HOUSTON – Just days before he was set to be sentenced, a former Enron Corp. executive's fraud and conspiracy convictions related to the company's broadband unit were overturned Wednesday 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 monthlong trial. Howard had been set 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.

On Wednesday, U.S. District Judge Vanessa Gilmore vacated all five counts Howard was convicted of, saying in a 19-page ruling the convictions were tied to a flawed legal theory prosecutors used to explain the fraud and conspiracy charges.

Kevin Howard

Gilmore based her decision on a ruling in August in which the 5th U.S. 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.

Gilmore said the decision in the Merrill Lynch case compelled her to vacate Howard's convictions.

"An important tenet of our criminal justice system is that a defendant is innocent until proven guilty beyond a reasonable doubt," Gilmore wrote in her ruling. "When it is uncertain whether a defendant was convicted under an appropriate standard, the integrity of the judicial system is undermined."

Jack Zimmermann, one of Howard's attorneys, said his client was gratified with Gilmore's ruling.

"Kevin Howard has maintained faith in the system," he said.

Howard and Krautz were the first of five broadband executives to be retried in separate cases after the original trial of the entire group ended in a hung jury in 2005. Although Enron was primarily an energy trader, the broadband unit was created in 1998 as another growth engine during the dot-com boom.

Howard was accused of conspiring to manufacture earnings for the failing broadband unit in late 2000 by selling an interest in future revenue of a video-on-demand venture that never made a profit. Prosecutors alleged the deal, "Project Braveheart," was a sham because investors were promised to be bought out at a premium, making the sale a disguised loan.

Zimmermann, who defended Howard with attorney Jim Lavine, said prosecutors could still decide to retry him for a third time. A hearing in the case is set for Feb. 20.

"We would hope the government would carefully evaluate their options and decide a third trial is not in the best interests of the taxpayers and the government anymore than it is in the interests of Mr. Howard," he said.

A spokesperson for the Justice Department did not immediately return a telephone call Wednesday evening seeking comment.

Prosecutors had conceded the four fraud and conspiracy counts against Howard should have been vacated because of the flawed legal theory.

But they had contended the falsifying records count should remain because trial evidence had proved that through his participation in Project Braveheart, Howard had directly "caused the falsification of Enron's earnings and therefore of its books and records."

Gilmore said she didn't believe such evidence was presented at trial that would have compelled the jury to find Howard guilty of falsifying records without relying on the other flawed counts.