Feds win more time to
make Qwest case
By Greg Griffin, Staff Writer Denver Post
Thursday, September 29, 2005
A judge on Wednesday gave federal prosecutors until the end of the year to investigate former Qwest executives without interference from lawyers in related civil cases.
Prosecutors had sought the suspension of civil litigation, including a Securities and Exchange Commission suit against former Qwest chief executive Joe Nacchio and six others, since July.
U.S. Magistrate Judge Craig Shaffer gave them until Sept. 30 at that time and on Wednesday extended the suspension to Dec. 31.
The government's motion to delay fact-finding was opposed by at least one of the defendants in the SEC case and by lawyers representing shareholders suing Qwest because it bars them from conducting key interviews and collecting evidence at least until early next year.
Prosecutors' time frame for the suspension and their request for a delay until March 4 to sentence former chief financial officer Robin Szeliga are the best indication of when potential criminal indictments in the Qwest case may come. Szeliga pleaded guilty in July to one count of illegal insider trading and has agreed to cooperate with investigators.
Nacchio is believed to be among those under investigation.
The government has said that "sensitive information" gathered in its criminal investigation could be disclosed through discovery in the civil cases. Prosecutors are investigating "insider trading and securities-disclosures issues" among former Qwest officials from 2000 to 2002.
The SEC's civil case alleges Nacchio and others used accounting tricks to inflate Qwest revenues by $3 billion while selling their shares in the company. Nacchio has denied the allegations.
Staff writer Greg Griffin can be reached at 303-820-1241 or email@example.com.