Former Qwest CEO Nacchio awaits resentencing
By Andy Vuong
June 21 2010
What that sentence will be is anybody's guess.
Nacchio attorney Sean Berkowitz contends it should be less than three years and five months. The government argues federal guidelines allow for a sentence of as long as 12 years and seven months.
U.S. District Judge Marcia Krieger has set aside three days, Tuesday through Thursday, to resolve the matter.
A federal appeals panel last summer granted Nacchio a new sentence, ruling that trial judge Edward Nottingham miscalculated how much Nacchio gained from illegally selling Qwest stock based on nonpublic information that the company was faltering financially.
The amount of money a defendant gains from a crime is a key
sentencing factor in securities cases.
An analysis by government expert Anjan Thakor, a finance
"It is believed the hearing will last all day Tuesday and all
day Wednesday, with the sentencing taking place on Thursday,"
said Jeff Dorschner, a spokesman for the
Under federal sentencing guidelines, the amount of gain and factors including the type of crime determine the range of the prison term a judge should impose. The guidelines are advisory, not mandatory. But a judge must state reasons for imposing a sentence outside the range.
Nacchio's initial sentence was based on 2000 sentencing guidelines because his illegal stock sales occurred in 2001. The government contends Krieger should use 2006 guidelines, which are harsher.
In a court filing pushing for a lighter sentence, Berkowitz portrays Nacchio as a charitable family man who has already suffered enough.
"He has lost his career, his livelihood, his reputation, and his freedom," the filing states. "His life has already been forever changed."
The government claims a harsher sentence is warranted because Nacchio's actions "reflect substantial greed" and the offense "is far more aggravated" because of his leadership position at Qwest. Nacchio and his wife had a combined net worth of $421 million in April 2001, around the time of the illegal stock sales, according to a court filing.
In addition to the prison term, Nacchio was ordered to pay $19 million in fines and forfeit $52 million — the gross amount of his stock sales.
Berkowitz says the fine should be $3.6 million or less and his fine and forfeiture combined should be no more than twice what Krieger determines to be the gain amount. The government says Nacchio should pay $19 million in fines and $44 million in forfeitures.
Nacchio, who turns 61 Tuesday and is serving time at a federal prison camp in Minersville, Pa., will not attend the re-sentencing hearings, which will be in U.S. District Court in Denver.