Qwest civil suit delayed
Criminal prosecutor wants first crack at key witnesses
By Greg Griffin, Staff Writer
Thursday, August 18, 2005
A federal judge Wednesday postponed until Sept. 30 key interviews in a class-action shareholder lawsuit against Qwest and former top executives.
Lawyers in the 4-year-old case had scheduled deposition interviews in coming weeks with critical players including ex-chief executive Joe Nacchio, ex-chief financial officer Robert Woodruff and director Philip Anschutz.
But U.S. Attorney William Leone, whose three-year criminal investigation into Qwest and former executives has gained momentum in recent months, asked the court to suspend all depositions in the shareholder suit.
Leone said in his Aug. 3 motion that he doesn't want sensitive information from witnesses being disclosed prematurely in the civil cases. Legal experts say he also may want to keep witnesses from giving potentially contradictory information in their civil and criminal testimonies.
Federal Magistrate Judge Craig Shaffer granted Leone's request in part. He said a handful of scheduled depositions with people Leone didn't name in his motion may proceed.
Prosecutors sought and received a similar delay in the U.S. Securities and Exchange Commission's civil lawsuit against Qwest and a handful of former executives two weeks ago. That suit alleges that Nacchio and others engaged in a $3 billion scheme to inflate revenues and mislead investors. Nacchio denies the allegations.
The criminal investigation focuses on "insider trading and securities disclosures issues" from 2000 to 2002, according to Leone's motion.
Former chief financial officer Robin Szeliga pleaded guilty last month to insider trading. She agreed to cooperate with prosecutors, who are believed to be zeroing in on Nacchio and perhaps others.
At least two other former executives - Thomas Hall and Grant Graham - also are cooperating. Another, Marc Weisberg, has pleaded not guilty to charges of wire fraud and money laundering. His trial is scheduled for next January.
Leone may return to Shaffer next month to ask for a longer suspension in fact-finding in the civil cases.
Leone said Wednesday he also will seek a delay in a suit against Qwest filed by the California State Teachers Retirement System.
Staff writer Greg Griffin can be reached at 303-820-1241 or firstname.lastname@example.org.