Thursday, February 26, 2009

Nacchio headed to jail...finally (hopefully)

Former Qwest chief executive Joe Nacchio soon may be known as inmate number 33973-013.
An appeals court on Wednesday affirmed his insider-trading conviction, revoked his bond and ordered him to begin serving his six-year prison term.

"What they're saying is you need to start your sentence right now," said former federal prosecutor Rick Kornfeld.

Nacchio, 59, already is registered in the federal prison system. He requested placement in a Pennsylvania correctional facility, but the U.S. Bureau of Prisons hasn't said whether that's where he's going.

Nacchio, a New Jersey resident, is free on $2 million bond. He ran Denver- based Qwest at the height of the technology bubble in the late 1990s and made millions after the upstart company acquired phone giant U S West.

Nacchio's attorney, Maureen Mahoney, said the 10th Circuit ruling is at odds with decisions of other appeals courts across the country.

"We are optimistic that the Supreme Court of the United States will review the case," she said in a statement.

One former federal prosecutor said, however, that a review by the Supreme Court was unlikely.
"An evidentiary ruling by the trial court that's upheld by the court of appeals on whether or not to allow an expert to testify, I would be surprised if that's something the Supreme Court would (review)," said Tony Leffert.

Nacchio has 90 days to petition for a review and could get a 60-day extension. The court reviews less than 1 percent of cases submitted. Nacchio can also ask for an emergency stay of his sentence, but those are rarely granted.

David Gaouette, acting U.S. attorney for Colorado, said the ruling "reaffirms what the government has believed from the beginning, that the jury verdict finding Mr. Nacchio guilty was indeed correct."

Many retirees and Qwest employees lost millions in retirement holdings as the company's stock tanked in the two years after the U S West buyout. Rank-and-file employees were not allowed to trade company stock held in pension funds. During that time, however, Nacchio and his executive team were aggressively selling stock and reaping millions.

He was indicted on 42 counts of illegal insider trading in December 2005. The indictment accused Nacchio of accelerating his sale of company stock in 2001 when he had nonpublic information that Qwest's financial condition was deteriorating.

After a month-long trial, Nacchio was convicted on 19 counts and acquitted on 23 counts in April 2007. In addition to the prison sentence, he was ordered to pay $19 million in fines and forfeit $52 million in ill-gotten gains.

I doubt also that the supreme court will hear this case, but if they do, I hope they come to the same conclusion and an example is made out of this scumbag. His arrogance is disgusting. I worked on some of the SEC investigation and heard him testify in front of congress. He is one cocky thief, who has convinced himself that what he did was justified, and millions of employees lost their hard earned life savings while this useless son-of-a-bitch got rich. This is where I think an eye for an eye justice system is best served, rather than a piddly little prison sentence. Let's do like they did with Mussolini...hang this bastard in the square! I know what he and his fellow criminals did was not on the scale of Worldcom or Enron, but they all happened around the same time, and this one was very close to home.

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