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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 conviction.

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

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5565148,00.html