Take it easy on Qwest's Szeliga
Exec has aided case against former CEO Joe Nacchio, others.
Sentencing, already delayed three times, will be Friday.
Critics suggest the ex-CFO will then have less incentive to
By Greg Griffin, Staff Writer
Thursday, July 27, 2006
Prosecutors have recommended a lenient sentence for former
Qwest chief financial officer Robin Szeliga in return for
her cooperation in their case against her old boss, Joe
Szeliga pleaded guilty in June 2005 to one count of illegal
insider trading. The maximum sentence is 10 years in prison
and a $1 million fine.
The government on Wednesday recommended that she receive a
maximum sentence of six months in jail. She also could be
sentenced to probation of up to five years and face a fine.
Szeliga, 45, is scheduled to be sentenced by U.S. District
Judge Walker Miller on Friday in Denver.
In its filing, prosecutors said Szeliga has provided
information that is "significant and useful to the
government's investigation of Qwest."
"In some instances, the defendant was one of only three
participants in key communications. Her knowledge of these
communications has been essential to the Government's
investigation," prosecutors said.
The Justice Department charged Nacchio with 42 counts of
illegal insider trading in December. The government claims
Nacchio sold $100.8 million in stock from January to May
2001 when he knew, but did not disclose to the public, that
Qwest was teetering on the brink of financial disaster.
The government is relying on information from Szeliga and
other former Qwest executives to document what Nacchio knew
when the sales occurred.
In January, prosecutors revealed a series of e-mails among
Nacchio, Szeliga and former Qwest president Afshin Mohebbi.
The e-mails show the Qwest executives scrambling to make
revenue targets with seemingly questionable tactics such as
booking one-time revenue items as recurring revenue.
Nacchio has pleaded not guilty to the insider-trading
charges and is seeking to have them dismissed. His
attorneys have said Nacchio did not believe Qwest was facing
major financial problems when he sold the stock. They also
have argued that he knew Qwest was in line to receive
lucrative, secret government contracts that would boost its
Prosecutors typically wait until a witness has testified
during trial before agreeing to a lenient sentence. But
Szeliga's sentencing has been pushed back three times, and
Miller said in a hearing in April he would not delay it
The early sentencing could hurt the government if Szeliga
becomes less cooperative going forward, said former federal
prosecutor Greg Goldberg, who is not involved in the case.
"They're giving her a substantial reduction before she
actually has to perform with 'live ammo' in the Nacchio
trial," said Goldberg, a lawyer with Holland & Hart.
Justice Department spokesman Jeff Dorschner said Szeliga is
compelled by her plea agreement to cooperate after
sentencing, and that the government is confident she will do
Qwest's stock fell from $64 in 2000 to $1.11 in August 2002,
a drop in market capitalization of $91 billion. Nacchio was
forced out in mid-2002. After he left, the company restated
its revenues and earnings by $2.5 billion.
Staff writer Greg
Griffin can be reached at 303-820-1241 or