In the first of many sentencing hearings that will take place this fall n connection with various Enron-related criminal cases, Timothy DeSpain, a 41-year old former assistant treasurer of Enron from 1999 to 2002, was sentenced this morning by U.S. District Judge Ewing Werlein to four years probation in connection with a 2004 plea agreement in which he pled guilty to a single count of securities fraud. Here is an earlier blog post with background on DeSpain’s role at Enron and his plea deal. The Chronicle’s Tom Fowler files a report on the sentencing here.

In a move that may backfire, the Enron Task Force filed this petition requesting that the entire Fifth Circuit Court of Appeals consider and reject the decision of a Fifth Circuit three-judge panel from last month (previous posts here and here) that struck down the wire fraud and conspiracy convictions of four Merrill Lynch executives involved in the controversial Enron-related Nigerian Barge case. The Chronicle’s Kristen Hays reports on the Task Force’s motion here and this post from a year ago provides an extensive thread of posts discussing the case.
The Task Force’s petition — which is focused on the “honest services” issue in the appeal — is somewhat odd, which may reflect the Task Force’s reservations about filing it at all given the considerable risk that a majority of the Fifth Circuit could adopt Judge Harold DeMoss’ dissent in the panel decision. On a threshold basis, the motion does not even mention that the Fifth Circuit panel’s decision reversed and rendered the convictions of Merrill Lynch executive William Fuhs on all counts and then makes the ludicrous suggestion in a footnote that former Enron CEO Jeff Skilling’s anticipated appeal of his conviction and former Enron executive Chris Calger’s recent motion to withdraw his plea agreement are somehow valid reasons for reconsidering the panel’s decision (“we can’t allow those evil former Enron executives be protected by the law!”). Beyond that, the Task Force’s short pleading mischaracterizes the panel’s decision and fails to address the Task Force’s seminal problem with the entire Nigerian Barge prosecution — that the Task Force prosecuted the Merrill Lynch executives for doing their jobs in connection with Enron’s sale of an asset to Merrill for which Enron, not Merrill, may have improperly accounted, although even that issue was never proven by the Task Force during the trial.
Meanwhile, in another interesting development, two of the former Merrill executives involved in the Nigerian Barge appeal, Dan Bayly and Robert Furst, who face the possibility of a retrial as a result of the Fifth Circuit panel’s decision — filed this motion for rehearing in which they request the Fifth Circuit panel to address a key evidentiary issue — the trial court’s decision to allow the Task Force to introduce an email of Brown that was prepared over a year after the barge transaction took place — that the panel did not address in its original decision because of its reversal of the convictions on other grounds. Bayly and Furst argue in the motion that the panel’s ruling on that evidentiary issue will resolve the issue in any re-trial of the case and should be known to the entire Fifth Circuit before it decides whether to grant en banc review of the panel’s decision (if Bayly and Furst are right that the trial court erred in admitting the Brown email, then even an en banc reversal of the panel’s decision on the honest services issue would not alter the reversal of the convictions).