July 27, 2007 7:32 AM
11:54 a.m.: Joe Nacchio sentenced to six years in prison.
Nacchio, who was standing facing the judge, appeared emotional before the sentence was read, wiping away tears with a handkerchief.
The judge also fines Nacchio the maximum $19 million, and orders two years of supervised release following the prison term. Earlier today, Nottingham ordered Nacchio to forfeit $52 million of gross proceeds from his illegal sales in April and May 2001.
Notingham rejected a motion for Nacchio to remain free pending appeal, but gave him 15 days to report to prison.
Defense requests and Judge Nottingham recommends the Schuykill federal prison camp in Pennslyvania, which is a minimum security facility.
Judge mentions that some have suggested that Nacchio recently has engaged in "borderline alcohol abuse," but judge refers to the stress Nacchio has been under and doesn't think special conditions should be attached to address the issue.
In denying a defense motion for a lower sentence range, Nottingham said Nacchio is to be commended for his acts of charity to his family and others, but he said he doesn't find them to be extraordinary. Nottingham said charitable works are expected of someone with so much wealth.
Nottingham said there's no question Nacchio's oldest son is ill and that Nacchio has been a wonderful father. But he noted Nacchio also deprived his son when he decided to take the job at Qwest in Colorado. "I bet you anything" that Nacchio wishes he walked away from Qwest in early 2001, but the fact was that he didn't.
10:45 a.m.: Lead prosecutor Cliff Stricklin says the government's recommended sentence of seven years and three months is "just and right."
Stricklin said the government is asking for a sentence on the "high end" of the range, but said it considered seeking an even higher sentence, or upward departure.
"This is not for a pound of flesh or retribution," Stricklin said, but noted the seriousness of the offense, Nacchio's responsibilities as leader of Qwest, and the "devastating consequences" when the company lost credibility.
"Joe Nacchio was Qwest," Strickin said.
Prosecutor Colleen Conry said there are other capable people to care for Nacchio's oldest son, David, who has emotional issues. David Nacchio has a "wonderful mother trained Iin these issues" and a "top-notch psychiatrist."
10:15 a.m.: Lead defense attorney Herbert Stern now is bringing up the "devastating family issue" involving Joe Nacchio's oldest son, David.
"I'd be shocked if government were to say we’re making this up, because we're not," Stern said.
Stern is reiterating that David Nacchio's emotional illness was the reason Nacchio didn't move to Denver while he was Qwest's CEO, and why he wanted out in early 2001. He is making the argument that while Nacchio isn't needed to be side-by-side, he is needed to be available to his son on a moment's notice.
Nacchio is standing beside Stern. His back is to the courtroom gallery, but he can be seen daubing his face and eyes with a handkerchief.
9:45 a.m.: Lead defense attorney Herbert Stern says there's no "rational" basis to calculate that Joe Nacchio's stock gains totaled $52 million.
Judge Nottingham earlier ordered Nacchio to forfeit the $52 million of gross proceeds from his illegal stock sales in April and May 2001.
Stern notes the forfeited amount -- if deemed Nacchio's stock gain -- could drive the highest recommended sentence possible -- 70 to 87 months. He is arguing Nacchio simply doesn't deserve this severe of punishment and that Nottingham should use his discretion.
At most, Stern said, Nacchio's gains were $28 million after option costs and taxes.
He's also making an impassioned argument that Nacchio only sold a fraction of his holdings during the time. "Surely that's a factor to be considered," Stern said.
Stern said Nacchio has been active in his church, helpful to his family and other people. "He's a kind man, he's helped a lot of people."
9:15 a.m.: Judge Nottingham orders Joe Nacchio to forfeit the full $52 million in gross proceeds from his illegal sales in April and May 2001.
Nottingham says the money must be forfeited within 15 days of his order. The decision indicates that Nacchio may get a stiff prison sentence today.
The recommended sentence for such a stock gain would be 70 to 87 months, although Nottingham can deviate from the recommendation.
The judge also has ruled on several motions, including denying again a change of venue. He said the extensive publicity about the case didn't lead to a "circus atmosphere" and didn't prejudice or infect the jury.
Prosecutors said they have no victims lined up to give statements today. Now, the judge and defense are grappling over whether the psychiatrist of Nacchio's oldest son David should testify.
Nacchio's attorneys have argued Nacchio is needed to provide emotional support for his son, who once attempted suicide. But Nottingham indicated Nacchio is going to get prison time, not probation, regardless of the testimony. Letters from the psychiatrist already were submitted to the judge.
Defense attorneys floated the idea of the psychiatrist presenting testimony in private, but Nottingham said he doesn't believe case law permits a proceeding to be closed to the public for such a reason. The defense ultimately has decided not to call the psychiatrist to provide public testimony.
9:01 a.m.: The sentencing hearing of former Qwest CEO Joe Nacchio on 19 counts of insider trading is under way.
The courtroom is full.
8:30 a.m.: A somber Joe Nacchio has entered the courtroom with his family, close friends and attorneys.
The gallery is nearly full. Troy Eid, U.S. Attorney for Colorado, also is in the courtroom.
Curtis Kennedy, attorney for the retirees, was the first to arrive today, at 2:12 a.m. with lawn chairs. He said the next person arrived at 5:40 a.m.
"I miscalculated," Kennedy said. But he got in a little morning reading, courtesy of newspapers dropped off at the courthouse. A U.S. marshall later confiscated the newspapers, saying they were addressed to U.S. District Judge Richard Matsch. Only about a half dozen retirees and reporters were waiting in line when the courthouse doors actually opened at 6:30 a.m.
7:30 a.m.: Former Qwest CEO Joe Nacchio will be sentenced today on 19 counts of insider trading.
Dozens of retirees, academicians, former judges and others already have entered the federal courthouse to watch the sentencing.
Nelson Phelps, executive director of the Association of U S West Retirees, said Thursday that he won't attend Nacchio's sentencing. "I have a philosophy of non-vindictiveness," he said. "I think the jury has done its job, and the last thing I need to do is go down to the courthouse and smile at a guy who has been taken down." He said he also didn't want to witness family members "crying or whatever."
Prosecutors are recommending a prison term of seven years, three months. They want Nacchio to be fined the full $19 million -- $1 million for each count -- and to be ordered to forfeit the $52 million of gross proceeds from his illegal stock sales in April and May 2001.
The defense maintains Nacchio should forfeit only $1.8 million, which puts the recommended sentence at 30 to 41 months. Defense attorneys are arguing for further leniency, saying Nacchio is needed by his oldest son David, who has emotional issues and attempted suicide when Nacchio was CEO of Qwest.
If U.S. District Judge Edward Nottingham issues a prison sentence as many expect, another key issue will be how long Nacchio will be allowed to be free before reporting to prison. Nacchio's attorneys this week filed a motion arguing their client should be free on bail pending appeal.