HOUSTON – The former head of bankrupt Enron Corp.'s (search) broadband division pleaded guilty to one count of securities fraud Friday.
Kenneth Rice (search), 45, agreed at a hearing to pay a forfeiture of $13.7 million. He could be sentenced to up to 10 years in prison.
Rice was the co-chief executive of Enron Broadband Services (search) from July 1999 until July 2001, just five months before Enron filed for what was then the biggest bankruptcy ever.
A 218-count indictment last year charged Rice and six other former Enron executives with engaging in fraud, money laundering, insider trading and conspiracy while working at the broadband division.
At the hearing, Rice said he misrepresented the development state of Enron Broadband's software and knowingly made false statements about it.
Rice is cooperating with authorities in the cases against the other executives.
He will be sentenced on Jan. 31, 2005.
Rice and the other executives were charged with making bogus claims about the capabilities and value of the fledgling business, while knowing the unit was losing money. Hype about the unit, which Enron executives had said could eventually eclipse its natural gas business in terms of earnings, in one day sent Enron stock up by $13.
The other executives are former co-chief executive Joseph Hirko, former Chief Operating Officer Kevin Hannon, technology executives Rex Shelby and Scott Yeager and finance executives Michael Krautz and Kevin Howard.