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Court upholds conviction of former Merrill Lynch executive in Enron-related case
HOUSTON (AP) ' A federal appeals court panel on Friday upheld a former Merrill Lynch executive's conviction on perjury and obstruction charges that stemmed from a bogus 1999 deal involving Enron.
A three-judge panel of the 5th U.S. Circuit Court of Appeals rejected James A. Brown's contention that federal prosecutors improperly withheld favorable evidence in his case.
Brown's attorney, Sidney Powell, said she would ask the full appeals court for a rehearing.
"We're not all done because this just isn't right," she said. "We remain convinced the government failed to meet its disclosure obligations."
The charges centered on Enron Corp.'s sham 1999 sale to Merrill Lynch of three power barges moored off the Nigerian coast. Brown was a managing director at Merrill Lynch and head of its strategic asset and lease finance group at the time.
In 2004, he and two other executives, Robert S. Furst and Daniel Bayly, were convicted of helping push through the deal to make the earnings of Enron's energy division appear larger. Bayly was Merrill Lynch's former head of investment banking and Furst was the company's Enron relationship manager.
Enron filed for bankruptcy protection in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable.
In his appeal, Brown argued prosecutors failed to provide to his lawyers before his trial FBI notes of an interview with Andrew Fastow, Enron's former chief financial officer, notes of congressional investigators' interview with Jeff McMahon, Enron's former treasurer, and transcripts of pretrial grand jury and Securities and Exchange Commission testimony from Katherine Zrike, chief counsel for Merrill Lynch's investment banking division.
In its ruling, the three judges said evidence submitted by Brown was not sufficient to convince them of a "substantial probability of a different outcome" of his trial.
"There was considerable evidence of Brown's guilt," the appeals judges said.
Brown was initially convicted of five counts and sentenced to four years in prison, but three of the counts ' conspiracy to commit wire fraud and two counts of wire fraud ' were overturned on appeal. Brown, who had served a year in prison when the counts were overturned, was freed on bond until they could be resolved.
Prosecutors decided last year to not retry Brown on the three counts. They dismissed charges against Bayly in January 2010 and agreed that May to dismiss charges against Furst after he first serve a year of probation.
Powell has said Brown has already served the maximum possible sentence for the perjury and obstruction counts.