Four current and former Qwest Communucations employees could be potential targets of a criminal probe into Qwest’s accounting, a source close to the investigation said Friday.
The source, who spoke on condition of anonymity, would not identify them.
The investigation concerns transactions with bankrupt Internet firm Genuity Inc. over sales of equipment Genuity did not want and how revenue was booked, according to documents filed in U.S. District Court Wednesday.
In one case, executives allegedly chartered a jet so a delivery could be made quickly to Massachusetts-based Genuity, so Qwest could book $100 million immediately.
The criminal investigation was disclosed when the U.S. attorney’s office in Colorado asked the Securities and Exchange Commission to suspend its civil case against eight former and current Qwest Communications International Inc. executives. They are accused of inflating revenues by $144 million in 2000 and 2001.
The SEC agreed to the delay, agency spokesman John Nester said.
Prosecutors worried the civil case would interfere with the criminal case because of different rules on evidence disclosure.
No criminal charges have been filed in the Genuity transaction, U.S. attorney spokesman Jeff Dorschner said. Dorschner declined additional comment.
On Feb. 25, federal prosecutors filed criminal counts against Grant P. Graham of Evergreen, Colo., chief financial officer for Qwest’s global business unit; Thomas W. Hall of Englewood, Colo., senior vice president in the global business unit; John M. Walker of Littleton, Colo., vice president in the unit; and Bryan K. Treadway of Atlanta, assistant controller.
Those four ande four others sued by the SEC are Joel M. Arnold, former senior vice president of the company’s Global Business division; Douglas K. Hutchins, a former director of the division; Richard L. Weston, former senior vice president of product development in Qwest’s Internet Solutions division; and William L. Eveleth, current chief financial officer of the corporate planning and operational finance division and a senior vice president of finance.
Eveleth has been on administrative leave. On Friday, Qwest spokesman Tyler Gronbach said Eveleth is still an employee.
Gronbach said the company is cooperating with both investigations.