Enron Broadband Chief Jailed

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Former Enron broadband chief Kenneth Rice gets 27 months prison:

Kenneth Rice, who led a failed effort by scandal-plagued Enron in high-speed Internet, was sentenced Monday to 27 months in prison for his role in defrauding investors in the energy giant, authorities said. Rice, who had been chief executive of Enron Broadband Services (EBS), also was ordered to forfeit 15 million dollars to be used to compensate victims of the Enron fraud, the Justice Department said.

The excutive had pleaded guilty in July 20 to securities fraud charges, and cooperated with the government’s investigation into the collapse of Enron.

Rice admitted that he and others made a series of false statements about the prospects for broadband in a bid to artificially inflate the price of Enron stock.

He was the among several EBS executives charged in connection with wrongdoing at EBS, a failed effort to develop a fiber-optic network for the Internet that at one point promised to deliver movies on demand in a partnership with the Blockbuster video chain.

Rice had falsely claimed that network control software developed by EBS was “up and running” when in fact the software had not progressed beyond the internal development stage. authorities said.

This was among several fraud schemes perpetrated at Enron. The company’s former chief executive Jeffrey Skilling was sentenced in October to 24 years and four months in prison for his role in the fraudulent accounting scheme.

Enron’s spectacular collapse in 2001, then the largest corporate bankruptcy in history with more than 40 billion dollars in outstanding debt, rattled energy and stock markets. Thousands lost their jobs and savings.