Accusations of an "alleged plot" resurfaces.....
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Qwest case finger-pointing
Former accountant, lawyer name SEC figures in alleged plot
By Jeff Smith, Rocky Mountain News
May 10, 2006
A former Qwest accountant alleges the Securities and Exchange
Commission's top enforcement cop in Washington wanted to sue him
for fraud even though the SEC's Denver regional director
acknowledged the accountant had a strong defense. Former Qwest
accountant James Kozlowski has made the general claims before.
But a Denver federal court filing this week by Kozlowski's
attorney Kevin Evans actually named the high-ranking SEC
officials involved in the alleged politicking.
Randall Fons, former director of the SEC's regional office in
Denver, was identified as the SEC official who allegedly told
Evans in December 2004 that he had made a persuasive argument
against civil-fraud charges being filed against Kozlowski.
Evans alleges Stephen Cutler, then the SEC's top enforcement
director, said at a later meeting that "the SEC had several
investigations in which accountants were pointing fingers at
each other, and the SEC needed to send a message to the
The SEC last March filed civil fraud charges against seven
former Qwest executives, including Kozlowski and former CEO Joe
Nacchio, alleging they participated in a $3 billion financial
fraud between 1999 and 2002.
Evans also has argued that Kozlowski got sued because he didn't
"spill the beans" against Nacchio.
Fons, now a partner at the law firm Morrison & Foerster in
Denver, didn't immediately comment when contacted Tuesday.
Cutler, now with the law firm WilmerHale in Washington, D.C.,
didn't respond to a telephone call and e-mail for comment.
It's not the first time regulators or prosecutors have been
accused of charging someone connected to the Qwest case just to
have an accountant as one of the defendants.
Former Qwest controller Bryan Treadway was indicted in
connection with an Arizona revenue-inflation case but was
acquitted by a jury in 2004 of all 11 counts against him.