Tuesday, June 21, 2005
Former HealthSouth CFO Michael Martin-- one of the Five Guilty CFOs who testified against former CEO Richard Scrushy -- and former senior vice president for tax Richard Botts had their sentences vacated and remanded for resentencing by the Eleventh Circuit in two unpublished opinions that employ the same language and reach identical conclusions (Martin here and Botts here). Martin entered a guilty plea in June 2004 to one count of conspiracy to commit securities fraud and one count of filing false financial statements with the SEC, and under the Sentencing Guidelines his offense level was 31, which called for a sentence of 108-135 months. The government filed a 5K1.1 motion and asked Chief U.S. District Judge U.W. Clemon to sentence Martin to a 60-month term of imprisonment. Instead, the judge sentenced Martin to 60 months probation, with six months home confinement, by granting a 21-level downward departure. Botts entered a guilty plea to conspiracy and mail fraud charges in August 2003, and although the offense level under the Guidelines was 34, which would result in a sentencing range of 151-188 months, the statutory maximum for the crimes (at that time) was five years, so his sentence was capped at 60 months. The government made a 5K1.1 motion and asked for a 40-month term of imprisonment for Botts, but Chief Judge Clemon sentenced Botts to 60 months probation, with six months home confinement, by granting a 26-level downward departure. The government appealed both sentences, and the appellate court remanded them because the judge provided no written or oral statement supporting what the Eleventh Circuit termed "this extraordinary departure" in both cases, rendering the sentences "incapable of meaningful appellate review."
On remand, Chief Judge Clemon can give each the same sentence, and both have served the term of home confinement, a point played upon quite heavily by Scrushy's defense counsel in cross-examining each. The judge will, however, have to give reasons for the departures that relate to permissible factors under the Guidelines, and the sentence will be subject to appellate review for reasonableness under Booker. (ph)