DENVER—Citing new evidence, former Qwest Communications CEO Joe Nacchio has asked a Denver federal court for a new trial less than a month before he is to start serving a six-year prison term for insider trading.
Nacchio argued in a late Thursday filing that former Qwest chief financial officer Robin Szeliga offered evidence in a pending civil suit that differs from her testimony in Nacchio’s 2007 criminal trial.
Szeliga testified in a deposition in the civil case in February that she told Nacchio in late 2000 that Qwest would have a 2001 revenue shortfall of 1.4 percent. Nacchio attorney Maureen Mahoney argued that the 10th U.S. Circuit Court of Appeals, in its review of Nacchio’s conviction, concluded Szeliga had told Nacchio that Qwest would miss its revenue target by 4.2 percent.
The issue of earnings expectations is critical to Nacchio’s case. Federal prosecutors argued that Nacchio sold Qwest stock knowing that the company’s future earnings were substantially at risk, but that he did not tell investors.
“The newly discovered evidence in this case is material to Nacchio’s conviction because it establishes that the ‘risk’ that Nacchio allegedly traded on was not ‘what it was alleged to be’ by the government,” Mahoney argued in the filing.
Prosecutors alleged Nacchio sold $52 million worth of stock at a time when he knew Denver-based Qwest Communications International Inc. was at risk.
Mahoney, citing Szeliga’s testimony, insisted that “the magnitude of ‘risk’ that the prosecution pressed before the jury and Tenth Circuit was flat wrong.”
A jury convicted Nacchio of 19 counts of insider trading in 2007. Nacchio was sentenced to six years in prison and ordered to pay $71 million in fines and forfeitures.
A three-judge appeals court panel threw out the conviction last year, ruling that the trial judge wrongly excluded expert testimony from a defense witness.
Last week, the full 10th Circuit reinstated the conviction and revoked Nacchio’s bond.
On Wednesday, U.S. District Judge Marcia S. Krieger told Nacchio to report to the minimum-security Federal Correctional Institution Schuylkill satellite camp in Minersville, Penn., by noon March 23. Nacchio also is appealing his sentence.
In a separate court filing Thursday, Nacchio asked an appeals court panel for an order continuing his release pending a petition for review by the U.S. Supreme Court.
“He is not a flight risk or a danger, and his petition is not for the purposes of delay,” the filing states. “Nacchio will file his petition in three weeks, and that petition will raise several ‘substantial questions’ for review.”
Those questions include whether the full 10th Circuit correctly ruled on issues involving expert testimony and jury instructions.
Jeff Dorschner, a spokesman for the U.S. attorney’s office in Colorado, could not be immediately reached for comment Friday.
Szeliga gave her new testimony in a civil suit against Nacchio and other former Qwest executives brought by the Securities and Exchange Commission. The SEC alleges they orchestrated a financial fraud that forced the telecommunications company to restate $2.2 billion of revenue.
A former AT&T executive, Nacchio moved to Qwest after being passed over for the top job at AT&T. He resigned from Qwest in June 2002, about two months after Qwest disclosed that the SEC had opened a formal inquiry into its accounting.
Nacchio was one of several corporate executives convicted as part of a government push to punish white-collar executives stemming from major accounting fraud at companies like Enron and Worldcom.
Qwest is the primary telephone provider in 14 mostly Western states.
