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July 27, 2007

Qwest CEO gets six years and mad money

As detailed in this CNN piece, the "former chief executive of Qwest Communications International, Joseph Nacchio, was sentenced on Friday to six years in prison and ordered to forfeit $52 million in stock gains from insider trading."  Also, "Nacchio was fined an additional $19 million in the case presided over by U.S. District Judge Edward Nottingham."

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Comments

The financial sentence is very unfair. And is it unusual to use 2 different gain numbers? Judge used 28 mill to decide on guideline level and 52 million as his disgorgement? By the way I beleive that Joe gets to restate his taxes to adjust for the 52 million. This means the IRS owed him a nice chunk of change.

Posted by: DAG | Jul 27, 2007 4:55:54 PM

The real question in my mind is why the sentencing guidelines feel compelled to have fine graduations of sentences all the way up to $400M. In this case the difference between $28M and $52M being 2 guideline levels.

New York's statutes stop keeping track after a million dollars (or at least did when I practiced there) and Colorado's stop after $15,000.

With such huge amounts of money at stake, is criminal culpability really that different depending upon the exact amount of the offense?

Also, it is hard to have pity based on a financial penalty against a guy who has been proven guilty beyond a reasonable doubt by a jury of conduct that would authorize punitive damages in a state law civil case.

And, how is Nacchio any differently situated than criminal tax defendants in drug cases who also aren't allowed to take deductions for the costs of earning income?

Posted by: ohwilleke | Jul 27, 2007 9:11:44 PM

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