Government Alleges Fraud at QwestFeb 22, 2003 | Thestreet.com
A government investigation into Qwest's bookkeeping reportedly resulted in both civil and criminal suits against several current and former employees Tuesday.
In the Securities and Exchange Commission's civil suit, eight current and former Qwest employees are alleged to have jumped the gun on booking revenue related to sales of equipment to the Arizona Schools Facilities Board and fellow telecommunications carrier Genuity according to published reports.
The suit alleges "a fraudulent scheme orchestrated to meet at all costs Qwest's predictions of double-digit revenue growth."
A criminal indictment unsealed by the Justice Department alleges four former Qwest managers falsified revenue in the second quarter of 2001 by $33 million.
Over the past eight months, Qwest has restated its revenue by a total of $2.2 billion, citing wrongly booked revenue in so-called capacity swap transactions in which it traded network space with other telecom carriers. The complaints filed Tuesday relate primarily to the sale of telecommunications equipment to its customers.