civil case still on hold
Prosecutor stresses need for time to build criminal fraud
By Jeff Smith, Rocky Mountain News
November 18, 2005
Colorado's top federal prosecutor reiterated this week the
need for a freeze on the civil fraud case against former
Qwest CEO Joe Nacchio and others while his criminal
investigation continues. But U.S. Attorney William Leone
shed little light on how close he is to wrapping up the
case. In a filing Wednesday, Leone noted the court had
previously determined the stay should continue until
year-end, with the first hearing after that tentatively
scheduled for Jan. 13, 2006.
"That date remains a logical and meaningful time to consider
the issue," Leone wrote in response to a federal
magistrate's request for a status report. "The government
cannot further comment on the status of its criminal
Sources have told the
Rocky Mountain News that Leone is preparing to
seek an indictment soon against Nacchio on insider trading
charges. Leone declined to comment about the criminal
investigation when approached after a recent hearing.
Nacchio's longtime public relations spokeswoman Marcia
Horowitz said this week that all calls are now being handled
by Nacchio's New York attorney, Charles Stillman. Stillman
didn't return two phone calls this week but recently
asserted his client's innocence.
"Mr. Nacchio has repeatedly denied any wrongdoing and will .
. . fully assert his rights and defenses as Qwest's former
CEO," Stillman said in a statement.
An insider trading guilty plea last summer by former Qwest
Chief Financial Officer Robin Szeliga shows prosecutors are
focusing on Nacchio's nearly $50 million of stock sales in
April and May 2001.
In her plea agreement, Szeliga said she and other unnamed
"senior Qwest executives" knew by at least April 24, 2001,
that Qwest was meeting its revenue targets only through "gap
fillers" such as questionable one-time sales of network
capacity. But management withheld that information, Szeliga