Ex-CEO of Enron Broadband Services jailed for fraud
A former chief executive officer of Enron Broadband Services, the failed telecom business of the collapsed Enron, was on Monday ordered jailed for 16 months after he pleaded guilty to fraud.
Joseph Hirko, 53, was also ordered by a US District Court in Houston to forfeit about seven million dollars in restitution to fraud victims in accordance with the terms of a plea agreement, the Justice Department said.
Hirko, of Portland, Oregon, had pleaded guilty in October last year to one count of wire fraud, after an earlier “mistrial” in which he and four others were charged with securities and wire fraud, insider trading and money laundering, the department said.
Under US law, wire fraud is any criminally fraudulent activity that has been determined to have involved electronic communications of any kind.
Enron Broadband Services or EBS was set up in the 1990s by former energy giant Enron, which went bankrupt in 2001, to create a market for high speed data services.
Hirko falsely promoted the broadband division to analysts through press releases and “assisted in maintaining Enron’s overall stock price, thereby improperly maintaining the value of” his own holdings of the stock, the Justice Department said.
“Hirko admitted that he acted with reckless indifference to the true facts,” it said.