Former Enron Broadband Executive Surrenders To FBI - InformationWeek

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Former Enron Broadband Executive Surrenders To FBI

Rex Shelby is chaarged with selling large amounts of company stock when he knew his telecom unit was failing

HOUSTON (AP) -- A former Enron Corp. executive surrendered Wednesday to the FBI on charges he allegedly sold large amounts of company stock when he knew his telecommunications unit was failing.

Rex T. Shelby, 51, a former vice president of engineering operations for Enron Broadband Services, is charged with fraud, money laundering, insider trading and conspiracy.

Shelby's attorney, Edwin Tomko, called the charges "far-fetched" and said his client would be exonerated. Shelby later appeared before U.S. Magistrate Marcia Crone and pleaded innocent. Crone set his bond at $1 million.

Four other former Enron Broadband executives--Kenneth Rice, Joseph Hirko, Kevin Hannon and F. Scott Yeager--face similar charges. They surrendered last week and have pleaded innocent.

Shelby was allowed to postpone his surrender because his father underwent surgery last week.

The government contends that the men made some $186 million from their stock sales and is seeking forfeiture of more than $100 million of those profits.

Prosecutors contend that although Enron claimed the broadband unit earned millions in profits, it never even generated any revenue. Enron abandoned the unit shortly before filing for bankruptcy in December 2001.

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