Washington, Oct 16: US prosecutors have charged a former Enron Corp. accountant and another Merrill Lynch banker with fraud in connection with one of the schemes the bankrupt energy trader used to cook the books, the Justice Department said today. Former Enron accountant Sheila Kahanek and former Merrill Lynch vice president William Fuhs are accused of colluding with three other Merrill Lynch bankers and Enron's former chief financial officer Andrew Fastow on the Nigerian barge scheme, officials said.
The charges stem from a dummy transaction in which Enron parked two Nigerian power-plant barges on the bank's books and reported 12 million dollars in bogus earnings and 28 million in funds flow in the last quarter of 1999. The earnings were bogus because Enron executives secretly promised the Wall Street Bank that it would buy back the barges with interest in a secret "handshake" deal.
Kahanek even reprimanded an Enron colleague for writing up the terms of that oral deal, ordering the employee to destroy all evidence of the agreement in early 2001, the Justice Department said. The superseding indictment, returned by a grand jury Tuesday, and unsealed Wednesday, charges Kahanek of conspiracy to commit wire fraud and falsify Enron's books and records. Bureau Report