Ex-Qwest exec faces charges

DENVER — A former chief financial officer became the highest-ranking executive from Qwest Communications to face a criminal charge when prosecutors accused her Thursday of improperly pocketing $410,000 from a 2001 stock sale.

Robin Szeliga, who was charged with one count of insider trading, has reached a plea agreement and will cooperate with prosecutors in an ongoing accounting investigation at Denver-based Qwest, acting U.S. Attorney Bill Leone said.

Terms of the deal were not disclosed, and Leone declined to provide details pending a judge's review. A change-of-plea hearing is scheduled in U.S. District Court for July 14.

Szeliga, 44, pleaded not guilty during a brief court appearance. If convicted, she faces a maximum of 10 years in prison and up to a $1 million fine.

A telephone message seeking comment from Szeliga's attorney was not returned.

Szeliga is the highest-ranking former executive from Qwest Communications International Inc. to be charged in the government's three-year criminal investigation of the telecommunications company. She also faces civil fraud charges in a separate case filed by the Securities and Exchange Commission.

In the criminal case, Szeliga is accused of selling 10,000 shares of Qwest stock at $41 a share based on nonpublic information about financial and operating performances. Prosecutors said the sale resulted in a net profit for Szeliga of $125,000.

Prosecutors said Szeliga knew various business units would fail to meet revenue targets during the first and second quarters of 2001 as had been promised to investors, and that the company improperly used nonrecurring revenue to meet those goals.

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 helped clear the way for its 2000 merger with US WEST. The revenue was later restated.

Among other things, the SEC said Qwest repeatedly booked revenue from one-time sales while falsely claiming to investors that the income was recurring — allowing defendants to reap tens of millions in profits.

Qwest, the local phone provider in 14 Midwestern and Western states, including Utah, agreed last year to pay $250 million to settle SEC charges of fraud in a deal that did not cover individual officers.

The SEC lawsuit, filed in March, says Szeliga, former CEO Joseph Nacchio and five other former executives orchestrated a massive financial fraud.