Ex-Qwest exec offers settlement

0 Comments | Deseret News (Salt Lake City), Jan 9, 2007 | by Sandy Shore Associated Press

DENVER -- A former Qwest Communications finance chief has reached a tentative settlement in a civil fraud lawsuit stemming from an accounting scandal that forced the telephone company to restate billions of dollars in revenue.

Details of Robin Szeliga's proposed settlement in principle, reached with Securities and Exchange Commission officials in Denver, were not disclosed in a status report filed Friday in court.

It is subject to formal approval by SEC officials in Washington, a process that could take months, her attorney, Thomas Reichert, wrote in the report.

A spokesman for the SEC's office in Denver declined comment Monday. A hearing on the status of the SEC's civil lawsuit is scheduled Wednesday in U.S. District Court.

Szeliga, former Qwest Chief Executive Officer Joe Nacchio and five other one-time executives were accused in March 2005 of orchestrating a massive financial fraud that forced Qwest to restate billions of dollars in revenue.

The SEC's case has been delayed by a criminal case against Nacchio, who faces 42 counts of insider trading stemming from $101 million in stock sales. He has pleaded not guilty.

His trial is scheduled to begin March 19. If convicted, Nacchio faces up to 10 years in prison and a $1 million fine on each count.

Szeliga is expected to be a key witness against Nacchio.

She has been sentenced to two years' probation and a $250,000 fine after pleading guilty to one count of insider trading.

The SEC has said the fraud at Qwest occurred between April 1999 and March 2002, allowing it to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of US WEST. The revenue was later restated.

Qwest Communications International Inc. is the primary local phone company in 14 Midwestern and Western states, including Utah.