Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Former Qwest exec pleads guilty

 (The Spokesman-Review)
Associated Press

DENVER — Former Qwest Communications International Inc. executive Thomas Hall pleaded guilty Thursday to a single misdemeanor count of falsifying documents, ending the first criminal case stemming from a federal investigation of the company.

In exchange, prosecutors dropped three counts of wire fraud and one count of securities fraud. Hall, who also agreed to cooperate with investigators who are still looking into Qwest, faces up to a year in prison and a fine of up to $100,000.

Sentencing was scheduled for Jan. 14.

Prosecutors are not seeking restitution but U.S. District Judge Robert Blackburn could require it.

“These investigations are a marathon, not a sprint, and I think we’re making good progress,” Assistant U.S. Attorney William Leone said after the hearing. “Given the magnitude of shareholder losses, we need to be thorough, fair and deliberate.”

Hall declined comment to reporters outside the courtroom.

He was accused of participating in a scheme to improperly inflate Qwest revenues by $34 million when he was a senior vice president in the company’s global business unit.

A jury deadlocked on a broader set of fraud charges against him in April after a seven-week trial.

In 2002, the Securities and Exchange Commission and Justice Department began investigating allegations that Qwest inflated revenue through fraudulent transactions with the Arizona public school system and with other telecommunications companies.

Hall and three other former executives were charged with criminal fraud and conspiracy. Two of the executives, John Walker and Bryan Treadway, were acquitted. Grant Graham pleaded guilty in May to being an accessory after the fact to wire fraud with reckless indifference. He has not been sentenced.

The four were accused of conspiring to inflate Qwest revenue through the sale of computer equipment to link Arizona schools to the Internet as part of a $100 million deal in 2001. Each faced 11 charges that could have resulted in decades in prison.

The investigations ultimately led the company to erase $2.5 billion in revenue and prompted former CEO Joseph Nacchio to quit in 2002.

Nacchio has denied wrongdoing.