TELECOM Digest OnLine - Sorted: Judge Allows Enron Broadband Trial to Continue

Judge Allows Enron Broadband Trial to Continue

Lisa Minter (
Wed, 1 Jun 2005 14:20:35 -0500

A federal judge on Wednesday allowed a majority of the case to
continue against five former Enron Corp. Internet executives, ruling
that prosecutors have done enough to prove their case at trial.

U.S. District Judge Vanessa Gilmore dropped one wire fraud charge
against two former Enron Broadband Services (EBS) finance executives,
Kevin Howard and Michael Krautz.

She also considered dropping two money laundering charges against two
other defendants.

"I will certainly take a look at that some more and figure out if
there is any basis in granting those (dismissals) at some later point
in time," Gilmore said outside of the jury's presence Wednesday

The rest of the government's case -- including the underlying
conspiracy charge -- remained intact as the defense began calling
witnesses on Wednesday. The trial had been estimated to end by late
June but could drag into July.

All five are charged with fraud in addition to conspiracy. Former EBS
co-Chief Executive Joe Hirko and ex-technology executives Rex Shelby
and Scott Yeager also face money laundering and insider trading

The government has said Enron lied to analysts at a meeting in January
2000 by falsely claiming the company's software could control
broadband Internet traffic on its network.

The defense has contended the executives had high hopes for the unit
and honestly believed it would become the next big thing for the
Internet, although ultimately it lost hundreds of millions of dollars
before collapsing in the summer of 2001.

Enron Corp. declared bankruptcy in December 2001 as a crushing wave of
accounting scandals decimated the Houston company.

Former Enron Chief Executive Jeffrey Skilling is scheduled to face
criminal trial in January 2006 alongside former Enron Chairman Kenneth
Lay and former Chief Accounting Officer Richard Causey.

Copyright 2005 Reuters Limited.

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