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Nacchio charges case against him tainted by prosecutors' deceptions
By Jeff Smith
Rocky Mountain News
Tuesday, May 2, 2006

Government prosecutors engaged in "pervasive misconduct" that improperly influenced a federal grand jury's decision last December to indict former Qwest Chief Executive Joe Nacchio on insider trading, Nacchio's attorneys alleged Monday.  The court filings, which included snippets from the grand jury proceedings, reiterate previous requests that the criminal case against Nacchio be dismissed.

But while a previous motion attacked the indictment as vague and constitutionally flawed, the new filings charge government prosecutors deliberately blurred the difference between a corporate policy and criminal conduct, and ignored Supreme Court rulings that insider trading required intent to deceive.

The filings also confirm that form Qwest President Afshin Mohebbi and former chief legal officer Drake Tempest both testified to the grand jury.

Jeff Dorschner, spokesman for the U.S. attorney's office in Colorado, said the allegations about misconduct by the prosecution "are unfounded and the government will respond in due course."

Nacchio is charged with illegally selling $100 million of Qwest stock in the first five months of 2001 based on nonpublic information.

Experts previously have said motions to dismiss are routine but that a judge is likely to allow the case to proceed to trial.

Federal Judge Edward Nottingham already has cited case law that it's up to a jury to decide whether certain information possessed by Nacchio should have been disclosed to investors.

Nacchio's attorneys asserted that only six witnesses testified in front of the grand jury and that the government hurried through a short presentation to secure an indictment just 13 days before the five-year statute of limitations expired.

Defense attorneys also argue none of Nacchio's stock sales were made in Colorado and challenge the government to prove the venue of the case is correct.

http://www.rockymountainnews.com/drmn/other_business/article/0,2777,DRMN_23916_4665923,00.html