right-hand man on stand
Case may hinge upon Mohebbi
By Andy Vuong and Will Shanley
Denver Post Staff Writers
Friday, March 30, 2007
Former Qwest president Afshin Mohebbi began testifying Thursday
against his former boss, Joe Nacchio, in what legal experts say
could be make-or- break testimony for the prosecution in the
criminal insider-trading case against Nacchio.
Mohebbi's late-afternoon entrance appeared to rouse the
18-member jury, some of whom sat up in their chairs and began
After touching on Mohebbi's background Thursday, prosecutor
Cliff Stricklin began delving into Mohebbi and Nacchio's work on
Qwest's "hostile takeover" of Baby Bell US West. Plans were
made in June 1999, shortly after Mohebbi's arrival at Qwest.
"I wouldn't call it hostile. I would call it not friendly," said
the soft-spoken Mohebbi, drawing laughter in the courtroom.
After a defense objection about the reason for discussing the
merger in detail, Stricklin told Judge Edward Nottingham that he
wants to show Nacchio's state of mind while he drew aggressive
five-year growth targets for the combined Qwest/US West.
Several former Qwest executives have testified they warned
Nacchio that the targets were too high after the companies
merged in June 2000. They said Nacchio disregarded their
warnings several times and continued to reassure Wall Street of
Mohebbi's testimony Thursday lasted about 40 minutes before the
trial was adjourned for the week. He will return to the stand
at 8:45 a.m. Monday, when he'll likely resume testifying about
the behind-the-scenes work on the merger.
Mohebbi, 43, was considered Nacchio's right-hand man during much
of his tenure at Qwest between 1999 and 2002. Mohebbi left the
company a few months after Nacchio was ousted by Qwest's board
of directors in mid-2002.
"It's life or death," said Lynn Turner, formerly chief
accountant for the Securities and Exchange Commission, speaking
of what Mohebbi means for the prosecution's case. "Unless the
prosecution can pull a rabbit out of its hat with Mohebbi, they
are probably out of luck."
Mohebbi must "provide clear data that shows Nacchio knew the
company was going to take a downturn and that Nacchio sold the
stock on that," said Turner.
Mohebbi, Nacchio and other Qwest executives were sued in 2005 by
the SEC, which alleged "massive financial fraud" at Qwest that
later resulted in the company's restatement of $2.5 billion in
revenue. Elements of the SEC case are on hold pending the
resolution of the criminal case, according to the SEC.
Mohebbi told the court he has received immunity from criminal
While the defense will likely attack Mohebbi's immunity deal as
a means to tarnish his credibility, such deals are part of most
white-collar criminal cases, said Christopher Bebel, a Houston-
"It's par for the course," said Bebel, formerly a federal
prosecutor. "If you want to know what happened in the sewer,
you have to go down there and pull out the rats."
Turner, the Broomfield-based director of research for Glass
Lewis & Co., an investor-advisory firm, said the prosecution
probably made a calculated decision to wait until near the end
of its case before calling Mohebbi.
The reason for that, Turner said, is that Mohebbi is "the best
person" to ask about what was going on at Qwest in 2001.
Mohebbi stopped short of providing damning testimony against
Nacchio during a 2005 grand-jury hearing, according to a
transcript filed with the court.
In answer to a question from a juror then about whether Nacchio
was "lying to the public," Mohebbi replied, "I don't know what
was in his mind."
Mohebbi lives in California and is currently a director with
Hanaro Telecom, based in South Korea. He is a member of the
board of directors of BearingPoint Inc., a global consulting
firm based in McLean, Va. He also is an adviser for Athena
Technology Ventures, a Palo Alto, Calif.-based venture-capital
Mohebbi told the court that he was born in Iran, moved to the
United States in 1978 and graduated from the University of
California at Irvine at age 18.
When asked by Stricklin how he managed to earn a bachelor's
degree at such a young age, Mohebbi said, "I took a lot of
courses," drawing laughter from the courtroom.
Staff writer Will Shanley can be reached at 303-954-1260 or
Staff writer Andy Vuong can be reached at 303-954-1209 or