Nacchio guilty of 19 counts in stock scandal

U.S. District Judge Edward Nottingham set a July 27 sentencing date for Nacchio, who is free on $2 million bail. Nacchio also could be required to forfeit the $52 million in proceeds tied to the convictions, but that will be determined by the judge at sentencing.

The Justice Department has gone after a number of corporate executives in cases involving accounting and fraud scandals in the late 1990s and 2000 that sparked outrage among investors.

Former Cendant Corp. Chairman Walter Forbes is serving more than 12 years in prison and has been ordered to pay $3.28 billion in restitution. He was convicted of conspiracy to commit securities fraud and other charges in a massive fraud scheme that cost the travel and real estate company and its investors more than $3 billion.

Former WorldCom chief Bernard Ebbers is serving a 25-year prison sentence for his role in the fraud that drove that Clinton, Miss.-based company into bankruptcy in 2002.

Former Enron chief executive Jeffrey Skilling is serving 24 years and four months in prison for fraud and other crimes in the collapse of the former energy giant. Enron founder Ken Lay also was convicted, but a judge vacated that decision when Lay died of a heart attack last year.

HealthSouth Corp. founder Richard Scrushy was acquitted of all charges in a $2.7 billion fraud during his tenure at HealthSouth.

The criminal case against Nacchio stemmed from a years-long government investigation into an accounting scandal at Qwest Communications International Inc., a primary telephone service provider in 14 mostly Western states.

Federal regulators have said Qwest falsely reported fiber-optic capacity sales as recurring instead of one-time revenue between April 1999 and March 2002, a practice that allowed Qwest to improperly report about $3 billion in revenue. Qwest later restated about $2.2 billion in revenue.

Former Qwest Chief Financial Officer Robin Szeliga is serving probation on one count of insider trading that occurred at the same time as Nacchio’s stock sales. Two former midlevel managers pleaded guilty to charges stemming from a Qwest deal with Arizona schools.

A civil fraud lawsuit is still pending against Nacchio, former President Afshin Mohbebbi and other one-time executives, alleging they orchestrated a financial fraud that led to the scandal. The Securities and Exchange Commission is seeking repayment and civil penalties, with the amounts to be determined at trial.

MORE FROM CORPORATE SCANDALS

Corporate Scandals Section Front

Charges dropped against Stockman Adviser gets 12 years in prison in fraud case Judge sentences ex-Refco CEO to 16 years Ex-Bear Stearns execs may face fraud charges Ex-CEO of Broadcom pleads not guilty Broadcom exec faces drug, conspiracy charges AIG sues ex-CEO Greenberg for breach of duty Appeals court orders new trial for Nacchio Lawyer gets 2 years for kickback scheme Corporate Casanova’s dirty secrets seeping out Corporate Scandals Section Front   Add Corporate Scandals headlines to your news reader: