Risk Management

Qwest Prosecutors End Up Empty-Handed

Jury that heard ''too much evidence'' returns two acquittals; judge declares a mistrial on deadlocked charges against the two other defendants.
Dave CookApril 19, 2004

In a federal court in Denver, the prosecution in the Qwest trial packed up for the weekend, empty-handed, with very little to show for a two-year investigation.

Four former executives of Qwest Communications International Inc. — 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 — had faced 11 charges each, including conspiracy, securities fraud, wire fraud, and making false statements to auditors.

The defendants had been 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.

On Friday, the 10th day of deliberations after a seven-week trial, Treadway and Walker were found not guilty on all counts. The jury found Graham not guilty on three counts and was deadlocked on the other eight, according to Reuters; the panel was deadlocked on all 11 counts against Hall. U.S. District Judge Robert Blackburn then declared a mistrial on the deadlocked counts against Graham and Hall, added the wire service.

In interviews with three jurors over the weekend, the Denver Post learned that within three days of deliberations, the eight-man, four-woman jury had already decided to acquit Treadway and Walker outright.

Turning to Graham and Hall — who worked in the same business unit, noted the Post — the jury used a whiteboard and “charted a timeline, mapping the overlapping of their correspondence,” said juror Dana Patton, 56, an aerial survey photographer from Arvada. Patton added, however, that the timeline never convinced all jurors of Graham’s and Hall’s motives beyond a reasonable doubt, reported the paper.

Very likely the prosecution piled on “too many irrelevant details,” as the Post put it. “They tried to cover too much evidence that wasn’t necessary to the case,” said jury foreman George Gerstle, 46, a manager for the Colorado Department of Transportation, according to the paper. “They threw everything and the kitchen sink [at the defendants] hoping that something would stick. Some of the jurors resented that.”

The jury acquitted Graham on three counts of wire fraud, reported the paper. Although it voted 10-2 for conviction on two counts of securities fraud, the panel ultimately deadlocked on the other counts against him. And although the jury came very close to acquitting Hall on 7 counts, the newspaper added, one wavering juror changed his mind shortly before the panel returned to the courtroom, and the jury ended up completely deadlocked on Hall.

Graham and Hall still face a possible retrial on all deadlocked counts. Judge Blackburn scheduled a status conference for April 26; by that time, said assistant U.S. attorney William Leone, the prosecution expects to decide whether it will retry the deadlocked charges, reported Reuters.