A former executive of Enron Corp.'s broadband unit was sentenced Monday to two years in prison for his role in the once mighty energy giant's financial collapse.
Kevin P. Hannon, 46, former chief operating officer for the broadband unit, pleaded guilty to conspiracy in August 2004 for scheming with other executives to exaggerate Enron's broadband network capabilities to impress analysts and inflate company stock.
Hannon faced up to five years in prison.
During last year's trial of Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, Hannon told jurors that when a small analyst firm began to question Enron's finances at a May 2001 meeting with top executives, Skilling had said, "They're on to us."
Hannon later conceded it might have been no more than a sarcastic remark from Skilling, who was miffed at short-sellers betting that Enron stock would fall.
Hannon also told jurors Skilling misled Wall Street analysts about the future of the failing broadband unit during a March 2001 conference call.
Skilling told analysts then that bandwidth trading had enjoyed a "great quarter." Hannon told the jury the division was bleeding cash and facing layoffs without gaining any substantial revenue from bandwidth and on-demand video ventures.
Although Enron was primarily an energy trader, the broadband unit was created in 1998 as another growth engine during the dot-com boom.
Hannon was the second of several indicted former broadband executives who cut a deal. In late July 2004, the unit's former CEO, Kenneth Rice, pleaded guilty to a single count of securities fraud and cooperated with prosecutors. Rice is set to be sentenced June 18.