Enron Broadband Executives Go on Trial in Alleged Fraud

The trial of five former executives from Enron Corp.’s failed broadband venture is about “lying for profit,” a federal prosecutor told jurors Tuesday.

“The evidence will show that these men knew what we all learned later on -- that Enron was a fraud,” Assistant U.S. Atty. Lisa Monaco said.

Testimony is expected to begin today in Houston.

Per Ramfjord, a lawyer for Joseph Hirko, former chief executive of the broadband unit, countered that Hirko believed his statements about the broadband network’s so-called revolutionary capabilities were true.

Hirko and two other defendants are accused of making false claims about Enron’s broadband network’s capabilities to boost the company’s share price. He and former vice presidents F. Scott Yeager and Rex Shelby are charged with conspiracy, fraud, insider trading and money laundering.

Defense lawyers said their clients sold stock to diversify their holdings and, in some cases, were holding thousands of shares that became worthless when Enron cratered in December 2001.

“If you’re going to convict the three guys because they made money -- because that’s what the government wants you to do -- then we may as well stop right now,” said Ed Tomko, Shelby’s attorney, noting that the stock sales were not crimes.

Kevin Howard and Michael Krautz, finance and accounting executives at the unit, are charged with conspiracy and fraud for allegedly faking earnings in 2000 and 2001 from a failed deal with Blockbuster Inc.