Joseph Hirko, 52, of Portland, Oregon, the former CEO of Enron Broadband Services, pleaded guilty last week to one count of wire fraud in order to avoid a second trial. In his guilty plea, Hirko admitted to allowing press releases to be issued in 2000 that said the company's technology, broadband operating system, would allow customers to pay for only the bandwidth they use. Unfortunately for Hirko, the technology was still under development and not yet available, thereby deceiving shareholders and customers alike. Hirko's and four other company executives' trial ended in September 2005 with hung juries on most counts. Hirko was acquitted in the 2005 trial on 14 of the 27 charges against him, two of them for insider trading and 12 for money laundering. He was charged in a new indictment with wire fraud, securities fraud and insider trading. This plea set all of that aside. Other executives charged in this case include Rex Shelby, Scott Yeager, Kevin Hannon and Kenneth Rice. He is scheduled for sentencing on March 3, 2009 and faces up to 16 months in prison. The plea also requires him to forfeit some $8.7 million in compensation.
Monday, December 1, 2008
Former Enron Broadband Exec Pleads Guilty
Joseph Hirko, 52, of Portland, Oregon, the former CEO of Enron Broadband Services, pleaded guilty last week to one count of wire fraud in order to avoid a second trial. In his guilty plea, Hirko admitted to allowing press releases to be issued in 2000 that said the company's technology, broadband operating system, would allow customers to pay for only the bandwidth they use. Unfortunately for Hirko, the technology was still under development and not yet available, thereby deceiving shareholders and customers alike. Hirko's and four other company executives' trial ended in September 2005 with hung juries on most counts. Hirko was acquitted in the 2005 trial on 14 of the 27 charges against him, two of them for insider trading and 12 for money laundering. He was charged in a new indictment with wire fraud, securities fraud and insider trading. This plea set all of that aside. Other executives charged in this case include Rex Shelby, Scott Yeager, Kevin Hannon and Kenneth Rice. He is scheduled for sentencing on March 3, 2009 and faces up to 16 months in prison. The plea also requires him to forfeit some $8.7 million in compensation.
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