DENVER—A judge erred in barring a defense expert witness while allowing two similar experts for the prosecution, according to a national lawyers group that filed documents Tuesday supporting former Qwest Communications Chief Joe Nacchio’s appeal of his criminal conviction.
The National Association of Criminal Defense Lawyers in their “friend of the court” filing said the move allowed government experts to be “effectively unchallenged.”
Allowing Nacchio’s conviction to stand would “create an uneven playing field, especially in complex criminal trials such as white-collar cases, in which experts are increasingly important,” according to the document.
U.S. Attorney’s Office spokesman Jeff Dorschner said prosecutors were not immediately available for comment.
Barbara Bergman, a University of New Mexico law professor and president of the group, said the expert was Daniel Fischel, an author and expert on corporate law and markets, who was to testify about Qwest’s guidance and its impact on the financial markets during 2000 and 2001.
Nacchio was convicted of 19 counts of insider trading in April after a jury concluded he sold $52 million worth of stock when he knew Qwest Communications International Inc. was at financial risk but didn’t tell investors. The jury acquitted Nacchio of 23 counts.
Nacchio has been sentenced to prison for six years but remains free on bail pending the outcome of his appeal. The 10th U.S. Circuit Court of Appeals has given prosecutors until mid-November to respond to Nacchio’s claims and scheduled oral arguments for Dec. 18.
The case was based on 2001 stock transactions when prosecutors said Nacchio lied to investors while selling his shares as the Denver-based company battled aggressive competition in a weakening economy.
Fischel’s testimony was disallowed because of a court rules governing notice about witnesses that attorneys must give to opposing sides, according to the brief. The group said the judge barred the defense witness without a hearing or consideration of lesser sanctions.
Nacchio attorney Maureen Mahoney filed an appeal last week seeking to overturn the conviction based on insufficient evidence and key errors by excluding Nacchio’s classified information defense. Tuesday’s brief was in support of that appeal.
Nacchio earlier said part of his defense would revolve around classified government contracts he expected Qwest to receive which made him more optimistic about its future. That evidence was not introduced at trial.
In a 58-page brief, Mahoney also argued the expert defense witness was erroneously denied the chance to testify and the jury received improper instructions.
The case grew out of a multibillion-dollar scandal that forced Qwest to restate $2.2 billion of revenue. Federal regulators have said Qwest falsely reported fiber-optic capacity sales as recurring instead of one-time revenue between April 1999 and March 2002, a practice that allowed it to improperly report about $3 billion in revenue.
Qwest stock plummeted from more than $60 a share in 2000 to just $2 a share in 2002 and its near-collapse left thousands of pensioners in financial straits.
A civil fraud lawsuit is still pending against Nacchio and four other one-time Qwest executives, alleging they orchestrated financial fraud that led to the scandal. The Securities and Exchange Commission is seeking repayment and civil penalties, with the amounts to be determined at trial.
Qwest’s territory covers 14 states including North Dakota.
