The US Securities and Exchange Commission (SEC) is suing former Qwest Communications International chief executive Joseph Nacchio and 10 other former Qwest executives, accusing them of defrauding investors.
The SEC has already settled with four of the executives named in the lawsuit. The SEC accuses the Qwest management team of filing false financial statements between April 1999 and March 2002.
It claims a scam allowed the phone company to fraudulently report around $3bn (£1.66bn) of revenue and also helped along the company's 2000 merger with US West.
Nacchio is joined in the ongoing legal action by two former chief financial officers and a former chief operating officer.
The SEC alleges the "massive fraud" resulted directly from aggressive earnings and sales targets set by Nacchio and the two CFOs, "which were constantly touted to the investing public".
As a result of inaccurate accounting Qwest had to restate more than $2bn in sales for 2000 and 2001.
Qwest is now battling with Verizon to take over MCI, the company which emerged from the bankrupt WorldCom. Former WorldCom chief executive Bernie Ebbers has just been convicted for his own false accounting fraud at WorldCom.