MER ,,, Last of Enron Barge Defendants Sentenced
Thursday May 12, 8:28 pm ET
By Kristen Hays, AP Business Writer
Last of Enron-Merrill Lynch Barge Defendants Sentenced to More Than Three Years in Prison
HOUSTON (AP) -- A former midlevel Enron finance executive who helped push through a sham deal with Merrill Lynch will serve three years and 10 months behind bars, a judge ruled Thursday.
Dan O. Boyle and four former executives of Merrill Lynch & Co. were convicted last year of conspiracy and fraud. They helped push through Enron's bogus 1999 sale to the brokerage of power plants mounted on barges so the energy company could disguise a loan as a sale on the books.
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While U.S. District Judge Ewing Werlein said the barge deal was hatched within Enron before Merrill defendants were enticed to play along, he also noted Boyle was a low-level employee who served a minimal role in the deal.
Robert Furst of Dallas, a former Merrill executive whose job was to maintain a good relationship with Enron, and William Fuhs of Denver, the least senior of the Merrill defendants, were each sentenced on Thursday to three years and a month in prison.
Werlein agreed to ask the Federal Bureau of Prisons to order Furst to report to prison after he celebrates his 20th wedding anniversary June 29.
The judge told Fuhs he had "great potential" and that "getting this behind you is probably the best thing you can do at this time."
Furst and Fuhs must each also pay $665,000 in fines and restitution. Boyle must pay $320,000.
Werlein said other higher-level Enron executives played more critical roles than Boyle, such as former finance chief Andrew Fastow. Fastow promised that Enron would buy back the barges on a specified timeline, which made the sale a loan. Fastow pleaded guilty to conspiracy last year and will serve a decade in prison when the government no longer needs his help with other cases.
Boyle, of Houston, also was convicted of lying to congressional investigators about the illegal nature of the loan.
Prosecutor Kathryn Ruemmler said Boyle lied during his trial testimony as well. Boyle first claimed to have realized the deal was illegal after he was indicted two years ago, and later said he knew it was wrong while he was helping push it through.
The judge called Boyle's prison term "sufficient but not greater than necessary."
Boyle told the judge he was the only person responsible for his actions and omissions "and the pain I've caused to each and every person I've affected. I'm truly sorry. Thank you."
The barge deal didn't fuel Enron's 2001 crash, but the case ensnared a bit of Wall Street for joining in Enron crimes to please what was then a lucrative client.
The two most senior of the Merrill defendants were sentenced last month.
Federal probation officials had pushed for Furst and Boyle to serve double-digit sentences but Werlein -- in keeping with his rejection of such sentences for the other two barge felons last month -- imposed lesser punishments. Probation officials recommended seven to nine years for Fuhs.
"Today is a new low for me," Furst told the judge in a choked voice. "All of my hard work, my reputation and character are down the drain."
Werlein said that Fuhs was less culpable than most other participants in the scheme but believed that Fuhs had lied to investigators as well as during the trial.
"I am so sorry for any pain this has caused," Fuhs told the judge. "I will go forward with my life."
Werlein reiterated Thursday his rejection of the government's theory that investors lost $43.8 million by overpaying that amount for Enron shares after the barge deal helped the company cook its books, the main factor supporting lengthy prison terms.
The barge fraud "would appear to have been one of the smaller and more inconsequential frauds committed by these conspirators at Enron," the judge said.
The sentences of Furst and Fuhs lie between the 2 1/2 years Werlein imposed last month for Daniel Bayly, Merrill's former head of investment banking, and the three years and 10 months he imposed for James A. Brown, former head of the brokerage's asset lease group. Boyle's punishment matches that of Brown.
Brown and Bayly also were ordered to each pay fines and restitution of $840,000.
Associated Press Writer Juan A. Lozano contributed to this report.
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