Former Qwest executive Marc Weisberg pleaded guilty Wednesday to a felony count of wire fraud for self-serving financial deals, six days before the scheduled start of his criminal trial.
The plea agreement calls for Weisberg to cooperate with government prosecutors in other Qwest investigations, likely including the criminal indictment against former Qwest chief executive Joe Nacchio.
Weisberg, 48, had been charged with 11 felonies alleging that he secretly took $2.9 million worth of stock from Qwest vendors in exchange for funneling Qwest business to the vendors.
Weisberg was Qwest’s executive vice president of business development and reported directly to Nacchio. He was involved in some of Qwest’s biggest deals, including the US West merger and its investment in defunct European joint venture KPNQwest.
Although the guilty plea to wire fraud carries a maximum sentence of five years in prison, the plea agreement calls for Weisberg to serve two years of probation, including 60 days of home detention. He also will pay a fine of $250,000. Terms of the agreement are subject to approval by U.S. District Judge Robert Blackburn, who has the authority to either toughen or lighten the sentence. Weisberg will be sentenced March 3.
Seven other counts of wire fraud and three counts of money laundering were dismissed under the agreement.
Weisberg’s attorneys, Gary Lozow and Stephen Peters, said in a statement that criminal and civil charges against other Qwest executives left Weisberg at a legal disadvantage.
“In today’s atmosphere, there is simply too great a risk that a jury may be persuaded to paint Mr. Weisberg with the broad brush of alleged impropriety at Qwest,” the attorneys said.
Legal analysts characterized the plea agreement and proposed penalties as relatively lenient.
“The plea strikes me as being very light for someone as senior as Weisberg was and considering what the original charges were,” said Tony Leffert, a former Justice Department white-collar-crime prosecutor who now serves as a trial lawyer in the Denver firm Robinson Waters and O’Dorisio.
Leffert and other analysts said the lack of jail time and restitution could indicate either a fairly weak case against Weisberg or that prosecutors wanted to make sure they could gain Weisberg’s testimony against Nacchio.
Nacchio was charged Dec. 20 with 42 counts of illegal insider trading in a federal grand jury indictment alleging that he sold $100.8 million worth of Qwest stock in 2001 as he hid the company’s financial troubles.
Reaching a plea agreement in the Weisberg case shortly before the trial was expected to begin was no surprise to John Coffee, a white-collar-crime specialist and law professor at Columbia University.
“Lots of people will resist the government’s pressure until they get closer and closer to the courthouse steps,” he said. “I’m not saying (Weisberg) should have been convicted, but I’d describe it as a fairly soft plea bargain, a good deal more lenient than we’re seeing in many other white-collar criminal cases.”
Coffee said the fact that Weisberg will be sentenced before his possible testimony in the Nacchio case suggests that prosecutors may not view the testimony as crucial to convicting Nacchio.
“Generally, prosecutors want you awaiting your sentencing until you’ve offered your testimony,” Coffee said.
Qwest officials declined to comment on the Weisberg plea bargain.
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
