Ex-Qwest Chief Nacchio May Have Six-Year Sentence Reduced

Joseph Nacchio, the former chief executive officer of Qwest Communications International Inc. serving a six-year prison term for insider trading, won a federal appeals court ruling that may reduce his sentence.

The Denver-based appeals court yesterday agreed with Nacchio’s arguments that a trial judge incorrectly calculated his gains from stock sales, and sent the case back to the lower court to determine a new prison term.

The U.S. contended Nacchio’s gain from the insider trading was as much as $44.6 million, which under sentencing guidelines corresponds to a sentence of 70 months to 87 months, or about 5 3/4 years to 7 1/3 years, according to the ruling. Nacchio argued the gain that could be attributed to insider trading was $1.8 million, translating to a sentencing range of 41 months to 51 months, or about 3 1/2 years to 4 1/3 years.

“We disagree with the district court’s analysis and hold that Mr. Nacchio’s gain should be calculated in a manner that is more narrowly focused on producing a figure that reflects, in at least approximate terms, the proceeds related to his criminally culpable conduct,” a three-judge panel of the appeals court wrote in the ruling.

Minersville, Pennsylvania

Laura Sweeney, a Justice Department spokeswoman, said in an e-mail that prosecutors are reviewing the decision.

Nacchio, 60, of Rumson, New Jersey, started serving his term in April at a prison in Minersville, Pennsylvania, 46 miles (74 kilometers) north of Harrisburg. He was convicted in 2007 on charges he sold $52 million of shares of Denver-based Qwest in 2001 based on inside information. The appeals court upheld his conviction 5 to 4 after a three-judge panel threw it out on grounds the trial judge improperly excluded testimony by a defense witness.

The appeals court also said the district court must reevaluate how much of Nacchio’s gain he must forfeit. The trial judge, siding with prosecutors, ordered him to forfeit $52 million -- the gross proceeds from shares of Denver-based Qwest he was convicted of selling in 2001 based on inside information. link.....