Risk Management

Sentencing Delayed for Former Qwest CFO

Robin Szeliga is cooperating in the government's insider-trading case against former chief executive officer Joseph Nacchio.
Stephen TaubApril 20, 2006

Former Qwest Communications International finance chief Robin Szeliga has won a slight reprieve.

U.S. District Judge Walker Miller postponed her sentencing for insider trading until July 28, reported the Associated Press, but refused the government’s request to delay the matter until the end of the year.

According to the wire service, U.S. Attorney Bill Leone sought additional time because Szeliga is cooperating in his insider-trading case against Joseph Nacchio. The former Qwest chief executive officer has pleaded not guilty to 42 counts of insider trading, based on his sale of more than $100 million in stock; his case does not yet have a trial date.

Last July, Szeliga pleaded guilty to one count of insider trading stemming from Qwest’s accounting scandal. According to the AP, she admitted to selling 10,000 shares of stock in 2001 for a net profit of $125,000 after learning from nonpublic information that some business units would miss revenue targets and that nonrecurring revenue was improperly used to meet those goals.

The former CFO faces up to 10 years in prison and a $1 million fine. Under her plea deal, however, Szeliga could receive a reduced prison term if her cooperation is deemed to be substantial, according to the AP. Sentencing guidelines recommend a term of 15 to 21 months, added the wire service.

In 2004, Qwest agreed to pay a civil penalty of $250 million to settle charges by the Securities and Exchange Commission that between 1999 and 2002, it fraudulently recognized more than $3.8 billion in revenue and excluded $231 million in expenses as part of a scheme to meet revenue and earnings projections.

Earlier this week, New York State comptroller Alan Hevesi filed a securities fraud lawsuit against Qwest Communications, several former executives and directors, and onetime auditor Arthur Andersen, alleging that they conspired to inflate the company’s results artificially.