A federal judge in Houston moved up the beginning of a criminal trial to early June against two former Enron Corp. executives and four ex-Merrill Lynch bankers for their alleged involvement in a fraudulent asset sale that helped the bankrupt energy giant meet 1999 profit targets.
The defendants had requested a delay in their upcoming June 14 trial on the grounds that there were two million pages of documents turned over by the prosecutors that they needed to review. Instead, U.S. District Judge Ewing Werlein not only denied the delay but moved it up one week to June 7. The trial is expected to take about six weeks.
If the trial date holds, it may coincide with the trial of Lea Fastow, Enron’s former assistant treasurer and wife of ex-CFO Andrew Fastow. A plea agreement fell apart earlier this month for Lea Fastow, and she is scheduled for trial in early June in Brownsville, TX, unless another plea deal is put together and approved by the court (see Daily GPI, April 8).
Those facing trial are former Enron finance executive Dan Boyle and ex-Enron accountant Sheila Kahanek, along with ex-Merrill bankers Daniel Bayly, James Brown, William Fuhs and Robert Furst.
The former executives were charged by the Enron Task Force last year (see Daily GPI, Sept. 18, 2003). The Department of Justice alleges that the ex-Merrill bankers violated criminal law, aided and abetted Enron’s violation of criminal law and knowingly caused others to make false statements to a grand jury, the U.S. Congress, the Securities and Exchange Commission (SEC) and the Enron bankruptcy examiner. All of the defendants have pleaded not guilty and remain free pending their trial.
Civil charges also were filed in 2002 against Merrill by the SEC, and the firm settled for $80 million, which was directed to a fund to benefit the victims of Enron’s fraud (see Daily GPI, Feb. 24, 2003).
Prosecutors allege that former Enron treasurer Ben Glisan conspired with Andrew Fastow, Boyle, Merrill and others to fraudulently improve Enron’s balance sheet by illegally “parking” some generating barges located off the coast of Nigeria, first with Merrill and then with Enron in an off-balance sheet transaction known as LJM. The transaction allowed Enron to record $12 million in earnings and meet a quarterly target it otherwise would have missed.
Glisan pleaded guilty to one count of criminal conspiracy and is serving a maximum five-year sentence (see Daily GPI, Sept. 11, 2003). Fastow pleaded guilty earlier this year, and he faces a 10-year prison sentence. Fastow is currently cooperating with the task force (see Daily GPI, Jan. 15, 2004).
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