SEC asks judge to deny separate trials in Qwest
By Sandy Shore, AP
Friday, October 5, 2007
DENVER (AP) - Federal regulators asked a judge Thursday to
reject a motion seeking a separate trial for two former Qwest
accountants who are among five one-time executives of the
telecommunications company facing civil fraud charges.
In a 13-page brief, Securities and Exchange Commission attorneys
argued that James Kozlowski and Frank T. Noyes were senior
managers with "significant responsibility" when they worked at
The two men, former Qwest CEO Joe Nacchio, former finance chief
Robert Woodruff and former President Afshin Mohebbi are accused
of committing a fraud that nearly forced Qwest Communications
International Inc. into bankruptcy.
The SEC has said the executives' actions between April 1999 and
March 2002 paved the way for Qwest to improperly report
approximately $3 billion in revenue that helped seal its 2000
acquisition of former Baby Bell U S West. Qwest later restated
$2.2 billion in revenue.
The SEC wants repayment and civil penalties with amounts to be
determined at trial. No trial date has been set.
Noyes and Kozlowski asked the court to separate their trial from
that of the other three, arguing the allegations against them
were narrower in scope and they would be denied a fair trial if
all five were tried together.
"There would be so much evidence that does not pertain to
Kozlowski and Noyes that there would be a very real and
substantial danger of jury confusion and impermissible spillover
of evidence that would be inadmissible in a separate trial,"
their attorneys argued in a U.S. District Court brief.
SEC attorney Christopher Friedman countered in Thursday's brief
that Kozlowski and Noyes failed to show how a single trial would
harm their fair-trial rights but it would be inconvenient and
costly for the regulatory agency to be required to conduct two
In a separate criminal trial, Nacchio was convicted in April of
19 counts of insider trading stemming from the sale of $52
million worth of stock in 2001 at a time when he knew the
company was at financial risk but didn't tell investors.
Nacchio was sentenced to six years in prison but remains free on
bond pending an appeal of the conviction.