Troy Eid - Joseph Nacchio Trial

Joseph Nacchio Trial

Eid was appointed as the United States Attorney for the District of Coloardo on June 9, 2006. Among the cases Eid inherited from his predecessor, acting U.S. Attorney Bill Leone, was the ongoing prosecution of Joseph Nacchio, the former chairman of the board and chief executive officer of Qwest Communications International indicted on 42 counts of insider trading. Nacchio was accused of selling $101 million of Qwest stock in the first five months of 2001 despite knowledge from company insider's that Qwest's financial condition was deteriorating. Leone had been lead prosecutor on the Nacchio case since 2002, but several members of the prosecution team had left throughout the years due to infighting that threatened to derail the case. Due to the problems with the Nacchio team and prior failures to achieve convictions against other Qwest employees, U.S. Department of Justice officials became concerned about the Denver office's ability to get a conviction and considered taking over the prosecution. Eid persuaded them otherwise in part by hiring Cliff Stricklin, who prosecuted the case against former Enron officials Jeffrey Skilling and Kenneth Lay in response to the Enron scandal. Although Stricklin was difficult to woo following his Enron success, Eid successfully hired Stricklin in August 2006 as First Assistant U.S. Attorney of Colorado and the head prosecutor for the Nacchio case

The prosecution team, which had about seven months to prepare for trial, also included Justice Department litigator Colleen Conry; Colorado Assistant U.S. Attorney Kevin Traskos; former tobacco litigation task force prosecutor Leo Wise; and Colorado Assistant U.S. Attorney James Hearty, the only prosecutor who served on Leone's original Qwest team. The prosecutors reportedly got along very well and heeded lessons from previous unsuccessful corporate fraud, which prompted Stricklin to describe them as "the very best team" he ever worked with. The trial began in March 2007 and in April, Nacchio was convicted of 19 of the 42 counts of insider trading. On July 28, he was sentenced to six years in prison and ordered to pay a $19 million fine and forfeit the $52 million he grossed on the illegal sales. Eid described the Nacchio case as the largest insider trading case in United States history; regarding the verdict and sentencing, Eid said, "This is what the American criminal justice system is all about" and said, "'Convicted felon Joe Nacchio' has a very nice ring to it."

Nacchio appealed the verdict, arguing that then-federal Judge Edward Nottingham had improperly excluded a defense witness from offering expert evidence during the trial. In a two-to-one decision on March 17, 2008, the Tenth U.S. Circuit Court of Appeals overturned all 19 guilty counts and ordered a new trial before a different judge. Eid appealed the decision to the full appellate court, and recruited Edwin Kneedler, principal deputy solicitor general for the Department of Justice and a veteran Supreme Court attorney, to represent the government in the case; Eid said of Kneedler, "We wanted the best and we got him." In Feb. of 2009, an en banc panel of the Tenth Circuit reversed the previous panel's decision and reinstated all 19 convictions.