BBC News
The first criminal trial involving former Enron staff is "a case about cheating and lying", prosecutors say. Two Enron employees and four Merrill Lynch executives face charges relating to a transaction in Nigeria in 1999.
The energy firm is accused of selling electricity-producing barges to Merrill to pad its books, while promising to buy them back in 2000. Prosecutors said on Monday that the deal demonstrated the practices which pushed Enron into bankruptcy in 2001.
Lawyers for the defendants said the sale was real - and that in any case their clients were too junior to have played a significant part.
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Dan Boyle, Enron's former finance director, is charged with lying about the Nigeria transaction, as well as conspiracy and wire fraud.
Also on trial are former Enron accountant Sheila Kahanek and former Merrill Lynch bankers Daniel Bayly, Robert Furst, William Fuhs and James Brown. In an opening statement, assistant US attorney John Hemann said the government would show Enron had been desperate to sell off the barges - lying off the Nigerian coast - in order to book a profit on the deal. The company pressured Merrill into paying $7m for a stake, he said, using the huge fees it paid the bank to persuade it to depart from its usual practices. "What Merrill got was the promise of millions and millions and millions of dollars in investment banking business," Mr Hemann told the court. It also, he said, got a promise that Enron would buy the barges back with a guaranteed 22% annual profit if it could not find a buyer within six months. The buyback was run through an off-balance-sheet subsidiary controlled by Enron chief financial officer Andrew Fastow, who has already pleaded guilty to fraud and is helping prosecutors with their inquiries.
http://news.bbc.co.uk/1/hi/business/3679252.stm
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