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.
Nacchio was fined an additional $19 million in the case presided over by U.S. District Judge Edward Nottingham, who early in the Friday session said he would not grant probation.
The April conviction of Nacchio, 58, on 19 counts of insider trading was one of the biggest victories for U.S. prosecutors in a range of cases charging illegal financial dealings by corporate executives.
Nacchio was found guilty for grossing some $52 million in sales of Qwest stock in 2001 with information unknown to investors about the company's true financial picture. He was acquitted on 23 other charges. His lawyers said they would appeal the conviction.
Prosecutors had sought a seven-year sentence, the $19 million fine and the forfeiture of the $52 million.
Nottingham ordered Nacchio to give up the $52 million within 15 days and rejected a motion that the trial should be held again. There was no circus atmosphere in this court room, he said.
The government has had a mixed record in its pursuit of prominent white-collar crime cases stemming from a wave of financial scandals in corporate America in the past several years.
Its victories include convictions in the Enron case against Jeffrey Skilling and Kenneth Lay last year following the collapse of the energy trader. Also, former WorldCom chief Bernard Ebbers was found guilty in 2005 of orchestrating a massive accounting fraud.
But the government has also had some losses. A Manhattan federal judge dismissed criminal charges against 13 former KPMG executives in a tax shelter trial earlier this month. He had ruled prosecutors unconstitutionally pressured the auditing firm into withholding legal fees for the defendants.
And a U.S. judge in San Francisco is mulling dismissing criminal charges against the former chief executive of Brocade Communications Systems Inc, the first executive to stand trial in an options backdating case, even as the matter goes to a jury.
Denver-based Qwest became the target of federal prosecutors and regulators in 2002 after the company restated $2.2 billion in revenue for the previous two years while Nacchio was in charge.