Risk Management

Quagmire in Qwest Trial?

In the category Criminal Trials ''Q'', ''quickly'' is not the answer.
Dave CookApril 15, 2004

The jury in Qwest Communications International Inc. trial has reached a verdict on 24 counts. That’s a little more than halfway there, according to the judge.

In a federal court in Denver, four former Qwest executives — Grant Graham, former chief financial officer for Qwest’s global business unit; Bryan Treadway, a former assistant controller; Thomas Hall, a former senior vice president, and John Walker, a former vice president — face 11 charges each, or a total of 44 counts, including conspiracy, securities fraud, wire fraud, and making false statements to auditors.

The four are accused of improperly booking $34 million in revenue in the second quarter of 2001, for an Internet equipment sale to Arizona schools, to help meet earnings projections and revenue expectations. According to the prosecution, the defendants artificially accelerated Qwest’s revenue recognition by fraudulently mischaracterizing two equipment-sale transactions.

In the ongoing jury deliberations, after the panel sent a note to U.S. District Judge Robert Blackburn suggesting that they were stalled on 20 charges, Blackburn told them — in short — to keep at it. Former federal prosecutor Tony Leffert said that the judge would probably be “very resistant” to declaring a hung jury on some of the charges, according to the Rocky Mountain News. “The first few times they say they are deadlocked, he’s likely to say, ‘Keep on deliberating,’ ” added Leffert, according to the paper.

The jury is not sequestered, but the Denver Post observed that this remains an option for Blackburn can if he finds that “one or two holdout jurors… are preventing the jury from reaching unanimous decisions on all charges.”

Legal experts believe that previous questions from the jury suggest that the securities fraud charges are the subject of the impasse. Twice last week the jury asked Blackburn to clarify the meaning of “willfully,” which according to the Post relates to those charges.

Deliberations began April 5 after a seven-week trial, according to the Associated Press, and were to resume today.

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