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Ex-Merrill banker loses appeal in Enron barge case

By Jonathan Stempel

NEW YORK (Reuters) - A former Merrill Lynch & Co banker lost an appeal on Friday of his conviction on perjury and obstruction charges over his role in an Enron Corp fraud that involved the sham sale of Nigerian power plant barges.

James Brown, the former banker, alleged the government violated his right to due process by withholding evidence that could have exonerated him.

But a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans said the evidence at best might have marginally helped Brown and would not likely have changed the result.

Sidney Powell, a lawyer for Brown, said she plans to appeal Friday's decision to the entire 5th Circuit.

"Brown is innocent and the government hid evidence that proved that he was innocent," she said.

A jury had convicted Brown and other Merrill bankers in 2004 of helping Enron in 1999 engineer a sham sale of the barges to help the energy trader meet analysts' fourth-quarter earnings forecasts.

Prosecutors said Enron disguised a $7 million loan as sale proceeds, while secretly promising it would within six months buy back the barges, located off Nigeria's coast.

Brown served one year in prison before being released. The 5th Circuit previously overturned his conviction on fraud and conspiracy charges.

In his appeal of the obstruction and perjury counts, Brown said the government should have produced evidence, including FBI notes from an interview with former Chief Financial Officer Andrew Fastow, and Senate investigators' notes from an interview with former Treasurer Jeffrey McMahon.

But the 5th Circuit said some of the evidence in fact helped the government's case, while other evidence would have had little impact.

"The favorable evidence that Brown points to is not, even cumulatively, sufficient to give us a definite and firm conviction that it establishes a substantial probability of a different outcome," Circuit Judge Jerry Smith wrote for the court. "There was considerable evidence of Brown's guilt."

Enron filed for bankruptcy on December 2, 2001.

The case is U.S. v. Brown, 5th U.S. Circuit Court of Appeals, No. 10-20621.

(Reporting by Jonathan Stempel; editing by Andre Grenon)

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