Contact Us

PW Case Review Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 

Phone 

   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:
+
=

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.


Qwest Executives Could Be Charged Today

Feb 25, 2003 | USA TODAY Several former middle-level managers at Qwest Communications could face criminal charges as early as today for their roles in the phone company's accounting scandal, people familiar with the matter say.

The charges could come in the form of a criminal complaint, in which multiple charges are set forth, or an indictment, in which the former executives are charged.

Regardless, the charges would be the first in the federal probe of Qwest, the USA's No. 4 local telephone company.

Qwest, which declined comment, has been the subject of accounting investigations by the Department of Justice and Securities and Exchange Commission.

So far, Qwest's own internal probe has revealed $2.2 billion in improperly recorded revenue in 2000 and 2001. The company plans to restate results for those years, pending an audit by KPMG.

The accounting misdeeds span a range of methods:

* Qwest has admitted it improperly booked revenue from swaps of network capacity with other carriers and from equipment sales to customers.

* The company has also admitted to billing errors and to expenses that were under-reported or improperly deferred.

The expected criminal charges involve a deal in which Qwest wired Arizona schools for Internet use and sold them equipment, people familiar with the matter say. Qwest later determined that the revenue from the deal had to be reversed, in part because it booked revenue from equipment that had yet to be installed, sources say.

Qwest is one of several former highflying telecom giants along with WorldCom and Global Crossing to become embroiled in financial scandals that shattered investor confidence last year. All three companies were the subject of congressional hearings at which top executives and midlevel officers were grilled by lawmakers.

The former executives facing charges at Qwest are described as midlevel by people familiar with the probes. Their identities could not be determined Monday.

It is common for prosecutors to target lower-level managers first, hoping to work their way up to higher decision-makers.

The Enron Task Force has used criminal complaints as a first step in its legal actions against former Enron executives. The complaints allow prosecutors to show their targets and potential targets how strong their hand is, without committing prosecutors to a specific course of action.

The use of a criminal complaint against three British bankers last summer is believed to have helped the Enron Task Force convince former Enron executive Michael Kopper to plead guilty in August and cooperate in the prosecutors' investigation of higher-ups at Enron, including former chief financial officer Andrew Fastow.

The charges expected today or Wednesday in the Qwest case are not expected to include former CEO Joseph Nacchio, who was pushed out in June, or former president Afshin Mohebbi, who also resigned under pressure. Nacchio and Mohebbi have denied wrongdoing.

Related articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo