The former chief of Enron Corp.'s once-touted broadband unit and one of the defunct company's top traders was sentenced Monday to 27 months in federal prison. Kenneth Rice, the last of 15 ex-Enron executives who pleaded guilty to various crimes, also was ordered to pay a $50,000 fine and forfeit $13 million in cash and property to the government.
Rice was one of nine former Enron chiefs who had faced a prison sentence; he could have received up to 10 years after pleading guilty to securities fraud in 2004 (see Daily GPI, Aug. 2, 2004). Six other former executives were given probation.
As part of his guilty plea, Rice agreed to forfeit some of his cash, real estate and possessions that he acquired while he was working at Enron. Included in the government's take is more than $379,000 in cash, a Colorado vacation home, a Ferrari and other assorted vehicles, and a platinum, diamond and sapphire necklace and bracelet that Rice bought for his now ex-wife.
U.S. District Judge Vanessa Gilmore imposed the sentence. Rice told her before the sentencing that he was "ashamed" of his behavior at Enron. "What got me here is I lied over about a two-year period on a number of occasions to the investing public."
Rice was one of seven former Enron Broadband Services (EBS) executives who were indicted in 2003 (see Daily GPI, May 2, 2003). At one time he faced 42 criminal counts. Among other things, he was accused of lying to financial analysts and investors in 2000 and 2001 by telling them that the EBS bandwidth and broadband networks were running while actually they were still being tested. EBS never made a profit.
Rice left Enron several months before the company went bankrupt, and in the process he sold about 1.2 million shares of Enron stock for more than $76 million. Rice was CEO of Enron's trading unit, then called Enron Capital and Trade, from June 1996 to June 1999. He then was promoted to lead EBS.
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