2 From Enron Are Indicted in Video Case

HOUSTON -- A federal grand jury indicted two former Enron executives on fraud charges Thursday, accusing them of creating $111 million in fake revenue from a short-lived video-on-demand business, Reuters reported.

In a 19-count indictment that mirrored criminal charges brought two weeks ago, the Justice Department said that Kevin Howard and Michael Krautz, the executives, fraudulently helped Enron record earnings in 2000 and 2001 from a deal with Blockbuster Inc. to provide video-on-demand.

The deal never made any money and was ultimately terminated on March 9, 2001.
Howard was the chief financial officer of Enron Broadband Services, and Krautz was the unit's senior director for accounting. The two were dismissed on March 12, the day the charges were made public and Krautz and Howard turned themselves in to the FBI.

The two are charged with securities fraud, conspiracy to commit securities fraud and wire fraud, mail fraud and making false statements to FBI agents. They face up to 25 years in prison and $1.75 million in maximum fines if convicted. They are both free on $500,000 bond each, and have indicated that they intend to fight the charges.

-- NYSSCPA.org News Staff

Posted on 03/27/03