[1] He was convicted of 19 counts of insider trading in Qwest stock on April 19, 2007[2] – charges his defense team claimed were U.S. government retaliation for his refusal to give customer data to the National Security Agency in February, 2001.
[3] This defense was not admissible in court because the U.S. Department of Justice filed an in limine motion,[4] which is often used in national security cases, to exclude information which may reveal state secrets.
[citation needed] In 2000, during Nacchio's tenure as Qwest CEO, the company acquired its regional rival US West.
[11] According to a The Washington Post report, Nacchio claimed that the National Security Agency had asked Qwest in February 2001 to participate in a surveillance program; Nacchio said that after he declined, the NSA punished Qwest by dropping a contract worth hundreds of millions of dollars.
On November 21, 2005, The Wall Street Journal reported that Nacchio "believed Qwest was doing well because it was getting lucrative secret national-security-related work from the federal government."
Nacchio claimed that he was not in a rightful state of mind when he sold his shares because of problems with his son, and the imminent announcement of a number of government contracts.
Each count carries a potential 10-year jail term and corresponds to a sale of Qwest shares, including a flurry in April–May 2001, when Nacchio sold almost $39 million in stock.
[16] On February 25, 2009, the full Tenth Circuit reversed the three-judge panel and reinstated the conviction and sentence.
[17][18] Nacchio surrendered April 14, 2009 to a federal prison camp in Schuylkill, Pennsylvania to begin serving a six-year sentence for the insider trading conviction.