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Nacchio civil case still on hold
Prosecutor stresses need for time to build criminal fraud case
By Jeff Smith, Rocky Mountain News
November 18, 2005


Colorado's top federal prosecutor reiterated this week the need for a freeze on the civil fraud case against former Qwest CEO Joe Nacchio and others while his criminal investigation continues.  But U.S. Attorney William Leone shed little light on how close he is to wrapping up the case.  In a filing Wednesday, Leone noted the court had previously determined the stay should continue until year-end, with the first hearing after that tentatively scheduled for Jan. 13, 2006.

"That date remains a logical and meaningful time to consider the issue," Leone wrote in response to a federal magistrate's request for a status report.  "The government cannot further comment on the status of its criminal investigation."

Sources have told the Rocky Mountain News that Leone is preparing to seek an indictment soon against Nacchio on insider trading charges.  Leone declined to comment about the criminal investigation when approached after a recent hearing.

Nacchio's longtime public relations spokeswoman Marcia Horowitz said this week that all calls are now being handled by Nacchio's New York attorney, Charles Stillman.  Stillman didn't return two phone calls this week but recently asserted his client's innocence.

"Mr. Nacchio has repeatedly denied any wrongdoing and will . . . fully assert his rights and defenses as Qwest's former CEO," Stillman said in a statement.

An insider trading guilty plea last summer by former Qwest Chief Financial Officer Robin Szeliga shows prosecutors are focusing on Nacchio's nearly $50 million of stock sales in April and May 2001.

In her plea agreement, Szeliga said she and other unnamed "senior Qwest executives" knew by at least April 24, 2001, that Qwest was meeting its revenue targets only through "gap fillers" such as questionable one-time sales of network capacity.  But management withheld that information, Szeliga said.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4248139,00.html