The government has a tentative agreement with Joe Nacchio for the transfer of the $52 million it wants the former Qwest chief executive to forfeit in connection with his April conviction on illegal insider trading.
“We have reached a stipulation we all agree on,” federal prosecutor Kevin Traskos said Thursday during a hearing at the Denver federal courthouse. “Certain money (is being) moved into certain accounts.”
The deal should be finalized by today, lead prosecutor Cliff Stricklin said after the hearing.
The government filed a motion two weeks ago asking the judge to freeze Nacchio’s assets in case he is ordered to forfeit the $52 million. Prosecutors said in the motion that Nacchio already has transferred at least $133 million to his wife, Anne Esker. With the tentative deal in place, that motion was withdrawn Thursday.
If he is ordered to forfeit the $52 million, prosecutors remain concerned about the possibility of a fight over the money with third parties, including Esker.
Traskos said Esker has declined to waive her rights to the money.
As a result, prosecutors are seeking a preliminary order of forfeiture from U.S. District Judge Edward Nottingham so they can begin the process of tracing Nacchio’s assets.
Nottingham didn’t rule Thursday on the motion because he said it was unclear. Stricklin said he would refile the motion today. Nacchio’s attorneys will have a week to respond to the forfeiture motion.
Nacchio, 57, did not attend the hearing. On April 19, he was convicted on 19 counts of illegal insider trading connected to his sale of $52 million in Qwest stock in April and May 2001. Jurors said it was clear Nacchio had material, nonpublic information that the company was struggling financially while he made those sales. Nacchio’s attorneys have said they will appeal.
Nacchio faces up to 10 years in prison and a $1 million fine on each count. His sentencing is scheduled for July 27.
Nottingham said Thursday he would determine whether victims – people who bought Qwest stock during the timeframe of the illegal trades between April 26, 2001, and May 29, 2001 – will be allowed to speak at Nacchio’s sentencing.
Nacchio attorney Mark Rufolo contended that they do not have the right to speak at sentencing. Stricklin told Nottingham he didn’t think the matter would be an issue, an indication that no victims are lined up at this time to speak.
Nacchio still faces a number of shareholder lawsuits and a Securities and Exchange Commission fraud suit.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
