Ex-Qwest finance chief spared prison time for insider
Rocky Mountain News
Saturday, July 29, 2006
Szeliga, the highest-ranking executive from Qwest to plead
guilty in the government's case, is expected to be a key
witness in the trial of former Qwest CEO Joseph Nacchio, who
faces 42 counts of insider trading. U.S. Attorney Bill
Leone called Szeliga's help in that case "very substantial."
U.S. District Judge Walker Miller agreed with prosecutors
who asked for a lenient sentence because of her cooperation
in the investigation into Denver-based Qwest Communications
"It is my practice to give careful consideration,
considerable weight, to the parties' agreement because they
know considerably more about the case than I will every
know," Miller said. He said the request for leniency was
legal, though he questioned attorneys on both sides how
Szeliga's plea deal compared with other Qwest cases.
"I do not divorce this conduct from the overall illegality,"
Miller said. "There does seem to be a culture of -- I would
use the word -- greed."
"We had to do a lot of soul searching and study "to arrive
at the sentencing recommendation for Szeliga, Leone said.
Terry Bird, her attorney, said Szeliga "is unemployed and
unemployable." He said she has lost a job since leaving
Qwest because she was a "headline risk" and has kept busy by
teaching yoga and through volunteer work.
In previous cases, former Qwest executive Marc Weisberg
received probation and a $250,000 fine for wire fraud. Of
four former midlevel executives accused of improperly
booking revenue in an Arizona schools deal, two were
acquitted, another was sentenced to probation and a fourth
is expected to receive probation.
Qwest earlier agreed to pay $250 million to settle SEC
charges of fraud in a deal that did not cover individual
official -- including Nacchio.
As with the WorldCom and Enron cases, cooperation from a
former executive like Szeliga is expected to help
prosecutors as they put Nacchio on trial.
"The government needs her assistance," Houston securities
lawyer Thomas Ajamie said before the hearing. "You can
never have too many insiders testifying when you are trying
to nail the CEO."
In a pending civil case, Szeliga, Nacchio and other former
executives are accused of orchestrating massive financial
fraud at Qwest.
The SEC has said the fraud at Qwest occurred between April
1999 and March 2002, allowing it to improperly report
approximately $3 billion in revenue that later was restated.