That doesn't mean the indictment is accurate, it is written at a point where it hasn't been scrutinized by the courts. They are pretty much always written as the very extreme position of what could have happened. They always present the offender as having clear intentions of breaking the law, when reality is much more complex. For example, they always throw in extra charges. In this case:
> Nacchio was convicted in 2007 of 19 counts of insider trading and acquitted on 23 counts. [1]
Prosecutors have to prove it's plausible the guy did it, they don't have an obligation to present an accurate or realistic scenarios in their original pre-trial arguments in order to win. Even the judgement by the courts can be inaccurate, this is why appeals courts are super important:
> The 10th U.S. Circuit Court of Appeals ruled Friday that the trial judge overstated the amount of Nacchio's alleged financial gain.
> Joseph P. Nacchio was the only head of a communications company to demand a court order, or approval under the Foreign Intelligence Surveillance Act, in order to turn over communications records to the NSA.
His conviction doesn't disprove he lost government contracts for fighting back against the NSA, only that he attempted to financially benefit from his unique knowledge of it. As even tptacek admits, it's a very plausible complaint. And one now effectively derailed.
Why are you defending this person?
The insider trading case does not disprove that QWest faced serious economic repercussions for non-compliance.
The question of whether his insider trading charge, which was filed by the SEC four years after his initial actions at QWest, was a response to his non-compliance is a lot less likely. But publicly discrediting your opponents sounds like the type of thing particular agencies do best.
The guy was convicted of defrauding his shareholders out of many millions of dollars. The basic fact pattern supporting the allegation is there in black and white; his attorneys have, from what I've read, acknowledged those facts.
I'm not arguing that the government didn't "retaliate" against Nacchio. I have actually no idea whether they did or didn't (it's tricky to tease it out given the timing of the prosecution, which again happened during a wave of similar prosecutions).
My point is that people should be wary about rehabilitating people like Nacchio. The accepted facts of that case do not paint a sympathetic picture.
There are good, strong arguments against NSA surveillance and coercive interventions with industry. They should survive inconvenient facts. But that's not even what's being asked right now. The only question here is, are those arguments damaged by the refutation of one single very convenient fact?
This happens all the time on HN: people really seem to want to observe the world through the lens of their issues. I have trouble with that. I think the NSA needs drastically better regulation, and that some of their actions warrant criminal justice attention. But I have an even bigger problem with accepting what seem to be obvious falsehoods in the service of that perspective.
As for peoples' sympathy for Nacchio, I'll tell you that I think that a company executive who cheats on stock options is not a rare thing. It's not my favorite thing, but the degree to which that affects me personally is close to nil; but a telecomm executive who (allegedly) told the NSA to piss off is something that affects me, and worth a second glance. Nacchio has been consistent in his denials and allegations throughout and continues to be to this day.
Here is an interview from March. http://www.foxbusiness.com/business-leaders/2014/03/27/forme...
And one from May http://denver.cbslocal.com/2014/05/28/defiant-joe-nacchio-la...
>But I have an even bigger problem with accepting what seem to be obvious falsehoods in the service of that perspective.
What seem to be? They either are obvious falsehoods or they are not. And, I have to tell you that the things that are obvious to you and the things that are obvious to me are not always of the same set. I can't even begin to imagine what kind of saint a person would have to be to earn standing in your court.
I do not care what Nacchio has to say. You can find anything he says compelling and that is fine.
I am saying that independent of anything Nacchio has to say, he does not appear to have been convicted on trumped-up charges. But that belief is extremely common; even Jason Kottke featured it on his popular blog.
The amount at hand was (curse HN for hiding the parent thread), ~$100m. Let's be generous and say as much as $250m. A significant amount? Yes. As much as has remained unprosecuted in other significant cases of fraud.
Pardon my French here.
Hell. Fucking. No.
I'm answering briefly in the midst of a number of other tasks and with a slow system, so I'm not even going to pretend that my case here is complete or entirely cogent.
But as memory serves, there was a financial bailout in recent memory on the order of $650 billion dollars, and some trouble in the real-estate sector. So it's not clear to me just how significant a $100m case is. Especially if other circumstances (noted above) meant the government was itself influencing the financial outcome (and limiting disclosure).
The question is less one of fabricated enforcement than selective enforcement, along with concerns over parallel construction.
Moreover, coercive punishment is straight out of Machiavelli or any two-bit warlord. How do you get your underpaid and resentful soldiers to do unspeakable things to the enemy on the battlefield? Threaten doing unspeakable things to them, their loved ones, and belongings yourself. That is a huge concern in any surveillance state.
I was curious as to just how Nacchio's case measures up with other prosecutions, and, actually, it's a pretty good-sized dollar amount, if one accepts the prosecutors' accounting. From the FBI, other financial crimes prosecuted 2007-2011:
http://www.fbi.gov/stats-services/publications/financial-cri...
"On December 6, 2010, the FFETF-Securities Fraud Working Group held a national press conference to announce the conclusion of OBT. U.S. Attorney General Eric Holder gave remarks on behalf of DOJ. In coordination with the national press conference, local press conferences were held across the country by U.S. attorneys participating in the operation. The operation involved 343 criminal defendants nationwide and more than 120,000 victims with losses attributable to alleged criminal activity of more than $8 billion."
That works out to an average of $23 million per defendant.
Also:
"As of the end of FY 2011, the FBI was investigating 1,846 cases of securities and commodities fraud and had recorded 520 indictments/informations and 394 convictions against this criminal threat. Additional notable accomplishments in FY 2011 include: $8.8 billion in restitution orders; $36 million in recoveries; $113 million in fines; and $751 million in forfeitures. The chart below reflects securities and commodities fraud pending cases from FY 2007 through FY 2011."
