A federal judge Wednesday put a two-month freeze on the civil fraud case against former Qwest chief executive Joe Nacchio and other former phone company executives to eliminate possible interference with a parallel criminal investigation.
Acting Denver U.S. Attorney William Leone on Tuesday had asked for a five-month freeze on the grounds that the competing demands of the two investigations – and all the lawyers involved – would undermine the criminal case against Nacchio.
But Magistrate Judge Craig Shaffer agreed to revisit the issue Sept. 30 to find ways to keep the civil cases against former Qwest execs moving ahead if possible.
In March, the Securities and Exchange Commission filed charges against Nacchio and six other former Qwest execs, alleging they orchestrated and personally benefited from $3 billion worth of fraud between 1999 and 2002.
The SEC has brokered plea agreements with various Qwest executives as it builds its case against Nacchio, who denies wrongdoing.
“At some point everybody’s self-interest is going to collide,” Shaffer said Wednesday. “I am trying to find a way to harmonize everyone’s competing interests.”
Leone also indicated in court Wednesday that he would seek to freeze an ongoing class-action lawsuit against Qwest in Denver federal court, as well as a related court case in California. Shaffer asked the lawyers representing the Qwest executives in the SEC case to submit a “confidential settlement memorandum” stating the strengths and weaknesses of their defense – and for what dollar amounts they would be willing to settle.
Staff writer Ross Wehner can be reached at 303-820-1503 or rwehner@denverpost.com.
