And if I recall correctly their ex-CEO is now in jail on allegedly trumped up charges.

If true this is utterly despicable by the government. Alas, I'm not surprised.

he was recently released.

Is insider trading a trumped-up charge? I didn't hear the internet outrage about Enron's CFO being indicted for the same charge.

If I recall right, the reason it was considered insider trading was that he had published numbers expecting a contract from the government. When he chose to stand up for principles, the contact never landed, which made those predictions false.

I'd appreciate a clearer explanation of this, but last time I read about it, it really did seem like the loss of the contract was out of revenge, and that his prosecution would never have happened had he caved to the requests which he felt were unconscionable.

The problem is he dumped the stock after it became clear (to him) they weren't getting the contracts, but before he told anyone else.

Insider trading by itself is not a trumped up charge - probably none of the charges possible by the US Code are by itself. What makes it trumped up is the particular circumstance - the details of the case. And the details look definitely very fishy.

Didn't they die after that due to the government canceling contracts with them?

They've been merged into CenturyLink, but I doubt that's because of losing some government contracts. Those would be a drop in the bucket for an ILEC. USA telco consolidation is inexorable, for anti-consumer reasons. Actually it's only a matter of time before VZN acquires CenturyLink and then spins its less profitable/deadwood pieces back out to private equity firms. Much money will be made by executives, and much wailing to PUCs will be heard when service craters.