Washington (Aug. 3, 2004) — Kenneth Rice, the former head of Enron Corp.'s high-speed Internet unit, pleaded guilty to securities fraud and has agreed to cooperate with federal prosecutors in cases related to the collapse of the energy trading conglomerate.
Rice, 45, was charged in May 2003 with selling 1.2 million shares of Enron stock for more than $76 million while he knew Enron Broadband Services was failing. More than 40 counts were lodged against Rice including fraud, conspiracy and participating in a scheme to pump Enron’s broadband networks as having capabilities they did not have.
The Department of Justice said the unit was never profitable and was abandoned shortly after Enron's bankruptcy filing in December 2001.
Rice faces a maximum of 10 years in prison and a fine of up to $1 million. His sentencing was set for Jan. 31.
The plea agreement with federal prosecutors also requires Rice to forfeit $13.7 million in cash and property.
— WebCPA staff
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