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In Commission filings and other public statements, Nacchio, Woodruff, and Szeliga fraudulently characterized nonrecurring revenue from indefeasible rights of use (“IRUs”) and equipment transactions as recurring “data and Internet service revenues,” thereby masking Qwest’s declining financial condition and artificially inflating its stock price. Qwest used such nonrecurring revenue to fill the gap between actual and projected revenue. Over time, in fact, Qwest’s dependence on such one time transactions grew to the point that it was likened internally to an “addiction” and the nonrecurring IRU and equipment sale transactions were likened to “heroin.” Among other things, the Qwest executives’ misrepresentations about Qwest’s revenue sources allowed Qwest to maintain a stock price sufficiently high to complete its pending merger with US West, Inc..

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