Federal prosecutors arrested three men, including a former telecommunications executive, in connection with the misappropriation of $2 million from cable and telephone provider SureWest Communications.
The U.S. Attorney for the Eastern District of California in Sacramento has charged Jeffrey Wells, SureWest’s former senior treasury analyst; his father, Larry Wells; and their associate, Henry Kaiser.
According to prosecutors, the senior Wells and Kaiser owned a venture-capital firm called Quivira Ventures. Jeffrey Wells allegedly transferred SureWest funds into his father’s company, purportedly to be used to attract new clients by demonstrating that Quivira was well-funded.
The trio allegedly transferred up to $25 million, returning it to SureWest each time to avoid detection by auditors. But late last year, the venture was only able to return $23 million.
If convicted, each man could be sentenced to 35 years in prison.
The arrests were announced Feb. 6. On Feb. 9, SureWest filed a civil action in Placer County Superior Court to recover the $2 million, plus punitive and compensatory damages.
In other SureWest news, the company has launched video service utilizing its copper telephony plant in Roseville, Calif.
The telco is using Internet-protocol-video over asymmetrical-digital-subscriber-line technology. The infrastructure will enable the company to deliver Internet and phone services, as well as 260 channels of video programming.
SureWest already delivers service over fiber-to-the-home plant it acquired in Sacramento, Calif. The copper application will enable it to deliver bundled services in the rest of its 83-square-mile telephony territory.
The company also received a franchise to expand its fiber cable network into Lincoln, Calif.