Prosecutors, Nacchio in talks over $52 million forfeiture
By Jeff Smith
Rocky Mountain News
Friday, June 1, 2007
Prosecutors said Thursday they are "in the process" of reaching
an agreement in which former Qwest CEO Joe Nacchio would set
aside the $52 million he may be ordered to forfeit as a result
of his insider-trading conviction. The agreement would alleviate
some of the concerns the government has about Nacchio hiding the
money or his wife staking a claim to the money. In a document
filed last month, prosecutors alleged Nacchio transferred at
least $133 million and one of his New Jersey homes into his
wife's name and even considered getting a divorce so no one else
could get the cash.
The topic came up Thursday at a status hearing in U.S. District
Court in Denver.
Nacchio was convicted in April on 19 counts of insider trading
in connection with selling $52 million of Qwest stock in April
and May 2001.
Prosecutors argue Nacchio must forfeit the gross proceeds. The
defense is expected to argue otherwise.
Defense attorney Mark Rufolo said in the hearing Nacchio would
set aside the money, but prosecutor Kevin Traskos indicated
there still were concerns Nacchio's wife might claim she was
entitled to the funds.
Lead prosecutor Cliff Stricklin said after the hearing that
there's "not a signed deal," but the two sides were "in the
process of reaching an agreement" on the issue.
U.S. District Judge Edward Nottingham will make a decision on
forfeiture at Nacchio's sentencing July 27.
Nacchio is expected to be sentenced to roughly 10 years in
federal prison, and already has said he will appeal his
Also Thursday, Nottingham tentatively set aside three hours for
the July sentencing, after prosecutors indicated there likely
won't be statements by "victims," or people who bought stock at
the time Nacchio was making the illegal sales, and who later
suffered big losses.
Rufolo argued federal statute prohibits victim statements in
such a case. Testimony by Qwest investors also was restricted
during Nacchio's trial, with Nottingham striking from the record
the testimony by one Qwest retiree.
smithj@RockyMountainNews.com or 303-954-5155