An Overview of the Sentencing Hearing

Judge Nottingham issued his order sentencing Joseph Nacchio based on three components:

1) Fine

2) Imprisonment

3) Terms for Release

First, the Judge imposed a fine of $19M in addition to a forfeiture $52M based on Mr. Nacchio's gross proceeds from his stock sale.  Next, Mr. Nacchio was sentenced to 72 months (6 years) per count to be served concurrently.  Finally, he was given two years supervised release, the minimum according to the sentencing guidelines.  Mr. Nacchio's motion for bail pending appeal was denied and Judge Nottingham ordered Mr. Nacchio to voluntarily surrender within 15 days after the location of incarceration has been determined.

The day started with Judge Nottingham denying a series of outstanding motions, including the motion for acquittal and the motion for change in venue.  He also denied the government's motion to subpoena the medical records of Mr. Nacchio's son, David.    

Following the rulings, Defense attorney, Jeffrey Speiser began by addressing the issue of Mr. Nacchio's gain for the sale of stock, a factor in determining his sentence.  Mr. Speiser argued that the calculation of $44M of gain was incorrect and that the amount should have been based upon the value of the material nonpublic information that was realized in the transaction, an amount Nacchio argued on brief was approximately $1.8 million.  Judge Nottingham rejected this argument.  The Judge did find, however, that the amount Mr. Nacchio realized was $28M, the total amount of the sale of his stock minus taxes and transaction costs. 

Next, Defense attorney, Herbert Stern addressed the court arguing for a downward departure from the sentencing guidelines or in the alternative to sentence Mr. Nacchio at the low end of these guidelines.  In support of his argument, Mr. Stern contended that the court should consider Mr. Nacchio's charitable givings as well as his extraordinary family situation, particularly concerning his son, David Nacchio.  At the trial it was disclosed that David Nacchio had apparently attempted suicide. 

U.S. attorney, Colleen Conry, opposed Mr. Stern's charitable givings argument by reiterating a theme that Mr. Nacchio's philanthropic contributions were not "extraordinary but ordinary."  In fact, Ms. Conry suggested that Mr. Nacchio's charitable givings in light of his position and wealth were "paltry" at best.  Regarding Mr. Nacchio's family situation, Ms. Conry asserted that a downward departure would be an unprecedented action because David Nacchio is a 26 year old college graduate, living in an urban area, with other supportive family members.  

US Attorney Cliff Stricklin made the case that Mr. Nacchio should receive a sentence at the upper end of what the sentencing guidelines mandated.  He mainly argued that, on sliding scale of culpability, Mr. Nacchio was at one end of the spectrum.  He also indicated that this was an opportunity to send a message that others would hear.

In the end, Judge Nottingham found that the defense arguments did not justify a downward departure in the sentencing guidelines.

In denying Mr. Nacchio's motion for bail pending appeal, Judge Nottingham considered whether there was a substantial question that, on appeal, likely would result in a new trial.  Judge Nottingham reviewed the arguments the defense planned to make on appeal and determined that they were not close questions.  Judge Nottingham ordered Mr. Nacchio to voluntarily surrender within 15 days of the designation of the place of incarceration.