3 Ex-Qwest Execs Plead Innocent to Fraud
3 Ex-Qwest Execs Plead Innocent to Fraud
source: Associated Press Tech News
Three former Qwest Communications International Inc. executives pleaded innocent Wednesday to charges that they committed fraud by artificially inflating revenues to meet Wall Street targets.
Thomas Hall, John Walker and Bryan Treadway were among four former company executives named in a 12-count indictment. Grant Graham pleaded innocent Friday.
The three entered their pleas through attorneys during a brief hearing before U.S. Magistrate Craig Shaffer. Hall and Walker were in the courtroom. Treadway, an Atlanta resident, entered his plea before the hearing.
Each of the four remained free on $100,000 bond. They do not have to pay the money unless they fail to appear in court.
The former executives surrendered last week after they were named in an indictment charging them with seeking to create more than $33 million in revenue by wrongly reporting a purchase order with the Arizona School Facilities Board.
Prosecutors said their evidence is contained on two CD-ROMs comprising up to 20,000 pages.
Four of the counts each carry 10 years in prison and a $1 million fine. The other charges could bring five years in prison and $250,000 fines.
Graham, 37, is former chief financial officer of Qwest’s global business unit. Hall, 51, was a senior vice president of that unit’s government and educational solutions division. Treadway, 37, was a former controller. Walker, 41, was a vice president of sales for the government and educational solutions division.
Those four, three other ex-Qwest executives and one current officer also were named in a civil lawsuit filed by the Securities and Exchange Commission alleging they inflated revenues by about $144 million in 2000-2001.
The Denver Post reported Wednesday that the targeted executive who is still with the company, William Eveleth, has been placed on administrative leave. Qwest refused to comment.
Since the SEC began investigating Qwest last spring, the company has said it was restating about $2.2 billion in revenue.
The SEC said it wants the men to repay their salaries, bonuses and stock gains during the 1 1/2 years they allegedly engaged in fraudulent activities.
Qwest is the local phone company for 14 states extending from Minnesota west to Washington state and southwest to Arizona and New Mexico. It bought US West, one of the Baby Bells created from the breakup of AT&T, following a bidding war with Global Crossing.
Qwest shares fell 1 cent to $3.24 in trading Wednesday on the New York Stock Exchange.
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