The U.S. Department of Justice issued a 12-count indictment charging four former executives of Qwest Communications with corporate accounting fraud. The indictment alleges that the defendants devised a scheme to falsely recognize more than $33 million of additional revenue for Q2 2001, when the company was experiencing weak sales. The case concerns a contract with the Arizona School Facilities Board to design and implement a statewide school computer network. Defendants include Grant Graham, the former CFO for Qwest’s Global Business Unit; Thomas Hall, a former Vice President in Qwest’s Government and Educational Solutions Group; John Walker, a former Vice President for Qwest’s Government and Educational Solutions Group; and Bryan Treadway, a former Assistant Controller at Qwest.
http://www.usdoj.gov
- In August 2002, the U.S. Attorney’s Office joined the Securities and Exchange Commission (SEC) in its investigation into Qwest Communications’ accounting policies, practices and procedures in 2000 and 2001, including revenue recognition and accounting of sales of optical capacity assets (Indefeasible Rights of Use or “IRUs�?) to customers from whom Qwest also agreed to purchase capacity.
In March 2002, the Securities and Exchange Commission (SEC) launched an investigation into Qwest’s accounting policies.