Qwest Ex-CFO Faces Charges

Federal prosecutors charge that former Qwest (Q) CFO Robin Szeliga netted $410,000 from a 2001 insider stock sale that took place as the company was engaged in accounting misdeeds.

Szeliga is expected to plead guilty to the charges at a July 14 hearing in U.S. District Court in Denver. Szeliga is also exected to help prosecutors with a criminal investigation into other executives' roles in the telco's business practices, according to a person familiar with the case.

Szeliga is one of nine former Qwest executives, including onetime CEO Joe Nacchio, who were named as defendants in a civil lawsuit brought by the Securities and Exchange Commission in March. The SEC claims that between 1999 and 2002, the Qwest defendants booked $3 billion in bogus sales and "engaged in a multifaceted fraudulent scheme designed to mislead the investing public about the company's revenue and growth."

Last fall, Qwest paid $250 million to settle SEC fraud charges. The nine former executives face separate civil charges, including fraud, lying to auditors and making false filings to the SEC.

Nacchio pocketed more than $226 million on insider stock sales while he was running the company. Nacchio's public relations representative was unavailable for comment. Nacchio filed a motion Wednesday to have the SEC's fraud charges dismissed.

Qwest restated its sales figures dating back to 1999, after the company attracted the attention of regulators. The company erased $3 billion from its books, many of these proceeds stemmed from so-called swaps, or trades of network capacity with other telcos.

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