The feds snagged two former Enron execs for fake broadband scheme:
- The U.S. Justice Department accused Kevin Howard, the former chief financial officer of Enron Broadband Services Inc., and Michael Krautz, the unit’s former senior director of accounting, of fraudulently helping Enron record earnings in 2000 and 2001 from a deal with Blockbuster Inc. to provide video-on-demand.
The two men worked at the company until this week, although an Enron spokeswoman declined to say in what capacity. Howard and Krautz were charged with securities and wire fraud, conspiracy and making false statements to federal authorities, for which they face up to 25 years in prison if convicted.
“It’s basically an accounting fraud scheme that produced earnings of over $110 million,” Enron task force prosecutor John Kroger said.
The criminal complaint says the two executives spoke to investigators on the condition their statements could not be used against them. But prosecutors said the deal was broken when the men allegedly lied to them.
The Securities and Exchange Commission also filed civil charges against the two men, seeking disgorgement of ill-gotten gains and to bar them from holding office at a publicly traded company. [Reuters]
“Disgorgement of ill-gotten gains” – I like that term: “cough it up scum.”