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Depositions roll in Qwest suit
The civil fraud case against former execs had been idle during Joe Nacchio's appeals.
By Andy Vuong
Denver Post
Thursday, March 12, 2009

Lee Wolfe.  Greg Casey.  Robin Szeliga.

The one-time Qwest officials helped the government land a criminal insider-trading conviction against former chief executive Joe Nacchio, providing key testimony at his trial in 2007.

They've resurfaced, this time in a 4-year-old civil fraud lawsuit against five other former Qwest executives and employees, including Nacchio.

A ruling in December allowed the defendants in the civil case to interview Wolfe, Casey and Szeliga against the objections of the Justice Department.  The government wanted to delay their depositions until after an appeals court ruled on Nacchio's conviction.

"At some point it is fundamentally unfair to suggest as months go by, as recollections become fuzzier and fuzzier, these defendants should have to sit on the sidelines," Magistrate Judge Craig Shaffer said at a Dec. 9 hearing, according to a transcript.

The decision allowed the oft-delayed case to proceed, though it is still at least a year away from going to trial, if at all.  The ruling also provided Nacchio ammunition for his latest bid for a new trial on the insider-trading conviction.

The defendants in the civil case are Nacchio, former president Afshin Mohebbi, former chief financial officer Robert Woodruff and former accountants Frank Noyes and James Kozlowski.

The Securities and Exchange Commission accuses them of fraudulently boosting Qwest's revenue by $3 billion from 1999 to 2002 and is seeking repayment of stock-sale profits and, in some cases, salaries.

Szeliga, Wolfe and Casey were interviewed by defense attorneys last month, according to Kozlowski's attorney, Kevin Evans.

Szeliga, a former chief financial officer who resides in the metro area, was interviewed in Denver.  Wolfe, a former investor-relations director, flew from his home in New Jersey to Denver for questioning.  Casey, a former wholesale-sales chief, was deposed at his attorney's office in Washington.

About 50 to 60 people have been interviewed in the civil case as part of an evidence- gathering process called discovery.

"What's happened in discovery as far as my client is concerned is pretty powerful," Evans said.

Evans said he plans to move for dismissal of the case against Kozlowski in June, the deadline for such a request.

The depositions haven't been made public.

Nacchio was convicted on 19 counts of insider trading connected to his sale of $52 million in Qwest stock in early 2001 and sentenced to six years in prison.

The 10th Circuit Court of Appeals affirmed Nacchio's conviction and revoked his bail last month. On Wednesday, Nacchio asked a U.S. District Court in Denver to continue the bail pending his petition to the Supreme Court.

Andy Vuong: 303-954-1209 or

What's to come

  Depositions of key witnesses were conducted in February.

  Reports on potential expert witnesses are due in April.

  Summary judgment papers are due in June.

  Motion to dismiss by defendants is still pending.

  The earliest the case will go to trial is 2010, if at all.