Assuming $8.9 billion at hand, $17.1 million per indictment (not clear if cases involved multiple indictments).
Health care fraud (HCF):
"The following notable statistical accomplishments are reflective in FY 2011 for HCF: $1.2 billion in restitutions; $1 billion in fines; $96 million in seizures; $320 million in civil restitution; and over $1 billion in civil settlements. The chart below reflects HCF pending cases from FY 2007 through FY 2011."
The link also gives some idea of case volume and significant cases:
Corporate fraud pending cases ranged from 529 for FY 2007 to 726 for FY 2011.
Securities and Commodities fraud pending cases: 1,217 FY 2007 to 1,846 FY 2011.
Mortgage fraud "suspicious activity reports.
FY 2007: 45,717. FY 2011: 93,508.
Dollar losses (millions), pending cases:
2007: $813, 1,199
2008: $1,491, 1,642
2009: $2,798, 2,794
2010: $3,238, 3,129
2011: $3,029, 2,691
Beazer Homes: Involved restitution of $50 million Colonial Bank and Taylor, Bean & Whitaker: Attempt to fraudulently acquire $553 million in TARP funding.
Galleon Group: Insider trading. No specific amount, but Galleon had $7 billion in assets.
Joseph Blimline, Porvident Royalties: $485 million fraud against 7,700 investors.
A&O Entities: $50 million diverted to personal benefit, another $100 million in Ponzi scheme, totalling $150 million for the seven defendants.
Nicholas Cosmo: A "several-hundred-million-dollar Ponzi scheme". $179 in restitution.
_Health care_
Glaxosmithkline: "A $600 million civil settlement under the False Claims Act was agreed upon in addition to $150 million in criminal fines and forfeiture."
American Therapeutic Corporation: "its owners and operators of facilities have submitted approximately $205 million in fraudulent claims to Medicare".
_Mortgage fraud_
Luis Belevan, The Guardian Group: "defrauding at least 1,800 local distressed homeowners out of a $1,595 upfront fee for bogus promises of assistance .... Belevan generated almost $3 million in funds in just nine months"
Howard Shmuckler, the Schmuckler Group: "lients paid fees ranging from $2,500 to $25,000 to modify the terms of their mortgages" (no cumulative dollar amount specified).
Carl Cole, David Crisp: 140 fraudulent mortgage transactions on 108 properties with loans totaling $142 million.
_Financial Institutions_
Anthony Raguz: 1,000 fraudulent loans totalling $70 million, $1 m in bribes, etc., failure of St. Paul Croatian FCU for $170 million in losses.
Gary Foster, Citigroup: "embezzlement of more than $22 million from Citigroup."
William T. Hernandez: "ordered to pay $453,819 in restitution for embezzling money".
_Financial Institution Failures_
Donna Shebetich: "underreported millions of dollars in delinquent mortgages". Bank had $15.8 m in assets.
Elexa Manos: "a scheme to steal $4 million from the Dwelling House Savings & Loan".
Robert E. Maloney, Jr.: "a multi-million-dollar fraud and money laundering conspiracy." So, at least $2 million.
Other categories: insurance fraud, mass marketing fraud,
_Money laundering_
Barclays, NY: "This investigation resulted in the forfeiture of $298 million."
Credit Suisse: "This investigation resulted in the forfeiture of $536 million, which was the largest forfeiture ever received for this type of violation."
_Forensic Accountant_
Fair Finance: "over 5,000 victim-investors totaling approximately $200 million in loss."
Galleon Group: "largest hedge fund insider trading scheme in history." No dollar amount, but $7 billion in the fund per above.
American Therapeutic Corporation: restitution payments of $87 and 72.7 million, totalling $159.7 million.
Good, and thanks for clearing it up.
>I am saying that independent of anything Nacchio has to say, he does not appear to have been convicted on trumped-up charges. But that belief is extremely common; even Jason Kottke featured it on his popular blog.
That's fine, but I don't think it makes much difference if the charges were trumped up or legit. When you've got the NSA, you don't always need to trump up charges. Just be patient, catch your mark breaking some law. Maybe give the mark a little nudge if needed. One of Nacchio's complaints was that he wasn't allowed to disclose certain exculpatory facts in public.
In court, the standard is that the prosecution should prove its case to the jury of the accused's peers beyond a reasonable doubt. That's great and should stay that way.
But for the purposes of Internet message board discussion, there's no need for that high of a threshold. The appeal didn't say Nacchio didn't insider-trade; just that his gains should be considered gains-less-taxes.
⚫ Defendants are entitled to defense. You might even say it's in the name.
⚫ People are entitled to exploration and speculation of both history and legal issues. Legally guaranteed that right in some places.
⚫ Why are you so intent on prosecuting him? For that matter, I note a pretty pronounced pro-Spook bias in many of your posts.
⚫ The circumstances which lead to Qwest's precarious financial state were largely, some might say entirely, the result of the Government's actions against the company for failure to comply with NSL and other intelligence requests.
⚫ I see nothing even in the prosecution's case which establishes that the sale of stock 1) wasn't part of a longer-term asset sale, that 2) it wasn't part of a pre-planned asset divestiture plan. Quite common, there's been previous discussion on HN, I believe, on planned sales by Bill Gates and Steve Ballmer of Microsoft stock.
⚫ If some of the "material, non-public information" related to surveillance requests, Nacchio was pretty much in a damned-if-you-do, damned-if-you-don't situation. Specifically: he was culpable if he disclosed the reason for target undershoots, or if he didn't.
The point remains that the document you've provided as definitive evidence is anything but.