Enron figures appeal charges - Ex-broadband executives
take it to the next level
Three former Enron broadband unit executives who
emerged from a trial last year with some acquittals
and jurors hung on other charges are appealing to
have all or most of the remaining counts against
them thrown out.
Lawyers for former unit CEO Joe Hirko, software
executive Rex Shelby and strategist Scott Yeager
filed challenges with the 5th U.S. Circuit Court
of Appeals this week.
All three face retrials on fewer charges that have
been postponed indefinitely pending results of their
appeals.
U.S. District Judge Vanessa Gilmore has already
denied their requests to toss out all or most remaining
charges.
The government has yet to respond to the appeals.
The first broadband trial lasted three months and
was dominated by tedious testimony laden with technology
jargon.
The government contended that Hirko, Shelby and
Yeager overstated capabilities of the unit's fledgling
broadband network so Wall Street would tout Enron
stock and they could pocket millions of dollars
from sales of shares inflated by the hype. The defendants
countered that the technology worked and they didn't
conspire to lie for profit.
All three faced charges of conspiracy, securities
fraud, wire fraud, insider trading and money laundering.
Yeager alone faced more than 100 counts, most of
those money laundering.
After about 24 hours of deliberations, jurors acquitted
each of some counts and gave up on the rest, convicting
no one. Yeager was acquitted of conspiracy and fraud.
Hirko and Shelby were acquitted of some insider
trading and money laundering counts, and Shelby
also was acquitted of a fraud count.
Yeager now faces a retrial for insider trading
and money laundering while Hirko and Shelby face
conspiracy, fraud and insider trading charges.
At issue in the appeals is whether they can be
retried on charges so closely aligned with those
of which they were acquitted that a second round
amounts to double jeopardy -- or being tried twice
for the same crimes.
Yeager argues that the entire case against him
should be dismissed, while Hirko and Shelby want
to erase most charges against them.
"It's a very difficult hill to climb for them,"
David Berg, a Houston civil litigator, said of the
appeals.
"For jeopardy to apply, there has to be a
final verdict so the thing itself has been decided.
In this case, a hung jury is like no jury at all,"
Berg said. "The law says that once facts are
decided by a jury or a judge, they can never be
tried again."
Hirko, Shelby and Yeager were originally indicted
in 2003 alongside four other defendants: Hirko's
co-CEO, Kenneth Rice; broadband unit chief operating
officer Kevin Hannon; unit finance chief Kevin Howard;
and former unit accountant Michael Krautz.
In 2004, Rice and Hannon pleaded guilty to securities
fraud and conspiracy, respectively. Both are to
be sentenced in January.
A fraction of the original trial focused on allegations
that Howard and Krautz used accounting tricks to
fake earnings for the broadband unit. Jurors were
hung on all counts against them.
Howard and Krautz were retried in May on charges
of fraud, conspiracy and falsifying books. Krautz
was acquitted, but Howard was convicted.
However, prosecutors have since asked Gilmore to
erase four of Howard's five convictions because
they could have been won by a flawed prosecution
strategy. Howard's lawyers say the fifth count is
tainted as well and should be erased.
