judge to reject ex-Qwest CFO's motion to dismiss case
By Sandy Shore
Friday, March 10, 2006
DENVER (AP) - Government attorneys asked a judge Thursday to
reject a former Qwest finance chief's motion to dismiss a
fraud lawsuit against her, saying the complaint provided
sufficient details for the case to proceed.
Attorneys representing the Securities and Exchange
Commission said the lawsuit lists dates and places of Robin
Szeliga's actions as well as statements she made.
"Szeliga is on notice of the charges against her and she is
able to answer and prepare a defense," the attorneys wrote
in a brief.
The document filed in U.S. District Court was in response to
a motion filed by Szeliga's attorneys asking a judge to
order the SEC to provide details about the allegations or
dismiss the claims. They contended the SEC took a
"smorgasbord" approach instead of providing specific
allegations against individual defendants.
The lawsuit against Szeliga is proceeding after her
tentative settlement with SEC officials collapsed. The
terms of that agreement were never made public.
Szeliga, former Chief Executive Officer Joseph Nacchio,
former Chief Financial Officer Robert Woodruff and four
other one-time executives were accused in March 2005 of
orchestrating a massive financial fraud that forced Qwest
Communications International Inc. to restate billions of
dollars in revenue.
The SEC wants repayment and civil penalties with amounts to
be determined at trial. Former sales executive Gregory
Casey is the only defendant who has settled, agreeing to pay
$2.1 million. He did not admit wrongdoing and agreed to
cooperate with federal investigators.
In a separate criminal case, Szeliga is scheduled to be
sentenced April 27 after pleading guilty last year to one
criminal count of insider trading.
She was accused of improperly selling 10,000 shares of Qwest
stock in 2001, earning a net profit of $125,000.
Authorities said she sold the stock knowing that some
business units would fail to meet revenue targets and that
the company had improperly used nonrecurring revenue to meet
The SEC has said the fraud at Qwest occurred between April
1999 and March 2002, allowing it to improperly report
approximately $3 billion in revenue that helped clear the
way for its 2000 acquisition of U S West. The revenue was
Qwest agreed last year to pay $250 million to settle SEC
charges of fraud in a deal that did not cover individual
Denver-based Qwest is the primary local phone company in 14
Midwestern and Western states.