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Prosecutors push Nacchio to forfeit $52 million
By Jeff Smith
Rocky Mountain News
Thursday, July 19, 2007

Prosecutors have reiterated that former Qwest CEO Joe Nacchio should be ordered to forfeit $52 million as punishment for his conviction on 19 counts of insider trading.  The filing by prosecutors Tuesday came in response to an argument by Nacchio's attorneys that he should forfeit only $1.8 million from his $52 million of sales in April and May 2001.

Nacchio's team, with the help of a financial analyst, subtracted stock-option costs, broker fees, taxes and stock profits that weren't connected to Nacchio's possessing inside information, his team has argued.

The issue will be one of those taken up by U.S. District Judge Edward Nottingham at Nacchio's sentencing July 27.

Prosecutors also are recommending a prison sentence of seven years and a fine of $19 million - $1 million for each of the stock sales.

Prosecutors wrote that Nacchio's attorneys are viewing forfeiture from the more narrow civil view of turning over gains from "unjust enrichment."

"Contrary to defendant's assertions, it is well established that the primary purpose of criminal forfeiture is punishment," they wrote.

Prosecutors added that Nacchio's position would make it easy for criminal defendants to avoid forfeiting any money.

"Defendant's position is that the forfeitable proceeds include only the amount that the defendant personally obtained from the offense at the end of the transaction," prosecutors asserted in the filing in U.S. District Court in Denver.

"A defendant thus could wire the proceeds of a crime directly to a third party - his wife, his favorite team or charity" - and declare zero proceeds.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5635227,00.html