Houston Chronicle: Judge rejects request to return executive to jail
By KRISTEN HAYS
A judge rejected a prosecutor's push to throw a former Merrill Lynch & Co. executive back in prison for the entire term imposed for five Enron-related crimes even though three of those convictions have been overturned.U.S. District Judge Ewing Werlein on Monday denied a request from federal prosecutor Arnold Spencer to revoke James Brown's bond and order him imprisoned for his original three-year, 10-month term.Werlein imposed that punishment nearly two years ago after a jury convicted Brown of five crimes at the conclusion of a 2004 trial.Brown served a year of that term, but was released from prison in August 2006, days after the 5th U.S. Circuit Court of Appeals overturned three convictions of conspiracy and fraud against him and other former Merrill Lynch executives."This court is not persuaded that it can - or that the 5th Circuit intended for it to - override the order of release and remand Brown to prison to serve out the 46 months' bundled sentence originally imposed," Werlein said.Jurors convicted the defendants for their roles in helping push through a year-end sale of Enron assets to Merrill Lynch that prosecutors said was really a disguised loan.The defendants say the deal was legitimate.The 5th Circuit upheld Brown's convictions of perjury and obstruction of justice, but threw out the fraud and conspiracy convictions against him and his Merrill codefendants because prosecutors used a flawed theory to prove their guilt.However, the panel failed to say Brown should be resentenced for those affirmed counts.Under federal sentencing guidelines, the year he served would suffice.Brown's lawyers argued that Spencer exploited the omission and pushed for Brown to return to prison to pressure him into pleading guilty to another felony and possibly testify against his co-defendants.Werlein's ruling Monday said that the omission left him in "something of a quandary," because the 5th Circuit allowed Brown to be released from prison "pending further proceedings" without specifying what they were.However, Werlein noted that Alice Fisher, assistant attorney general for the Justice Department's criminal division, said in a filing shortly after the 5th Circuit issued its ruling that Brown should be resentenced.Brown's codefendants, Daniel Bayly and Robert Furst, are to be retried later this month.
Brown is to be retried separately at a later date.Werlein on Monday also rejected their requests to dismiss the cases.