updated 4/21/2005 8:32:10 PM ET 2005-04-22T00:32:10

Enron founder Kenneth Lay's trial on charges related to his personal banking will be held next year, a judge decided Thursday.

Lay, who faces a separate trial on fraud and conspiracy charges scheduled to begin in January, is accused of lying to banks about his intention to use their loans to buy Enron stock on margin before the company crashed in December 2001. Prosecutors had wanted the banking trial to begin as early as next month.

"The desire to try this case fairly outweighs expedition," U.S. District Judge Sim Lake said.

The case will go to trial within a "couple of hours" of the start of deliberations in the fraud and conspiracy case, Lake said. The fraud and conspiracy trial, which includes former Enron CEO Jeffrey Skilling and former top accountant Richard Causey, is expected to last several months.

Lay's late-afternoon hearing capped a busy day in the Houston courthouse involving Enron cases.

Earlier Thursday, two former Merrill Lynch & Co. executives were sentenced for their roles in a bogus Enron sale of power barges, although the terms fell far short of what the government sought.

Daniel Bayly, former head of investment banking for Merrill Lynch, got 2 1/2 years in prison. James A. Brown, former head of the brokerage's asset lease group, was sentenced to three years, 10 months. Each was ordered to pay $840,000 in fines and restitution.

The government had recommended up to 15 years for Bayly and up to 33 for Brown.

Meanwhile, testimony continued for a fourth day in the trial of Enron's failed broadband operation . The government contends Enron's former broadband executives made false claims of advanced network capabilities so they could get rich by selling company stock inflated by the hype.

Lay said in court papers last week and repeated in court Thursday that he wanted Lake to hear and decide the banking case as jurors deliberate the verdict of the fraud and conspiracy case.

Prosecutors expressed concern that Lay may decide later he wants a jury trial on the bank charges. Lake questioned Lay to make sure he understood he was giving up his right to a jury trial.

"We have confidence in your honor and think a bench trial is the most appropriate way for it to be decided," Lay told the judge.

"I think it's a very wise ruling. There obviously has been a lot of gamesmanship by the task force and by me," said Mike Ramsey, Lay's attorney. He called Lake "the best fact-finder."

In the Merrill Lynch case, U.S. District Judge Ewing Werlein, who sentenced the Darien, Conn., men, criticized the government's pursuit of a term longer than the one former Enron finance chief Andrew Fastow received.

Fastow, who ran bogus schemes that rotted Enron, had faced 98 counts including fraud, conspiracy, insider trading and money laundering. Last year he pleaded guilty to two counts of conspiracy for hiding Enron debt and inflating profits while pocketing millions for himself.

A decade is the maximum sentence for two conspiracy counts, though Fastow can shave a year and a half from that with good time credit.

Werlein said the term awaiting Fastow and the five years being served by former Enron treasurer Ben Glisan Jr. "established some benchmarks" for the defendants in the barge case. The judge said the Merrill defendants faced "unjustified disparate sentences" in comparison.

Fastow likely won't go to prison until after prosecutors no longer need his cooperation, which will include testimony in the trial involving Lay, Skilling and Causey.

© 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