Houston, Sept 17: Three former Merrill Lynch & Co. executives are expected to be named in an indictment to be unsealed today on charges they helped Enron Corp. artificially inflate its earnings with a loan that was wrongly booked as a sale, people familiar with the case said. Daniel Bayly, Robert Furst and a third, unidentified former executive were slated to surrender to the FBI today and then appear in federal court in Houston, according to sources.

The three are charged with fraud in a scheme in which Enron, with Merrill's knowledge, wrongly booked a short-term investment from the brokerage firm as profit from the sale of Nigerian barges. The income was then used to make Enron appear to have met earnings targets.
Bayly and Furst, are among four facing similar allegations in a civil complaint filed in March by the Securities and Exchange Commission. The third defendant is not charged by the sec, which also named Merrill Lynch.
Bayly, former global head and chairman of investment banking, retired from Merrill last year. Furst, former managing director in investment banking, quit in 2001. Their lawyers either declined comment or didn't return calls for comment.
The criminal charges do not involve Merrill Lynch, which settled the SEC civil complaint for USD80 million in March.
Bureau Report