November 4, 2004
Five Convicted and One Acquitted in the First Criminal Trial Related to Enron
Five defendants (four former executives of Merrill Lynch and one fomer executive in Enron's finance division) were convicted yesterday after a six week trial in the first Enron related criminal case. The New York Times reports that "the case - centered on a single transaction involving what the government argued was a bogus sale of an interest in barges by Enron to Merrill." According to the New York Times, the lone defendant not convicted "testified that she had warned Enron executives many times that the company could not properly provide Merrill with a guaranteed profit or a commitment to repurchase the barges." The Wall Street Journal reports that "to date, some 30 individuals have been criminally charged. " This includes former Enron Chair Kenneth Lay who awaits trial.
Yesterday's case, however, is not over. Those who were convicted are back in court today for the jury to hear evidence for the purpose of sentencing. The reason for this sentencing hearing results from the recent Supreme Court decision in Blakely v. Washington. Although the Supreme Court has not specifically held that the Blakely decision applies to the federal sentencing guidelines, the government appears to be taking no chances. They will be presenting evidence to the jury on the amount of the loss, a factor that can serve as a sentencing enhancement.