Victims of Qwest fraud to share in forfeited $44 million
By Howard PankratzMay 3, 2012
The U.S. Justice Department announced today that it has returned approximately $44 million to victims of the securities fraud scheme that rocked Qwest Communications International and led to the conviction of its former chief executive Joseph P. Nacchio.
The $44 million in funds were forfeited as a result of Nacchio's 2007 federal conviction for securities fraud.
The return of the money was announced by John F. Walsh, U.S. Attorney for Colorado; Denver FBI agent in charge James F. Yacone, and Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division.
Between 1999 and 2002, Nacchio publicly announced unrealistic revenue projections for Qwest and then caused Qwest to issue false and misleading statements to the public about the company's financial condition, said the Justice Department.
After the irregularities were discovered, Qwest stock, which had traded as high as $60 per share, plummeted to about $1 per share.
Following his conviction, Nacchio was sentenced to 70 months in prison and was ordered to forfeit $44 million in funds, the net proceeds from the fraud scheme, said prosecutors. Nacchio was also ordered to pay a $19 million fine that went into a fund for crime victims.
"I am pleased that we were able to recover more than $44 million in criminal proceeds and return it to innocent Qwest investors," said Walsh.
Yacone, the FBI special agent in charge in Denver, said that a priority of the FBI is not only protecting financial markets, but seizing "ill-gotten gains.
"We are hopeful the money being returned will remedy some of the damage caused by Nacchio," said Yacone.
Assistant Attorney General Breuer said that the return of the money is fulfilling a central objective of the Criminal Division's Victim Asset Recovery Program by returning those funds to Nacchio's victims.
The criminal case against Nacchio was
prosecuted by the
The case was investigated by the FBI.
The distribution of funds to victims was overseen and authorized by the Department of Justice's Victim Asset Recovery Program.
Persons with questions about the Qwest distribution should contact the Remission Administrator at 1-877-268-3001, or visit the website at www.gilardi.com/qwestremission.
$44 million ~ Gains forfeited by Joe Nacchio that are now being returned to victims
112,210 ~ Number of people who will share in the funds
$44.23 ~ Amount of money that one recipient, Tom, got
$12,000 ~ Tom's estimated stock losses
70 ~ Number of months Nacchio was sentenced to prison
Howard Pankratz: 303-954-1939 or email@example.com
Former Qwest chief executive Joe Nacchio, pictured leaving federal court in
was convicted on 19 counts of insider trading. (Helen H. Richardson,