JURIST - Paper Chase: Former Enron executive pleads guilty to falsifying records

[JURIST] Former Enron [JURIST news archive] executive Kevin Howard [DOJ materials] pleaded guilty [plea agreement, PDF] Monday to falsifying books and records in relation to Enron's broadband service. The plea resulted from accusations [complaint text] that Howard indirectly caused the false recording of revenue earnings for Enron by failing to disclose material facts to outside accountant Arthur Andersen and Oregon video-on-demand company nCube. Prosecutors alleged that this conduct resulted in manufactured earnings for the failed broadband division. The deal, called "Project Braveheart," was designed to monetize a portion of future earnings and cash flow from an agreement with Blockbuster. Specifically, Howard's guilty plea is in regards to:

his participation in the "Braveheart" transaction, which closed on December 22, 2000, knowingly and willfully directly or indirectly caused Enron's Form 10K for the year-ending 2000 to be falsified, in that the 10K did not accurately and fairly reflect, in reasonable detail, the transactions and dispositions of the assets of Enron, in violation of [federal securities law].

Although the violation usually carries a sentence of up to ten years imprisonment and a fine, the plea agrees to a sentence between four and 12 months of "home confinement, probation, or some combination thereof."

In March, a district court judge issued an order [JURIST report] setting a July 30 date for the resentencing of former Enron Chief Executive Officer Jeffrey Skilling [JURIST news archive] and setting up a system for victims to share their accounts with the court. Last year, the US Court of Appeals for the Fifth Circuit [official website] upheld [opinion, PDF] a district court ruling to vacate the conviction of Howard based on an earlier Fifth Circuit opinion that overturned separate Enron convictions on the ground that the government's honest services fraud theory was flawed.

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