- The Washington Times - Tuesday, May 27, 2003

HOUSTON (AP) — Trial was set for April for seven former executives from Enron Corp.’s failed broadband unit charged with faking earnings and touting capabilities the unit didn’t have in order to inflate the company’s stock price.

U.S. District Judge Vanessa Gilmore said defense attorneys and prosecutors have until the end of June to figure out how all will have access to at least 40 million paper and electronic documents as they prepare for an April 5 trial, estimated to last at least two months.

Prosecutor John Kroger said more accusations could be unearthed “because the grand jury investigation is ongoing.” Daniel Cogdell, attorney for former Enron Broadband chief Kenneth Rice, also said defense attorneys and prosecutors had discussed “superseding” indictments that could add more charges or defendants.

Mr. Rice, Enron Broadband Chief Executive Joseph Hirko and five other former executives are defendants in a 218-count indictment accusing them of participating in schemes to make the unit appear successful when it never got off the ground. The broadband unit went bankrupt along with Enron Corp. in December, 2001.

All seven have pleaded not guilty and are free on bond.

Two of the executives, Kevin Howard and Michael Krautz, were indicted in March on charges of wire fraud, securities fraud, conspiracy and lying to the FBI. Prosecutors said they used accounting tricks to generate $111 million in fake earnings in late 2000 and early 2001 from Enron’s failed Internet movie-on-demand service with Blockbuster Inc.

Prosecutors said Mr. Hirko, Mr. Rice, former broadband Chief Operating Officer Kevin Hannon, and former Vice Presidents F. Scott Yeager and Rex Shelby knew the unit’s fiber-optic network couldn’t do what Enron told analysts it could do in January 2000 and 2001.

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