Jailed broadband boss Joseph Nacchio is suing his defense lawyers for bungling his insider-trading case while running up a $25 million legal tab for pricey meals, hotel-room movies — and even underwear.
Nacchio, 61, is serving 70 months in federal prison after being convicted of illegally selling stock he owned in Qwest Communications, which he launched and helped build into a major broadband firm.
Nacchio claims Herbert Stern and Kevin Kilcullen, and their law firm, Stern & Kilcullen LLC in Roseland, NJ, “grossly overbilled” him for — among other things, fresh underwear — and were so negligent in handling vital defense material it caused Nacchio to lose.
The ex-broadband chief was fined $19 million and had to forfeit $44.6 million of the $52 million in Qwest shares he sold based on alleged insider information.
In an appeal of his conviction, a second court ruled the trial judge had miscalculated the amount of stock sold. That judge shaved two months from the sentence and slashed $7.4 million from the fine.
Nacchio is now seeking compensatory and punitive damages, as well as lawyers’ fees going forward.
His new lawsuit filed in New Jersey state court blasts the pair for “their blatant failure to comply with basic litigation procedures,” including failing to have his key expert witness take the stand.
Daniel Fischel, the ex-dean of the University of Chicago Law School, was the “heart of Nacchio’s defense” and could have blunted the prosecution’s case, the filing said.
The fine and forfeiture have been held in escrow during Nacchio’s appeals.
In January, a federal court approved Nacchio’s civil settlement with the Securities and Exchange Commission, which bars him for life from serving as an officer of a public company.