Enron exec's fraud convictions overturned

Just days before he was set to be sentenced, a former Enron executive’s fraud and conspiracy convictions have been overturned by a federal judge.

Former broadband unit finance chief Kevin Howard was convicted in May on five counts of fraud, conspiracy and falsifying records after a month-long trial.

Howard had been due to be sentenced on Monday.

Former in-house accountant Michael Krautz was acquitted of the same charges in the same trial. Both men were accused of participating in a small piece of the fraud that brought down Enron in 2001.

Yesterday, US District Judge Vanessa Gilmore quashed the convictions on all five counts Howard had been found guilty of, saying in a 19-page ruling that the convictions were tied to a flawed legal theory prosecutors used to explain the fraud and conspiracy charges.

Gilmore based her decision on a ruling in August in which the 5th US Circuit Court of Appeals reversed several convictions against four former Merrill Lynch executives found guilty of helping engineer Enron’s 1999 sale of mobile power plants to the brokerage to help the energy trader appear to have met earnings targets.

The appeals court found fault with the government’s arguments of criminal liability and deprivation of honest services.

Enron, once the US' seventh-largest company, crumbled into bankruptcy proceedings 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 $60bn (€46bn) in market value and more than $2bn (€1.5bn) in pension plans.