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UPDATE 2-Ex-Qwest CEO to report to Penn. prison

By Reuters  |  General News  |  Mar 05, 2009 01:08AM GMT  |   Add a Comment
 
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* Nacchio to serve insider trading sentence in Pennsylvania

UPDATE 2-Ex-Qwest CEO to report to Penn. prison

* Nacchio ordered to report by March 23 (Adds background)

DENVER/LOS ANGELES, March 4 (Reuters) - A federal judge on Wednesday ordered Qwest Communications International Inc's former chief executive, Joseph Nacchio, to report to prison in Pennsylvania by March 23 to begin serving a sentence for insider trading.

Nacchio will serve the six-year prison term at the minimum-security satellite prison camp at Schuylkill federal prison at Minersville, Pennsylvania, according to an order by U.S. District Judge Marcia Krieger.

The case was considered an important victory in government efforts to crack down on corporate titans who profited while their companies suffered financial setbacks.

A jury convicted Nacchio in 2007 on 19 counts of insider trading for illegally selling $52 million worth of stock six years earlier, after company insiders warned him that Qwest could not meet its financial targets.

A three-judge appeals panel of the 10th U.S. Circuit Court of Appeals threw out the convictions last year. But the full appeals court reinstated the conviction and Nacchio's six-year prison sentence last week.

Nacchio's attorney said her client would ask the U.S. Supreme Court to review the case.

Nacchio, who lived in a New Jersey mansion and commuted via corporate jet to Denver-based Qwest, had asked at his sentencing hearing to be sent to the Schuylkill facility, about 90 miles from his home.

Nacchio had petitioned U.S. District Judge Edward Nottingham for leniency out of concern for the welfare of his family and his son, who struggled with mental illness and attempted suicide during his father's tenure at Qwest.

Nottingham remarked that Nacchio, 59, "rose to enormous heights by sheer will and talent" from modest neighborhoods in New York and New Jersey before he was felled by greed.

In court documents, Nacchio's attorneys revealed that, unlike other telecommunications rivals, he had refused to hand over customer call records to the National Security Agency in 2001 as part of a secret surveillance program.

Nacchio claimed in his appeal that the government had canceled lucrative contracts with Qwest in retaliation for his refusal to cooperate.

Nacchio joins a number of other high-profile corporate convicts who are serving time in minimum security prisons in the United States for financial crimes.

Former Enron CEO Jeffrey Skilling and Andrew Fastow, the company's former CFO, are both imprisoned in Colorado facilities after being convicted of fraud and conspiracy, according to federal prison records.

Former WorldCom Chief Executive Bernard Ebbers is serving his 25 years for fraud and conspiracy in Louisiana, and Adelphia Communications founder and former CEO, John Rigas, 84, is housed at a minimum security prison in North Carolina for a 15-year term, the Federal Bureau of Prisons Website showed. (Reporting by Robert Boczkiewicz and Keith Coffman in Denver and Gina Keating in Los Angeles; Editing by Phil Berlowitz)


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