2 Former Qwest Executives Acquitted

A federal jury in Denver acquitted two former executives of Qwest Communications International Inc. on Friday of charges that they improperly booked nearly $34 million in revenue and then lied to auditors and the FBI about it. The jury issued a partial acquittal for a third executive and deadlocked in the case against a fourth.

Thomas Hall, Grant Graham, John Walker and Bryan Treadway were accused of improperly booking revenue as part of a $100-million deal in 2001 to link Arizona schools to the Internet.

Prosecutors say the four conspired to declare the revenue before the purchases were made and then lied to accountants and investigators about what they had done.

The jury, which began deliberations nearly two weeks ago, cleared Walker and Treadway of all charges. Graham, a former chief financial officer of Qwest’s global business unit, was acquitted of three charges, and the jury deadlocked on eight remaining charges.

The jury could not reach a unanimous verdict on any of the 11 charges against Hall, a former senior vice president of the global business unit.

Prosecutors did not immediately say whether they would seek to retry Graham and Hall.

It is the first criminal trial stemming from investigations that prompted Joseph Nacchio, Qwest’s former chief executive, to quit in 2002 and ultimately led the Denver-based telecommunications giant to remove $2.5 billion in revenue from its books.

Each defendant faced 11 charges, including fraud and conspiracy, and could have spent up to 10 years in prison on each count if convicted.

Qwest provides telephone services in 14 states in the West and Midwest.

The jury had earlier asked U.S. District Judge Robert Blackburn for guidance on what constituted criminal intent.

Earlier this week, the jury told Blackburn they had reached unanimous verdicts on 24 of the 44 charges.