Risk & Compliance

Split Verdict in Enron Broadband Retrial

Two former finance executives faced the jury on Wednesday; one was acquitted.
Stephen TaubMay 31, 2006

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An Enron trial that had been flying under the radar emerged today with guilty verdicts for one defendant, acquittal for the other.

Kevin Howard, former vice president of finance for Enron Broadband Services, was convicted of five counts of fraud, conspiracy, and falsifying records. He faces up to 25 years in prison, according to the Associated Press. Former senior director of transactional accounting Michael Krautz was found not guilty of those same charges.

Last week, former top Enron executives Kenneth Lay and Jeffrey Skilling were found guilty of multiple counts of securities fraud, conspiracy, and other charges for their roles in the energy company’s accounting scandal and collapse. Their sentencing is scheduled for September.

Thursday’s decisions were handed up about nine months after the first trial of Howard, Krautz, and three co-defendants ended in a hung jury last July. The five individuals were accused of inflating the value of the broadband division, either by lying about the company’s technological prowess or by faking a sale to boost earnings and inflate Enron’s share price, according to a Houston Chronicle article at the time.

In September, two of the remaining three defendants — former Enron Broadband Services chief executive officer Joe Hirko and former senior vice president of engineering operations Rex Shelby — will be retried on conspiracy and fraud charges. The retrial of former senior vice president of strategic development F. Scott Yeager has been postponed indefinitely pending an appeal to drop the case, reported the AP.