Four former executives of Qwest Communications were indicted for fraud, Attorney General John Ashcroft announced Tuesday.
The four were indicted on 12 counts by a federal grand jury in Denver. They are accused of devising a scheme to create more than $33 million in revenue by wrongly reporting a purchase order with the Arizona School Facilities Board, in violation of Security and Exchange Commission rules.
The government says Qwest sold equipment including materials to create Internet access to the statewide school computer network, billed the customer and held the merchandise for later delivery. In violation of SEC rules, they booked the revenue before the merchandise was delivered.
The company also knowingly filed false documents to hide its actions, the Justice Department said.
As we continue our efforts to battle corporate fraud, our message is clear. We will protect the integrity of our markets by punishing those who falsify financial information out of sheer greed," Ashcroft said in a statement.
Arrest warrants were issued for Grant Graham of Evergreen, Colo., chief financial officer for Qwest's global business unit; Thomas Hall of Englewood, Colo., a senior vice president in the global business unit; John Walker of Littleton, Colo., a vice president in the unit; and Bryan Treadway of Atlanta, an assistant controller.