KUSA - A corporate criminal who made millions in illegal insider trades now wants the IRS to hand over $18 million. Joseph Nacchio, the former, brash and oftentimes unapologetic CEO of Qwest Communications is suing the federal government for the refund.
The U.S. Court of Federal Claims was scheduled to hear argument on the matter of Joseph P. Nacchio v United States of America on Tuesday. Nacchio has transitioned to home confinement and is due to complete his federal sentence as early as next month.
Nacchio's attorneys argue that since Nacchio already paid taxes on the more than $44 million he had to forfeit as a result of his 2007 conviction, he is entitled to the refund. The taxes were paid during the 2001 tax year.
In 2007, a Denver-based jury found Nacchio guilty of numerous counts of insider trading. He was ordered to pay a $19 million fine and forfeit more than $44 million. That asset forfeiture was distributed among more than 100,000 victims, and it is that fact that has Nacchio's defense asking for the refund.
"The theory of Nacchio's attorneys is simple. He paid taxes, almost $20 million, on those proceeds. If these proceeds have gone to other people, then why should he still have to pay taxes on money he no longer has," said 9News legal analyst Scott Robison on Tuesday. "The legal foundation is sound."
But Robinson admits it's not likely to serve Nacchio well in the court of public opinion.
"This is going to gall Qwest shareholders and former employees to the nth degree, because none of them are going to accept the argument that Joe Nacchio should get any money back for anything," he said.
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