Former Enron Broadband exec sentenced to prison term

The former co-CEO is sentenced to 16 months in prison on a wire fraud charge

Joseph Hirko, the former co-CEO of Enron Broadband Services, was sentenced Monday to 16 months in prison on a wire fraud charge related to false claims made by the failed telecommunications company, the U.S. Department of Justice said.

Enron Broadband Services (EBS) was a division of Houston energy company Enron, which went bankrupt in late 2001.

Judge Vanessa Gilmore of U.S. District Court for the Southern District of Texas also ordered Hirko, 53, of Portland, Oregon, to forfeit about $US7 million in restitution to victims through the U.S. Securities and Exchange Commission’s Enron Fair Fund.

Hirko pleaded guilty on Oct. 14 to one count of wire fraud, charged in a superseding indictment.

In July 2005, Hirko and four other EBS executives were tried on various charges of conspiracy to commit securities and wire fraud, insider trading and money laundering relating to their employment at Enron.

The case resulted in a mistrial, and Hirko was subsequently charged in a superseding indictment with wire fraud, securities fraud and insider trading.

Hirko and the other EBS executives hyped products that didn't exist, the DOJ said. Hirko participated in an Enron analyst conference in Houston at which Enron introduced EBS as one of its “core” units, according to the plea agreement.

Enron also announced the development of a broadband operating system or “BOS," and the product was purported to be an “intelligent” operating system that included a standard protocol for accessing real-time bandwidth.

Enron issued a press release on May 15, 2000, announcing the acquisition of Warpspeed Communications.

The Warpspeed release falsely represented the status of the BOS and implied that it was already embedded and functioning as a part of Enron’s network, according to the plea agreement.

The Warpspeed release said that the BOS "allows application developers to dynamically provision bandwidth on demand for the end-to-end quality of service necessary to deliver broadband content."

Hirko reviewed and approved this language even though the Warpspeed release was inaccurate, the DOJ said.

Hirko acted with "reckless indifference" to the true facts, saying that the BOS was embedded on Enron’s network, and that it could dynamically provide bandwidth on demand or provide for the end-to-end quality of service necessary to deliver broadband content, the DOJ said in a press release.

Hirko’s approval of the Warpspeed release, as well as other press releases, assisted in maintaining Enron’s overall stock price, thereby improperly maintaining the value of Hirko’s holdings of Enron stock, the DOJ said.

Join the Good Gear Guide newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags jailEnronlegal

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?