Long prison terms are unlikely for Enron trio

Former Merrill Lynch bankers Robert Furst and William Fuhs and former Enron executive Dan Boyle are set to be sentenced in separate hearings by U.S. District Judge Ewing Werlein.

The trio were convicted by a jury in November of helping Enron defraud its shareholders by pumping up the bottom line with false profits from a "sale" of three energy-generating Nigerian barges to the bank.

Court papers indicate that probation officials, based on their read of sentencing guidelines and their apparent assumption of multimillions of dollars in losses, are suggesting about seven years in prison for Fuhs, 15 years in prison for Furst and up to life in prison for Boyle, who was also found guilty of making false statements.

But some of the suspense is already over for these men as two of their co-defendants, former Merrill bankers Daniel Bayly and James A. Brown, were sentenced last month to between 2{ and nearly four years in prison. Key to those rulings was Werlein's finding that the loss in the case was only about $1.4 million, figured by looking at the gains from the crooked deal.

Bayly's and Brown's attorneys argued there actually was no loss, while the government argued it was $43.8 million, a finding that could have resulted in sentences of 14 to 32 years in prison for those two men.

Defense attorneys watching the case were heartened that the judge did not impose higher punishments, especially after former Dynegy executive Jamie Olis was sentenced in Houston to 24 years in prison, largely because guidelines used at the time demanded high terms if a lot of money was lost in a crime.

"I would anticipate that the three remaining defendants will receive sentences in conformity with the sentenced defendants. They all appear to be similarly situated and have similar levels of culpability and relevant conduct," said Houston lawyer Philip Hilder, who represents several Enron witnesses.

"The judge will be consistent in his calculation of the loss which controls the exposure of prison time for the defendants," he said. The judge will keep the sentences "in proportion to the crime unlike that in the Olis situation," Hilder said.

Since Olis, the U.S. Supreme Court made federal sentencing guidelines nonmandatory for judges. In the barge case, Werlein employed his discretion, but still worked within the guidelines' framework.

He called the fraud involved - a sham sale of barges to increase Enron's bottom line - a relatively "small and benign" fraud within the Enron "constellation."

Werlein said white-collar criminals who've been successful in their careers face a great deal of punishment just in their humiliation and that they can't tolerate prison terms the way other defendants can.

The high court ruling also lets a judge put greater consideration on the background of the defendants and their lives before the crimes.

Fuhs and Boyle asked the judge for leniency, chronicled their lives for him and detailed how much these charges have hurt their families. They presented letters from friends, family and co- workers attesting to their fine characters. Boyle, who mentions his wife's illness and that they adopted children, even gave the judge a CD with his statement and others speaking about him.

Boyle's endorsements include one from a couple who were Enron shareholders. They said they suffered some financial loss, but that they've known Boyle for more than 12 years and "do not believe his actions contributed in any way to the demise of Enron." They said they would still trust Boyle with their finances.

Fuhs wrote a personal letter to the judge, saying: "The indictment of having purposefully done something to the detriment of others was like a knife through my heart, and every step that has followed that first day on October 2003 has been an additional wound."

They argue they shouldn't have to pay restitution because the scheme caused no loss and had no victims. This is similar to what Bayly and Brown argued.

Defendant Furst has sealed his papers, and Werlein has not responded to Houston Chronicle requests to unseal several documents in this case.

Enron Task Force prosecutors said in a filling that all three men failed to show remorse. "They are utterly unrepentant for their crimes. They accept no responsibility for their actions," prosecutors wrote.

Werlein previously sentenced Brown, who was convicted of lying and obstructing justice along with conspiracy and fraud in the barge deal, to three years and 10 months in prison and ordered him to pay $840,000 in fines. The judge sentenced Bayly to two years and six months in prison and fines of $840,000.