AUSWR
The Association of U S West Retirees
 

 

 

Ex-Qwest Chief Nacchio Appeals Prison Sentence Ruling

 

San Francisco Chronicle

By Michael Hytha and Joe Schneider

July 7, 2010

 

July 7 (Bloomberg) -- Joseph Nacchio, the former chief of Qwest Communications International Inc. convicted of insider trading, appealed the 70-month prison sentence that reduced his original term by two months.

U.S. District Judge Marcia Krieger in Denver issued the ruling last month after a federal appeals court ordered that Nacchio be resentenced because a trial judge incorrectly calculated his gains from stock sales. He has served almost 15 months in prison.

Nacchio, 61, of Rumson, New Jersey, was convicted in 2007 for illegally selling $52 million of stock in Denver-based Qwest in 2001 based on inside information. In her resentencing ruling, Krieger upheld a $19 million fine -- the maximum Nacchio faced -- and approved forfeiture of $44.6 million, a figure that Nacchio and the government had agreed on.

In hearings last month, Nacchio's lawyer, Sean Berkowitz, suggested that a sentence of 3 1/2 to 4 1/2 years would be adequate. He objected to the $19 million fine, saying "something in the several million dollar category" would be enough. Berkowitz declined to comment today on Nacchio's appeal.

The U.S. argued Nacchio's illegal gains came to more than $32 million, warranting the $19 million fine and a prison sentence ranging from five years and three months to 6 1/2 years.

Krieger, who didn't preside over the original trial, heard from experts for the government and Nacchio who performed "event studies" intended to determine the amount Nacchio made from inside information by measuring how investors reacted to certain disclosures on particular days.

Jeffrey Dorschner, a spokesman for the U.S. Attorney's office in Denver, declined to comment.

The case is U.S. v. Nacchio, 1:05-cr-00545, U.S. District Court, District of Colorado (Denver).

--Editors: Michael Hytha, Joe Schneider.



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