation and character are down the drain."
Werlein told Fuhs following the sentencing that "getting this behind you is probably the best thing you can do at this time." He noted that Fuhs was less culpable than most of the other participants, but he said he believed that Fuhs had lied to investigators. Fuhs said that he was "so sorry for any pain this has caused. I will go forward with my life."
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