The Association of U S West Retirees



Szeliga settlement another boost for fund
Investors will get $577,000 if court OKs agreement
By Jeff Smith
Rocky Mountain News
Wednesday, May 16, 2007

It's not a lot in the scheme of things, but a Qwest investors restitution fund has been boosted by more than $3 million as a result of settlements between the federal government and former Qwest executives.  Most recently, former Qwest Chief Financial Officer Robin Szeliga agreed to pay more than $577,000 to settle civil fraud charges with the Securities and Exchange Commission.  The agreement still must be approved by the court.

According to court filings, Szeliga previously paid $125,000 of restitution and $5,547 in interest into the investor distribution fund in connection with pleading guilty to one felony count of insider trading.

Gregory Casey, who once headed Qwest's wholesale division, paid $2.1 million into the investors fund as part of settling civil fraud charges with the SEC in 2005.

Other payments into the fund by former Qwest executives who have settled SEC charges include:  Augie Cruciotti, $350,000;  Roger Hoaglund, $300,000;  and William Eveleth, $105,575, according to court filings.

Szeliga's $577,052 settlement includes forfeiting $226,135 of profits, or "ill-gotten gains," $100,917 of interest from her profits, and a $250,000 civil penalty.

She will be prohibited from paying the penalty out of her executive indemnification insurance with Qwest.

"It wouldn't serve as a penalty if she gets reimbursed," said SEC assistant regional director Mary Brady.

More money may eventually come into the investors fund as SEC civil fraud lawsuits remain pending against former Qwest CEO Joe Nacchio, former Chief Operating Officer Afshin Mohebbi, former Chief Financial Officer Robert Woodruff, and former accountants Frank Noyes and James Kozlowski.

The SEC wants $216 million from Nacchio, $41 million from Woodruff and $5.9 million from Mohebbi.  Claims against Nacchio have been strengthened in the wake of his conviction last month on 19 insider-trading charges.

But the SEC requested $34.9 million from Casey and wound up settling for a fraction.

Tallying settlements

More than $3 million in a Qwest investor victims fund comes from federal settlements with former executives:

  Former CFO Robin Szeliga:  $125,547 (criminal insider trading plea), $577,000 from a SEC settlement (still must be approved by court).

  Former EVP/wholesale Gregory Casey:  $2.1 million (SEC settlement).

  Former EVP/network operations Augie Cruciotti:  $350,000 (SEC settlement).

  Former SVP Roger Hoaglund:  $300,000 (SEC settlement).

  Former SVP William Eveleth:  $105,575 (SEC settlement).

Source: Court filings or 303-954-5155,2777,DRMN_23910_5538681,00.html

See what's free at