First Enron criminal trial postponed again

The first criminal trial involving former Enron Corp. executives has been delayed to allow defense attorneys to prepare for the government’s intention to seek enhanced prison sentences.

U.S. District Judge Ewing Werlein on Tuesday postponed the Aug. 18 conspiracy trial of four former Merrill Lynch & Co. executives and two former midlevel Enron executives to Sept. 20 to allow more time for trial preparations, defense attorneys said.

The six defendants are accused of helping push through an alleged sham sale of electricity-producing Nigerian barges to the brokerage in 1999 to help the energy company appear to have met earnings targets.

Last month a special Enron grand jury in Houston handed up an expanded indictment against the six defendants, adding allegations that the deal led to $80 million in losses. The loss allegations, under federal sentencing guidelines, could mean longer prison sentences if the defendants are convicted.

Werlein ordered the delay in a conference call with prosecutors and defense attorneys.

In addition, Lawrence Zweifach, attorney for former Merrill Lynch executive James A. Brown, said Werlein ruled that the trial would be held in two parts — a liability phase and, if convictions are won, a sentencing phase — much like criminal trials in Texas state courts. If a second phase is warranted, the same jury that decided the first phase would act as an advisory jury to the judge for sentencing purposes and hear evidence related to increasing potential prison time, Zweifach said.

The Department of Justice began adding information about possible sentence enhancements to federal indictments in light of a June 24 U.S. Supreme Court decision forbidding a state judge from adding time to a Washington state convict’s sentence.

The so-called barge case in Werlein’s court has been postponed before. On the day of jury selection in June, Werlein rescheduled the case for Aug. 18 after attorneys reiterated concerns that the trial would likely exceed its strict five-week schedule.

Besides Brown, 51, former head of Merrill’s asset lease and finance group, the other defendants are: Dan Boyle, 47, a former Enron finance executive; Sheila Kahanek, 38, a former in-house Enron accountant; Daniel Bayly, 56, formerly Merrill Lynch’s chairman of investment banking; Robert S. Furst, 43, the former Enron relationship manager for Merrill; and William Fuhs, 35, former vice president who answered to Brown. (AP)

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