The three-month trial last year of five former Enron Broadband Services (nicknamed “EBS”) executives on fraud and insider trading charges ended in a disastrous mix of acquittals and a mistrial for the Enron Task Force. So, this time around, U.S. District Judge Vanessa Gilmore has split the previous case into three seperate trials, and jury selection cranks up today in Houston federal court on another floor from the ongoing Lay-Skilling trial.
H’mm. I wonder whether any of those prospective jurors have heard about Enron over the past several months? ;^)
At any rate, in this first re-trial, Kevin Howard, the former EBS CFO, and Michael Krautz, the former EBS senior accounting director, will be tried together on four counts alleging that they conspired to commit wire fraud and falsify books and records in connection with a sale of video-on-demand profits. The Task Force contends that the sale was phony and was performed in order to inflate EBS earnings falsely. Howard and Krautz respond that the sale was an entirely legal and creative structured finance transaction that allowed EBS to generate earnings in an industry that was undergoing a huge shakeout amidst intense competition and fast-changing technology. The Sixth (yes, that’s sixth) Superseding Indictment against Howard and Krautz is here.
Well-known Houston criminal defense attorneys Jack Zimmerman and Jim Lavine represent Howard and Krautz is represented by Washington, D.C. lawyer Barry Pollack. The Task Force has assembled a new team to handle the re-trial of Howard and Krautz led by Assistant U.S. Attorneys Van S. Vincent of Nashville and Jonathan E. Lopez of Washington, D.C.
Initial estimates are that the re-trial will last about a month.