DENVER - Two years after his conviction, former Qwest CEO Joe Nacchio reported to a federal prison in Pennsylvania on Tuesday to start a six-year sentence for insider trading while he appeals his conviction to the Supreme Court.
Nacchio was convicted in 2007 of 19 counts of insider trading. Prosecutors said he sold $52 million worth of stock in 2001 based on nonpublic information that Denver-based Qwest Communications International Inc. faced trouble meeting its sales targets. He was acquitted on 23 other counts of insider trading.
Nacchio reported to a minimum-security prison camp in Minersville, Pa., around 11:30 a.m. EDT, a prison spokesman said. His deadline was noon.
The Minersville camp is a satellite facility of the Federal Correctional Institution, Schuylkill.
Nacchio joins 287 inmates in a dormitory-style unit at the prison camp, which has an outdoor walking track and indoor gym. A typical day starts with breakfast at 6:15 a.m., work at 7:30 a.m., and dinner at 4:30 p.m. Lights out is at 11 p.m.
He is inmate No. 33973-013 and will be assigned a job that likely pays 12 to 40 cents an hour, officials said.
Nacchio has asked the Supreme Court to review his conviction. Separately, he asked Supreme Court Justice Stephen Breyer to let him remain free on bail while he pursues his appeal, but Breyer rejected that request Tuesday.
He still faces a lawsuit by the Securities and Exchange Commission accusing him and others of financial fraud.
Outside of Denver's Qwest building, where Nacchio used to work, Margaret Crisp sells flowers two days a week. Qwest once paid her salary and she too used to work inside Denver's tallest skyscraper.
"I started as a long distance operator," Crisp said.
On Tuesday, the news was quite different.
"They sent Nacchio to jail today," Crisp said.
She admits more than a few of her ex-colleagues came to her corner with the word, celebration on their minds.
"In fact, one of the persons I used to work with came out and said, 'Yea! He's in jail!'" Crisp said.
Crisp says she lost $50,000 when Qwest shares tanked and, like many in her situation, she says she blamed him for her misery.
"It's a relief to have him punished for all the stuff he took from us," Crisp said.
Nine years ago, Nacchio was one of the most powerful men in the state. Back then he told 9NEWS he lived by five words: "Serve customers well and then save cash."
Two years ago this Sunday, a jury agreed on 19 separate occasions he illegally dumped Qwest stock.
If he is to get out of a cell anytime soon, he'll have to rely on the Supreme Court.
"I think it's bordering on impossible," University of Denver Law Professor J. Robert Brown said.
Brown knows this case well and says he seriously doubts the Supreme Court will grant Nacchio a reprieve, despite the long hours put in by his attorneys.
"I would describe this case as being hard fought every step of the way," Brown said.
9NEWS Legal Analyst Scott Robinson gives Nacchio about a one in 10 chance of getting his case heard.
"Nacchio is facing all kinds of problems. Unless the Supreme Court takes his case and reverses it, he'll literally be on the hook for millions of dollars and will serve six years - or close to it - in federal prison," Robinson said.
Nacchio has been free since his conviction while pursuing his appeals of his conviction and sentence. In addition to serving prison time, Nacchio was ordered to pay $71 million in fines and forfeitures.
A three-judge panel of the 10th U.S. Circuit Court of Appeals ruled last year that Nacchio deserved a new trial because the trial judge barred a defense witness who planned to testify about explanations for Nacchio's trading patterns.
The full appeals court in February reinstated the conviction in a 5-4 ruling, saying the judge was within his discretion.
Nacchio's attorneys then asked the U.S. District Court for a new trial and also appealed to the Supreme Court, saying the 10th Circuit ruling conflicts with rulings by other appeals courts. They also argued that juror instructions were improper and that the defense witness' testimony was improperly barred at trial.
Nacchio originally was due to report to prison March 23, but he won a delay after telling a judge he was worried about a growth on his leg that might be cancerous. It turned out to be benign, but U.S. District Judge Marcia Krieger delayed his surrender date to decide whether he could be free on bail while he appealed his conviction.
She decided against it April 7, saying Nacchio hadn't met a requirement to show he would likely win a reversal of his conviction, or be granted a new trial or new sentence without prison time.
Nacchio appealed, and on Monday, a three-judge panel of the 10th Circuit said in a 2-1 ruling, "Mr. Nacchio has not shown that there is a reasonable chance that the Supreme Court will grant his petition."
"Thanks to the hard work of federal prosecutors ... the defendant will now begin to serve his six-year prison sentence," acting U.S. Attorney David Gaouette said in a written statement.
(Copyright Associated Press. All Rights Reserved.)