A former Qwest Communications International Inc executive on Wednesday pleaded guilty to wire fraud in a deal with prosecutors and may be used as a witness against ex-chief executive Joseph Nacchio, who is accused of insider trading.
By entering a guilty plea, former Qwest executive vice president Marc Weisberg, 48, avoided a five-week trial that had been set to start on Tuesday.
Weisberg is among seven former Qwest executives charged criminally since 2003 as part of a three-year probe by federal prosecutors in Denver. The probe led to the indictment last week of Nacchio for insider trading.
Weisberg entered his plea in US District Court as part of a plea bargain in which he agreed to cooperate with prosecutors and may serve as a witness in the case involving his former boss, Nacchio, who pleaded innocent. Nacchio is the only former Qwest executive left to go on trial.
Neither US Attorney Bill Leone or Weisberg attorney Gary Lozow would say specifically whether Weisberg was helping prosecutors in their case against Nacchio.
Denver defence attorney and legal analyst Scott Robinson said prosecutors' recommendation for a lenient penalty for Weisberg indicates that he is going to help them.
"It appears Marc Weisberg has converted himself from a defendant into a witness against Joe Nacchio," Robinson told Reuters. "To prove insider trading, you need an insider like Weisberg," he said.
Weisberg, who is to be sentenced March 3, faces a maximum of five years in prison and a $250,000 fine. But prosecutors agreed to recommend he serve no prison time in exchange for his co-operation.
As part of the plea deal, prosecutors recommended Weisberg serve 60 days in home detention and pay the $250,000 fine.
US District Judge Robert Blackburn told Weisberg in Wednesday's court proceeding he will be able to withdraw his plea if the judge does not accept the penalty recommendation.
Blackburn asked Weisberg if he did the things the plea agreement described as his crime. "I did, your honour," Weisberg replied.
A February 17 indictment of Weisberg accused him of abusing his position by obtaining investment opportunities in technology companies for himself at the peak of the boom in those stocks starting in 1999.
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