HOUSTON (AP) — A federal grand jury on Wednesday handed up a 19-count indictment against two former mid-level Enron Corp. executives alleged to have used accounting tricks to generate $111 million in fake earnings from the bankrupt energy trader’s failed attempt to start an Internet movie-on-demand service.
The indictment mirrors criminal charges of securities fraud, wire fraud, conspiracy and lying to the FBI unsealed March 12 against Kevin Howard, 40, and Michael Krautz, 34. Both are free on $500,000 bond, and deny the charges. A pretrial hearing is set for July 1.
The charges stem from an attempt by Enron and the video chain Blockbuster Inc. to set up the video-on-demand business using broadband technology in a transaction dubbed “Braveheart.” At the time, Howard and Krautz worked for the now-defunct Enron Broadband Services unit. Prosecutors say Enron secretly promised profits from the deal to outside investors.