Nacchio's next stop: Sentencing
Former Qwest CEO Nacchio returns to court in a week to learn his
By Andy Vuong, Staff Writer
Friday, July 20, 2007
Former Qwest chief executive Joe Nacchio returns to Denver
federal court a week from today for sentencing on his April
conviction on 19 counts of illegal insider trading.
Issues that will be addressed by U.S. District Judge Edward
Nottingham during the sentencing hearing include:
- Whether Nacchio gets a prison term and how much money he'll
be fined and ordered to forfeit. Based on federal sentencing
guidelines, prosecutors have recommended that Nacchio serve
seven years and three months. They also want him to pay $19
million in fines and forfeit $52 million connected to the
illegal stock sales.
- Whether Nacchio is granted bail pending appeal, which would
allow him to be free during a process that could take one to two
years. If denied, Nacchio would likely have to report to prison
about 45 days after sentencing.
- A recommendation on where Nacchio will serve prison time if
that is his sentence. Nacchio can tell the judge which prison he
would prefer, and Nottingham could make the recommendation to
the Federal Bureau of Prisons. The bureau will decide where to
send Nacchio, based on a number of factors such as a facility's
Nacchio, 58, has the right to make a statement to the judge
before his sentence is rendered. Legal experts expect him to
exercise that right.
"Sentencing is a potentially very advantageous time for the
defendant, particularly in a case like this, to humanize himself
to the court and try to engender some compassion on his own
behalf," former federal prosecutor Greg Goldberg said Thursday.
Denver lawyer and former federal prosecutor Rick Kornfeld said
it's "very important" for Nacchio to address the court.
"Courts in any case -- let alone large cases or cases involving
articulate, educated people -- want to hear from the defendant,"
Experts say judges typically look for two things during the
statement: acceptance of responsibility and remorse.
Both of those could be hard to squeeze out of Nacchio, who
firmly believes he is innocent, as indicated by his attorney's
proclamation shortly after the verdict that an appeal is
"The best thing to say is, 'Upon the advice of counsel, Your
Honor, I respect the American system of justice, I respect the
jury's verdict, but nonetheless I am going to exercise my right
to appeal. Thank you very much. Please take into consideration
all the good things I've done in my life,' " said Alan Ellis, a
San Francisco sentence-mitigation expert.
Nacchio's attorneys have already highlighted his charity work as
part of their presentencing request for a "downward departure"
on his sentence.
Nacchio's statement can help or hurt his sentence, though only
slightly, depending on what he says, according to experts.
"While judges certainly entertain the comments and may consider
them, the fundamental point that the judge looks for is
remorse," said Maryland lawyer and former federal prosecutor
Jacob Frenkel. "But at the end of the day, that's not likely to
be worth years off the sentence."
Family members and victims may also be allowed to make
Nacchio joined Qwest in 1997 and led the Denver
telecommunications company through tremendous growth before it
nearly crashed into bankruptcy at the end of his tenure in 2002
amid the tech downturn and news of questionable accounting.
Qwest later restated $2.5 billion in revenue booked from 2000 to
On April 19, after a month-long trial, he was convicted on 19
counts of illegal insider trading connected to his sale of $52
million in Qwest stock in April and May 2001. Jurors said it
was clear Nacchio had material nonpublic information that the
company was struggling financially while he made those sales.
They acquitted him on 23 counts connected to sales made before
Nacchio, who has been free on bail since his December 2005
indictment, is likely to request bail pending his appeal.
Kornfeld said it's unlikely Nacchio will be allowed to remain
free on bail during an appeal.
"What you're really saying is, 'Judge, I'm asking you to
Monday-morning quarterback yourself and to agree with me that
you screwed up,' " he said.
To grant bail pending appeal, Nottingham has to find that
Nacchio is not likely to flee, that he does not pose a danger to
the community and that his appeal raises a substantial question
of law or fact likely to result in a reversal of the verdict, a
new trial or a sentence that does not include prison.
"My guess is Judge Nottingham -- a super-talented, very
thoughtful judge who follows the law -- is not going to find
that one or more of those apply," said Goldberg, a partner at
Holland & Hart focusing on white-collar law.
Though it's rare, several recent high-profile white-collar
defendants were granted bail pending appeal, including former
WorldCom chief executive Bernie Ebbers and former Adelphia
Communications executives John and Timothy Rigas.
In the Adelphia case, the judge believed the defense raised a
novel issue about whether the prosecution should have been
required to call an expert witness to testify about accounting
principles. The Rigases' conviction on securities-fraud and
conspiracy charges was upheld in May, and they have been ordered
to report to prison in August.
An issue Nacchio may raise in his appeal is that
national-security concerns limited his defense. In pretrial
filings, Nacchio's attorneys contended that he was privy to
classified information that led him to believe Qwest was in line
to receive top-secret government contracts, boosting his outlook
on the company. Little of that defense was raised during trial.
Staff writer Andy Vuong can be reached at 303-954-1209 or