Nacchio files motion for bail
Ex-Qwest CEO seeks freedom during appeal; sentencing hearing
By Andy Vuong, Staff Writer
Tuesday, July 24, 2007
Attorneys for former Qwest chief executive Joe Nacchio on Monday
filed a motion for bail pending appeal, disclosing that they
will raise at least four issues as part of efforts to get his
illegal insider-trading conviction overturned.
The request was filed hours after a federal judge ruled the
government will have 90 minutes to present "victim" testimony at
Nacchio's sentencing hearing Friday. In the order, U.S. District
Judge Edward Nottingham rejected the government's "expansive
definition" of who can be considered a victim, making it tougher
for prosecutors to find victims to testify.
If Nottingham grants the request for bail pending appeal,
Nacchio would remain free during a process that could take one
to two years. "The government will oppose it," said Jeff
Dorschner, a spokesman for the U.S. attorney's office in
Nacchio, 58, would probably have to report to prison within one
to two months if his sentence includes a prison term and
Nottingham denies the request for bail pending appeal. Approval
of such requests is rare, experts say, though judges have
granted them to several high-profile white-collar defendants in
The four issues Nacchio's attorneys say they plan to raise
during the appeal are:
- Nottingham's jury instructions on materiality, intent and
- Nottingham's decision to exclude defense expert testimony
from professor Daniel Fischel.
- Their belief that evidence presented during trial was
insufficient to convict Nacchio.
- Nottingham's rulings related to Nacchio's
In pretrial filings, Nacchio's attorneys contended that he had
information that led him to believe Qwest was in line to receive
top-secret government contracts, boosting his outlook on the
Through a series of rulings on the matter, Nottingham
"effectively deprived (Nacchio) of the opportunity to provide
the jury with information that bore directly on his good faith
and could have led to an acquittal," Nacchio's attorneys wrote
in Monday's 59-page filing.
A notice of appeal has to be filed within 10 days of sentencing.
After a month-long trial, Nacchio was convicted in April on 19
counts of illegal insider trading connected to his sale of $52
million in Qwest stock from April 26, 2001, to May 29, 2001.
Jurors said it was clear Nacchio had material nonpublic
information that Qwest was struggling when he made those sales.
They acquitted him on 23 other counts connected to earlier
Prosecutors want Nacchio to serve seven years and three months
in prison, pay $19 million in fines and forfeit the $52 million
in ill-gotten gains.
The forfeited money would be distributed to victims of the
crime, Dorschner said.
Nacchio's attorneys have asked for leniency because of his
"prior good works" and the impact a long prison sentence could
have on the health of two family members, including his oldest
son, David Nacchio.
It was disclosed during trial that David Nacchio's suicide
attempt nearly pushed his father to resign as Qwest CEO in early
2001. Defense attorneys argued that Nacchio could not have been
plotting to commit a crime while dealing with such an emotional
In Monday's order, Nottingham ruled that any person who bought
Qwest shares when Nacchio illegally sold the stock in April and
May 2001 could be considered a victim, as long as they suffered
a financial loss as a result of the purchase.
Prosecutors wanted the victim definition to include Denver-based
Qwest and its existing shareholders. They said in a filing last
month that identifying individual shareholders could be
"complicated by the fact that many, if not most, Qwest shares
would be held in 'street name' - i.e., the brokerage firm would
hold the investor's securities in its name."
Prosecutors added that "contacting the actual investors for all
of the trades at issue ... would be extraordinarily expensive."
Dorschner declined to comment when asked if prosecutors have any
victims lined up.
Nottingham said it is "up to the government to identify victims,
to notify them and to coordinate their appearance in court." The
U.S. attorney's office has posted a message on its website
Also Monday, Nacchio's attorneys said in a separate filing that
the government does not have the right to David Nacchio's
medical records if his psychiatrist does not testify at the
Prosecutors want access to the records to respond to Joe
Nacchio's contention that a long prison sentence could affect
his son's health.
The defense said that being separated from his father could have
a "potentially catastrophic effect" on David Nacchio.
Nacchio was Qwest's chief executive from 1997 to June 2002.
Staff writer Andy Vuong can be reached at 303-954-1209 or