Thursday, May 12, 2005
The three remaining defendants in the Enron Nigerian Barge prosecution were sentenced today by U.S. District Judge Ewing Werlein. Former Merrill Lynch bankers Robert Furst and William Fuhs each received 37 month terms of imprisonment, which is in the range of sentences given the first two Merrill defendants sentenced, Daniel Bayly and James Brown, who received 30 and 46 months respectively. The sentencing recommendation in the Presentence Report prepared by the U.S. Probation Office was 15 years for Furst, based on the jury's loss calculation. The judge also said he would ask the Bureau of Prisons to postpone the beginning of Furst's sentence until after his 20th wedding anniversary on June 29. Former Enron executive Dan Boyle received a 46 month term, the same sentence as Brown. The judge denied requests by all the defendants to remain free pending appeal. A story in the Houston Chronicle (here) discusses the sentencings.
Tom Kirkendall has an interesting post (here) on his Houston's Clear Thinkers blog about Bayly's appeal of the bail denial that foreshadows the arguments he (and the other defendants no doubt) will make in the full appeal of the conviction. The post contains a link to the brief. Tom writes:
The brief previews Mr. Bayly's arguments on appeal, which are focused on the paucity of direct evidence linking Mr. Bayly to the transaction, the hearsay nature of the evidence that did, and the refusal of Judge Werlein to instruct the jury on a key defense theory. That key defense theory is that an Enron promise to Merrill Lynch to arrange a sale of the barges within six months to a third party -- as opposed to an Enron promise to repurchase the barges within that time frame -- did not undermine Enron's accounting of the transaction and did not constitute the basis of a crime. Inasmuch as Enron ultimately arranged for such a sale to a third party as opposed to buying back the barges from Merrill itself, the lack of a jury instruction on that issue appears to be a solid basis for Mr. Bayly's appeal.
It will be interesting to see if the Fifth Circuit is receptive to these arguments, and possibly previews the strength of them by granting bail pending the appeal. Recall that the court rejected the arguments of Arthur Andersen in the first of the Enron-related prosecutions, a position that does not appear to be favored by the Supreme Court. With the passage of time and a transaction that is overshadowed by the much larger pending conspiracy prosecution of former Enron CEOs Ken Law and Jeff Skilling, the circuit court may be a bit less favorable to the government in its review of this phase of the Enron prosecutions. (ph)