Enron broadband exec gets 2 years on probation
HOUSTON (AP) – The eight-year long criminal prosecution related to failed Enron Corp.'s broadband unit came to a close Monday with the final sentencing in the case.
Former Enron executive Rex Shelby was sentenced to two years of probation by a federal judge on a charge of insider trading.
As part of his sentence, Shelby will have to serve three months in a halfway house and three months in home confinement. He was expected to report to a halfway house in Houston in about a week.
Shelby had been facing up to 10 years in prison.
"I take full responsibility for my actions, all my decisions at Enron," Shelby told U.S. District Judge Vanessa Gilmore before she sentenced him.
As part of a plea agreement with prosecutors, Shelby is forfeiting almost $2.6 million. Gilmore also sentenced him to 230 hours of community service.
Shelby was one of seven former executives first indicted in 2003, all accused of scheming to exaggerate the capabilities of Enron's broadband network in order to impress analysts and inflate company stock. Although Enron was primarily an energy trader, the broadband unit was created in 1998 as another growth engine during the dot-com boom.
About a day after Shelby and other Enron executives touted the broadband network to Wall Street analysts at a January 2000 conference in Houston, company shares jumped from $54 to $72.
Authorities said the broadband network never made a profit or surpassed testing stages.
Enron, once the nation's seventh-largest company, filed for bankruptcy protection in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable.
The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.
Edwin Tomko, one of Shelby's attorneys, had asked Gilmore not to sentence his client to a halfway house because it would limit his ability to work. In January, Shelby was hired by a small Houston company that develops architectural design software. It's the first job he's had since being indicted, Tomko said.
Prosecutor Jonathan Lopez said he did not object to part of Shelby's sentence being served at a halfway house. Prosecutors had asked for a sentence of six to 12 months, to be served by a combination of confinement at a facility like a halfway house and home confinement.
After the sentencing, Tomko said he believed Shelby's employer would be accommodating.
Several trials as well as appeals in the case, including one which made it to the U.S. Supreme Court, have delayed the broadband case over the years.
Of the six others who were also indicted in the case, three received prison sentences ranging from 16 months to 27 months, one was given one year's probation as well as home confinement, one was acquitted at trial and one had charges dismissed.