duped, Nacchio says
Experts call the filing by the former Qwest CEO "an attempt
to put the prosecution on trial."
By Greg Griffin, Staff Writer
Tuesday, May 2, 2006
Former Qwest chief executive Joe Nacchio accused prosecutors
Monday of misleading grand jurors when the government sought
an indictment against him last year.
In a court filing seeking dismissal of 42 counts of criminal
insider trading, Nacchio's lawyers accused U.S. Attorney
Bill Leone and his team of "prosecutorial misconduct in the
Leone's spokesman, Jeff Dorschner, called the allegations
The filing was an effort to "put the prosecution on trial,"
said Tony Leffert, a former federal prosecutor now with
Denver-based Robinson, Waters & O'Dorisio.
The allegation is serious but not unusual for a
high-profile, high-stakes case, he said. Leffert and
another former prosecutor said the filing did not appear to
support the allegation of misconduct.
The grand jury indicted Nacchio on Dec. 19 on charges that
he sold more than $100 million in Qwest shares from January
to May 2001 while hiding from the public the company's dire
Nacchio, free on $2 million bond, denies the charges.
After he left the company in 2002, Qwest restated its
earnings by $2.5 billion.
In their new filing, Nacchio's attorneys allege that during
grand-jury proceedings late last year, prosecutors were
rushing to beat a five-year statute of limitations for
charges on his early-2001 trades.
Scrambling to secure an indictment, prosecutors
"deliberately blurred the line" between federal law on
insider trading and Qwest's internal policy, they said.
Qwest's policy prohibited employees from selling stock while
in possession of material, nonpublic information, according
to the filing. Criminal and civil statues "instead require
proof that the employees actually 'use' such information in
effecting trades," it said.
The filing contains excerpts of grand-jury deliberations in
which Leone appears to refer to the law and the policy
Nacchio's lawyers said Leone "failed to advise the grand
jury that the Qwest internal policy was not a surrogate for
the standards established by federal criminal or securities
"This effort to substitute a lesser standard succeeded,"
they said, pointing to questions from grand jurors confused
over whether an executive could ever sell stock legally.
Nacchio's defense team, which has received portions of the
testimony, is seeking additional transcripts to support the
But Holland & Hart attorney Greg Goldberg, a former federal
prosecutor, said Nacchio will probably have a hard time
convincing the judge.
Nacchio's "argument really boils down to a claim that the
government ... misinstructed the grand jury," he said.
"Courts generally ignore errors that are harmless ... and
require much, much more before dismissing an indictment."
Staff writer Greg
Griffin can be reached at 303-820-1241 or