Free Motion for Disbursement of Funds - District Court of Colorado - Colorado

Case 1:04-cv-01267-WYD

Document 72

Filed 06/11/2008

Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-01267-WYD-MJW

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. AUGUSTINE M. CRUCIOTTI, Defendant. ______________________________________________________________________________ UNOPPOSED MOTION TO DISBURSE FUNDS TO PAY TAX ______________________________________________________________________________

The Securities and Exchange Commission respectfully requests that the Court enter an Order for the Distribution Agent to disburse funds to pay certain tax obligations in this case. 1. The Commission has filed six settled actions in this District Court arising from the

Commission's financial fraud investigation of Qwest Communications International Inc. ("Qwest") that have resulted in funds being deposited in a Fair Fund pursuant to Section 308 of the Sarbanes-Oxley Act of 2002 for future distribution to aggrieved investors (the "Distribution Fund"). The defendants paid all amounts in the Distribution Fund to the Clerk of the Court, who then deposited the funds with the Court Registry Investment System ("CRIS") in an interest bearing account. 2. The settled actions include the following: SEC v. Cruciotti, Civil Action No. 04-D-1267

(MJW)(Cruciotti paid $200,000 in disgorgement plus prejudgment interest and $150,000 in civil

Case 1:04-cv-01267-WYD

Document 72

Filed 06/11/2008

Page 2 of 3

penalties); SEC v. Qwest, Civil Action No. 04-02179-WYD (Qwest paid $1 in disgorgement and $250,000,000 in civil penalties); SEC v. Hoaglund, Civil Action No. 05-00482-OES (Hoaglund paid $200,000 in disgorgement plus prejudgment interest and $100,000 in civil penalties); SEC v. William L. Eveleth, Civil Action No. 05-00481-RPM (Eveleth paid $35,575 in disgorgement plus prejudgment interest and $75,000 in civil penalties); and SEC v Joseph P. Nacchio, et al., Civil Action No. 05-00480-MSK (Gregory M. Casey paid $1,390,344 in disgorgement plus prejudgment interest and $250,000 in civil penalties; and Robin R. Szeliga paid $327,052 in disgorgement plus prejudgment interest and $250,000 in civil penalties). 3. In addition, Robin Szeliga, Qwest's former chief financial officer, pled guilty to one

felony count of insider trading relating to her role in the Qwest fraud and was sentenced in July 2006. U.S. v. Szeliga, 05-CR-234 (D. Colo.) As a result, Szeliga paid $125,000 in restitution and $5,547.67 in prejudgment interest into the Distribution Fund in October 2006. 4. By order dated June 8, 2005, the Court appointed Damasco & Associates to fulfill the tax

obligations of the Distribution Fund. Pursuant to that Order, the Tax Administrator is required to pay taxes in a manner consistent with treatment of the Distribution Fund as a Qualified Settlement Fund, and is to be compensated for the tax services provided. 5. By order dated February 28, 2006, the Court appointed Gilardi & Co., LLC as

Distribution Agent of the Distribution Fund and ordered the Distribution Fund transferred from the court CRIS account to an account controlled by Gilardi at Bank of the West, in the name of SEC v. Qwest Communications Settlement Fund, Account Number 756-013215. The Distribution Agent is required to pay taxes to the Tax Administrator as authorized by this Court.

2

Case 1:04-cv-01267-WYD

Document 72

Filed 06/11/2008

Page 3 of 3

6.

The Tax Administrator has determined that the Distribution Fund owes $6,500 in

estimated tax liability for the second quarter of 2008. This tax payment is due June 16, 2008. The funds shall be distributed from the earnings of the Distribution Fund. See Declaration of Tax Administrator attached as Exhibit A. 7. The Declarations have been reviewed by the undersigned Commission counsel who has

no objections. 8. The Commission has provided copies of this Motion and proposed Order to counsel for

all defendants who have paid monies into the Distribution Fund. The Commission asked counsel for those defendants to communicate any objection to this Motion to the Commission's undersigned counsel. At the time of filing this Motion, counsel for the Commission has not received any objections to its request to pay taxes. WHEREFORE, for all the foregoing reasons, the Commission respectfully requests that this Court enter the attached proposed Order and grant such other relief as it deems just and proper. Dated: June 11, 2008 Respectfully submitted,

s/ Mary S. Brady Mary S. Brady Securities and Exchange Commission 1801 California Street, Suite 1500 Denver, CO 80202 Phone: (303) 844-1000 Fax: (303) 844-1010 E-mail: [email protected] Attorney for Plaintiff

3