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contribution to LJM1. In return, LJM1 distributed approximately 1,775,000 shares of Enron stock(worth approximately $137 million on an unrestricted basis) into separate escrow accounts for thebenefit of each limited partner. See Exam. IV, App. E at 53-55.645. When RBS obtained access to the Enron shares through the escrow, it quickly movedto capture the Enron share value that exceeded RBS’s capital contribution to LJM1. RBS executeda total return swap with AIG that enabled RBS to book approximately $67 million in income,allowing RBS to recognize a profit in excess of $22 million. See Exam. IV, App. E at 53-55.Fastow, meanwhile, benefited as the LJM1 general partner from the additional capital contributionsto LJM1. An RBS document succinctly summarized the transaction’s goals: “[RBS] wished to lockin and realize its profit from the [LJM1] deal straight away and [Fastow] wished for more cash inLJM for him to invest and generate profit from.” RBS 4003282 (quoted in Exam. IV, App. E at 55).One RBS executive boasted about what RBS had accomplished:So what [we] have achieved over the last couple of months is to strip out 94%of the value remaining in the vehicle after Fastow put his grubby little fingers in thetill, and convert it to P & L. For emphasis, what we have executed was not Enron’sidea, or Fastow’s idea, or CSFB’s idea, it was OUR idea.RBS 4015211 (quoted in Exam. IV, App. E at 55 n.209).646. In restructuring LJM1 and executing the total return swap, RBS knowinglyparticipated in a fraud on Enron. As RBS knew, Fastow had represented to the Enron Board thathe would have no economic interest in Enron stock transferred to LJM1. See Exam. IV, App. E at34-35. (In addition, the Amended Partnership Agreement for LJM1 prohibited Fastow from sharingin distributions of proceeds resulting from the Enron stock transferred to LJM1. See Exam. IV, App.E at 45.) However, the restructuring of LJM1 enabled Fastow to do exactly what he had promisedthe Enron Board he would not do: profit from the value of the Enron stock in LJM1. The escrowaccounts for the benefit of the limited partners gave RBS control over Enron stock that had formerly604041v1/007457-222-