Sixth Qwest ex-exec will
By Tom McGhee, Staff Writer
Tuesday, May 24, 2005
Former Qwest wholesale chief Gregory M. Casey has agreed to settle charges alleging he took part in a fraudulent scheme to help inflate the telecom's earnings, according to a court document.
Casey would be the sixth of a dozen former Qwest executives sued by the Securities and Exchange Commission in March to settle.
Casey has asked for more time to answer the charges so the SEC, which must approve a settlement, can consider the agreement, according to the document filed Monday in U.S. District Court in Denver.
Neither Casey, his attorneys, nor the SEC could be reached for comment late Monday.
The SEC accused the executives of a "massive financial fraud" that caused Qwest to record about $3 billion in false revenue and helped inflate its stock to cinch a 2000 merger with Baby Bell US West.
To assure that Qwest's accountants and outside auditors didn't object to the company immediately booking revenue that should have been booked over an extended period, or not at all, Casey hid facts about the arrangements, according to the suit.
The lawsuit also alleges that Casey backdated contracts "for the explicit purpose of falsely making it appear that immediate revenue recognition was appropriate in a specific quarter."
From 1999 through 2001, Casey's compensation - including salary, bonus and profits from the sale of Qwest stock - was $34.9 million, according to the complaint.
Besides Casey, the remaining defendants are former chief executive Joe Nacchio; former chief financial officers Robert S. Woodruff and Robin R. Szeliga; former president and chief operating officer Afshin Mohebbi; and accountants James J. Kozlowski and Frank T. Noyes.
The SEC suit seeks to have the executives repay stock-sale profits, bonuses and, in some cases, salaries. In Nacchio's case, stock-sale profits alone amounted to more than $176.5 million in the time frame covered by the SEC probe.
Executives who have already settled with the SEC are former pricing manager Roger B. Hoaglund; former senior vice president of finance William Eveleth; former controllers Mark A. Schumacher and Bryan K. Treadway; and Jennifer J. Tanner, a former director in the accounting group.
Staff writer Tom McGhee can be reached at 303-820-1671 or firstname.lastname@example.org.
SEC settlements in Qwest case
Gregory M. Casey, former wholesale sales chief: Terms not known
William Eveleth, former senior vice president of financial planning and analysis: Fine of $75,000 and payback of $35,575, plus interest; may not be officer or director of a public company for five years
Roger B. Hoaglund, former senior vice president of pricing and offer management: $100,000 fine; payback of $200,000, plus interest
Bryan K. Treadway, former assistant controller and controller: Fine of $40,000
Mark A. Schumacher, former controller: Fine of $40,000
Jennifer J. Tanner, former director of finance in accounting group: Cease and desist order; no fine