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
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
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.