updated 8/2/2006 8:45:28 AM ET 2006-08-02T12:45:28

A federal appeals court on Tuesday reversed several convictions against four former Merrill Lynch executives found guilty of helping engineer Enron’s 1999 sale of mobile power plants to the brokerage to help the energy trader appear to have met earnings targets.

The three-judge panel of the 5th U.S. Circuit Court of Appeals found fault with the government’s theory of fraud that led to the wire fraud and conspiracy convictions of James A. Brown, William Fuhs, Daniel Bayly and Robert S. Furst. Bayly is Merrill’s former head of investment banking.

The panel also ruled that the evidence was insufficient in Fuhs’ case but upheld Brown’s perjury and obstruction of justice convictions.

They were among five former executives found guilty of one count of conspiracy and two counts of wire fraud in November 2004 in connection with the sham sale of power barges anchored off the coast of Nigeria.

The four defendants had appealed on several grounds, including problems with jury instructions and the government’s arguments of criminal liability and deprivation of honest services.

The appeals court said the scheme fell outside the limits of honest-services fraud because the executives acted to ensure that the company benefited and not themselves personally.

The panel said it did not need to address the defendants’ other appeals claims because its assessment of the flawed honest-services component was sufficient to make the ruling.

Messages left with defense attorneys and the Enron Task Force were not immediately returned Tuesday night. A Justice Department spokesman told The Wall Street Journal the government was reviewing the decision and assessing its options.

The barges were the primary asset of Enron’s energy division in 1999, and the company was pressured to sell them to show a gain and meet earnings targets. But several deals collapsed and Enron Corp. turned to Merrill Lynch, which bought the assets to make Enron’s earnings appear larger.

The four defendants were tried together along with two other executives: former in-house Enron accountant Sheila Kahanek and former midlevel Enron finance executive Dan O. Boyle.

Kahanek was acquitted. Boyle was found guilty of conspiracy, fraud and lying to congressional investigators. He did not appeal his conviction.

A federal appeals court ruled in June that Bayly and Furst could post bond and be released from prison pending their appeals.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com