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HindustanTimes Wed,27 Aug 2014

Ex-Enron chief executive to serve 27-month prison term

DPA  Washington, June 19, 2007
First Published: 12:14 IST(19/6/2007) | Last Updated: 13:02 IST(19/6/2007)

An Enron Corp unit's former chief executive has been sentenced to 27 months in prison for securities fraud linked to the energy-trading giant's 2001 bankruptcy, which exposed one of the biggest US corporate scandals.

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A federal judge in Houston on Monday also ordered Kenneth Rice to forfeit about $15 million to help compensate victims of the Enron collapse, the US Justice Department said.

Rice, former head of Enron Broadband Services (EBS), cooperated with the US government's investigation into Enron. He pleaded guilty to the fraud charge on July 20, 2004.

Rice admitted that he and others made falsely optimistic public statements about the company's fibre-optic technology and failed to disclose a likely operating loss in 2001, sharply boosting Enron's stock price, the justice department said.

Enron's December 2001 collapse erased some $70 billion in market value, cost at least 5,000 jobs and wiped out employee pensions.

Former Enron chief executive Jeffrey Skilling was sentenced in October to more than 24 years in prison for his role in accounting fraud that brought down the company.

Former chairman and CEO Kenneth Lay died in July 2006 at age 64, a few weeks after being convicted in the case. The conviction was dismissed after his death.

US prosecutors have brought criminal charges against 36 defendants in Enron's collapse, including 25 former Enron employees. Eighteen have pleaded guilty or were found guilty after trial.

A former pipeline company, Enron grew under Skilling's leadership into an energy-trading giant.

Lay and Skilling denied wrongdoing and blamed the scandal on former chief financial officer Andrew Fastow, who was sentenced to six years in prison last September after a plea bargain with prosecutors.

A federal judge in Houston on Monday also ordered Kenneth Rice to forfeit about $15 million to help compensate victims of the Enron collapse, the US Justice Department said.


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