The specially called Enron grand jury Wednesday indicted two former midlevel executives on charges of conspiracy and fraud in scheming to generate $111 million in false earnings through a failed Enron online movie service.
Kevin Howard, former chief financial officer of Enron Broadband Services, and Michael Krautz, former EBS senior accounting director, were both indicted on 15 counts of wire fraud, one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and one count each of making false statements to federal investigators.
The two men were arrested on these charges March 12.
The indictment issued Wednesday clearly shows the government thinks lies were told about EBS and appears to indicate more EBS-related charges could surface.
"However, many of the representations made about Enron's network and software at the Jan. 20, 2000, analyst conference were false, in that Enron did not possess the network software or capabilities that it claimed. Subsequently, EBS failed to generate any significant recurring revenue from its telecommmunications business," the indictment stated under a section headed "the scheme to defraud."
Belated apologies to mmw of bad things who correctly pointed out to me in a 3/12/03 email that Howard and Krautz are "not Ken Lay, but not exactly nobodies either" after one of my extended rants about Enron CEOs not being in captivity. He provided news of their arrest from that bastion of liberalism, Forbes.
