The first Enron trial was an 83% success for the prosecution.
A former Enron finance executive and four ex-Merrill Lynch bankers were found guilty of conspiracy and fraud Wednesday while a co-defendant, an ex-Enron accountant, walked onto the sunlit sidewalk in front of the federal courthouse a free woman.
The jury in the first Enron criminal trial acquitted a grateful Sheila Kahanek while convicting the five others in a 1999 deal in which Enron padded its earnings by pretending to sell an interest in Nigerian barges to Merrill Lynch.
Though 14 former Enron employees have pleaded guilty to various crimes, this verdict marks the first jury finding against an ex-Enron executive and four ex-Wall Street bankers for aiding and abetting the Enron scheme.
The case was a test of Enron Task Force prosecutors’ accusations of earnings manipulations, alleged repeatedly in the bigger upcoming case against ex-Enron Chairman Ken Lay and ex-CEO Jeff Skilling. Prosecutors were also very pleased that jurors found two defendants guilty for lying to or obstructing authorities.
But the government was not invincible, and legal experts think the case has many lessons for the 11 people awaiting trial on Enron-related criminal charges.
“This may be a shot across the bow for the government in its upcoming multiple-defendant cases. Juries like to let somebody go; they understand how important these charges are, and they feel better when they find someone to let go,” said Houston lawyer David Berg.
Tom Kirkendall gives a wrapup and a preview of what to expect during the sentencing phase.
The woman is acquitted and all the men are convicted.
Nothing new here.