Ex-Qwest Chief Gets 6-Year Sentence
By Dan Frosch
New York Times
Saturday, July 28, 2007
DENVER, July 27 — A federal judge on Friday sentenced Joseph P.
Nacchio, the former chief executive of
Qwest Communications International, to six years in prison
in what prosecutors called the largest insider-trading case in
The judge in the case, Edward W. Nottingham, also ordered Mr.
Nacchio to pay a fine of $19 million and forfeit $52 million he
earned from illegal stock sales in 2001. Mr. Nacchio was
convicted by a federal jury in April on 19 of 42 counts of
Judge Nottingham denied Mr. Nacchio’s request for bail pending
an appeal, and Mr. Nacchio will have to present himself within
15 days after the federal Bureau of Prisons determines where he
will serve his sentence, a process that can take up to 45 days.
At Mr. Nacchio’s request, Judge Nottingham has recommended that
the prison term be served at Schuylkill Federal Correctional
Institution in Minersville, Pa., which holds both minimum- and
Mr. Nacchio, 58, did not issue any comment after the sentencing,
and he and his family left the court in downtown Denver under
“This is what the criminal justice system is all about,” said
Troy A. Eid, the United States attorney for Colorado, after the
sentencing. “In an age of cynicism, justice can still prevail
and even inspire.”
Mr. Nacchio faced up to 10 years in prison on the
insider-trading conviction, which related to a period in 2001
when, according to prosecutors, Mr. Nacchio concealed the
mounting financial troubles of Qwest, a telephone service
provider in 14 Western and Midwestern states, while
simultaneously selling millions of dollars in stock. Mr. Nacchio
contended he had sold the stock only because the options were
scheduled to expire.
At the sentencing hearing, Mr. Nacchio’s lawyer, Herbert J.
Stern, pleaded for the judge to consider the well-being of Mr.
Nacchio’s son David, who has suffered from mental illness and
attempted suicide, leading Mr. Nacchio to consider stepping down
“He has a devastating family situation,” Mr. Stern said, as Mr.
Nacchio wiped his eyes.
But a federal prosecutor, Colleen Conry, argued that other
members of David Nacchio’s family could care for him. She said
that Mr. Nacchio did not decide to leave his post at Qwest after
his son’s suicide attempt.
“It didn’t matter enough to him then, and it shouldn’t matter to
the court now,” she said at the hearing.
Mr. Stern also said that Mr. Nacchio’s stock sales had not been
as lucrative as the government contended and that he should
consequently not have to pay such a large fine, an argument
Judge Nottingham rejected.
Before delivering the sentence, Judge Nottingham addressed Mr.
Nacchio extensively, praising his treatment of his family.
“They all rely on Uncle Joe to take care of them,” he said,
referring to letters sent to the court by Mr. Nacchio’s
Judge Nottingham also spoke highly of Mr. Nacchio’s professional
ascent. He rose from hardscrabble beginnings in New York City to
the boardrooms of the world’s biggest telecommunications
“In many ways, Mr. Nacchio is the classic Horatio Alger story,”
Judge Nottingham said. “From immigrant parents, he rose to
enormous heights by sheer will and talent.”
But Judge Nottingham also said that although Mr. Nacchio once
was a model executive, he had been ultimately swayed by greed.
Quoting from the Robert Bolt play “A Man for All Seasons,” about
Thomas More’s refusal to support Henry VIII’s wish for a
divorce, Judge Nottingham said that the rule of law must be
respected. He said that Mr. Nacchio’s actions required
Mr. Nacchio, who wept quietly during portions of the hearing,
chose not to speak before he was sentenced. After Judge
Nottingham had explained his decision, Mr. Nacchio approached
the bench with his hands outstretched and asked repeatedly if he
could address the court.
Judge Nottingham shook his head.