The U.S. Supreme Court Thursday said the government was limited in bringing new criminal charges against a former Enron Corp. executive because of double jeopardy issues. Separately the Fifth U.S. Circuit Court of Appeals this week said the government might be able to make a new case against three defendants in another Enron-related case.
On Thursday the Supreme Court ruled 6-3 that federal prosecutors would be limited because of double jeopardy in bringing new charges against Scott Yeager, a former vice president of business development at Enron Broadband Services (EBS). Yeager was charged, along with other former EBS executives, with making false claims about the success of the EBS network to pump up the company's stock price (see Daily GPI, April 19, 2005).
Yeager was acquitted in his first trial on fraud charges. In the second trial a jury failed to reach a verdict on whether Yeager was guilty of insider trading. A U.S. district court and the Fifth U.S. Circuit Court of Appeals earlier ruled that Yeager could be retried on insider trading charges.
However, writing for the majority, Supreme Court Justice John Paul Stevens said "the fact that petitioner has already survived one trial should be a factor in cutting in favor of, rather than against, applying a double-jeopardy bar" (Yeager v. U.S., 08-67).
Meanwhile, the Fifth Circuit this week upheld a Houston district court judge's 2008 ruling to retry three former Merrill Lynch & Co. executives on charges they helped Enron defraud shareholders. A jury in November 2004 convicted Daniel Bayly, James A. Brown and Robert S. Furst of conspiracy and fraud involving a 1999 transfer by Enron to Merrill of three Nigerian power barges when Enron was under pressure to sell assets to meet a 1999 profit target (see Daily GPI, Nov. 4, 2004).
The three men were sentenced the following year (see Daily GPI, May 16, 2005). The circuit court in New Orleans overturned the jury's decision in 2006, finding that the government had tried the case improperly by charging the defendants with theft of "honest services." The district court then ruled the men could be retried if the prosecution used different charges, and a three-judge panel of the circuit court agreed.
"Our reversal was premised narrowly and solely on the failure of the honest services charge," Fifth Circuit Court Senior Judge Thomas Reavley wrote. "The opinion implicitly, if not explicitly, recognized the possibility that criminal wrongdoing might be proved in a retrial."
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