NEW YORK — New York State Comptroller Alan Hevesi is suing Qwest Communications International Inc. and Arthur Andersen LLP on behalf of the state's retirement fund, saying the company fraudulently overstated its revenues for three years.

The shareholder lawsuit filed in U.S. District Court late Tuesday on behalf of New York State Common Retirement Fund sought unspecified damages for the overstatement of Qwest's growth, revenues and earnings between March 31, 1999, and July 29, 2002.

The lawsuit said the company entered into transactions with little or no legitimate business purpose and engaged in improper accounting practices, leading to public reports that were inaccurate, false and misleading.

"We don't comment on pending litigation," Qwest spokesman Bob Toevs said Wednesday.

The lawsuit also accused the Arthur Andersen accounting firm of giving "substantial assistance" to a conspiracy to misrepresent Qwest's true financial condition by making false statements or failing to disclose damaging information.

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The new lawsuit came as a court in Denver considers a $400 million proposed settlement of shareholder lawsuits stemming from an accounting scandal at Qwest.

The suits were filed in wake of the scandal, which forced the Denver-based phone company to restate billions of dollars in revenue.

The tentative $400 million settlement announced in November would resolve many claims against the company, some former executives and most of its board of directors.

Government officials have said Qwest booked revenue from one-time sales of equipment and fiber-optic swaps while falsely claiming to investors that the income was recurring. Qwest later restated earnings from 2000 and 2001 to erase about $2.2 billion in revenue.

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