DENVER (AP) - Prosecutors recommended Friday that former Qwest chief executive Joe Nacchio serve a maximum of seven years and three months in prison for completing $52 million in illegal stock sales when his telecommunications company was at financial risk.
In a brief filed late Friday, government attorneys also recommended Nacchio serve three years probation and be fined a maximum of $19 million.
'Any less severe sentence would fail to provide just punishment, to promote respect for the law, and to protect the public,' prosecutor James Hearty wrote on behalf of the legal team.
In a separate brief, defense attorney Herbert Stern asked U.S. District Judge Edward Nottingham to impose an unspecified lesser sentence which he said was warranted because of the effect a lengthy prison term would have on the health of two of Nacchio's family members.
Stern said the situation was explained in detail in a sealed report from the U.S. Department of Probation that was submitted to the judge.
Nacchio also could be required to forfeit millions under a civil forfeiture action filed after he was convicted. Prosecutors want Nottingham to require the one-time CEO give back $52 million of 'ill-gotten gains' while defense attorneys argue it should be no more than $1.8 million.
Nacchio, who resigned from Qwest Communications International Inc. under pressure in June 2002, is scheduled to be sentenced July 27 in U.S. District Court.
He was charged with 42 counts of insider trading for $101 million worth of transactions between January and May 2001.
The jury acquitted him on 23 counts, but concluded that his criminal action began after an April 2001 conference call when he failed to inform investors of the problems the company faced. Jurors convicted him on 19 counts for transactions during April and May of 2001.
Nacchio remains free on bail pending the sentencing, and has said he will appeal the conviction.
Each insider trading count carries a penalty of up to 10 years in prison and a maximum $1 million fine but is adjusted under federal sentencing guidelines that take into account Nacchio's actions which either made the situation worse or better.
Separately, Nacchio and several other one-time Qwest executives are still involved in a pending civil fraud lawsuit that accuses them of orchestrating a financial fraud that forced the Qwest to restate $2.2 billion in revenue.
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