Three former Merrill Lynch bankers surrendered to the FBI today to face charges stemming from a deal with Enron allowing the energy giant to record a bogus $12 million profit.
The three - Mr Robert Furst, Mr Daniel Bayly and Mr James Brown - were involved in a transaction that helped Enron meet its fourth-quarter 1999 profit target through a sham sale of three electricity-producing barges moored off the coast of Nigeria.
The three executives, accompanied by their lawyers, surrendered at the Houston office of the FBI and were taken by car to federal court.
Prosecutors have alleged in other Enron criminal indictments that the barge deal was designed to look like a sale. In fact, Merrill was only loaning money to Enron and holding the barges on the condition it would be paid back with interest within six months.
Merrill Lynch, which has said it acted properly in the barge deal, is not charged in the criminal complaint. It paid $80 million in March to settle a US Securities and Exchange Commission civil complaint alleging stock fraud in the barge deal and in another transaction with Enron.
Mr Bayly, Mr Furst and two other former Merrill bankers, Mr Schuyler Tilney and Mr Thomas Davis, were named in the SEC complaint and are contesting those civil charges. Neither Mr Davis nor Mr Tilney has been charged criminally.