HOUSTON -- A jury convicted four former Merrill Lynch & Co. executives and a former midlevel Enron Corp. finance executive of conspiracy and fraud yesterday in the first criminal trial to emerge from Enron's 2001 collapse.
The deal involved a bogus sale of interest in power plants mounted on barges to the brokerage at the end of 1999 so the company could appear to have met earnings targets.
A sixth defendant, a former in-house Enron accountant, was acquitted. Sheila Kahanek testified she consistently opposed a verbal promise that the government contended made the deal a loan -- that Enron would resell or buy back Merrill's interest within six months.
Those convicted of conspiracy and two counts of wire fraud were: Daniel Bayly, Merrill's former head of investment banking; James A. Brown, former head of Merrill's asset lease and finance group; William Fuhs, a vice president who reported to Brown; Robert S. Furst, a former manager of Merrill's relationship with Enron; and Dan O. Boyle, a former Enron finance executive.
The verdict came after 21 hours of deliberations. The jury was instructed to return today for the sentencing phase of the trial.
The barge deal isn't among the numerous alleged financial machinations that pushed one-time Wall Street darling Enron into bankruptcy in December 2001, as a web of accounting maneuvers to prop up its books unraveled.
But the government contends the barge deal was an example of many illegal accounting schemes Enron used to pump up its appearance of financial success.