Thursday, July 20, 2006

Common Sense in Sentencing

A summary discussion of the sentencing of former Impath Inc. President, Richard Adelson, appears here, in a post that noted how white collar offenders in the fraud/theft category were receiving increased sentences in recent years. As noted in that post:

"Are white collar offenders getting the biggest breaks in this post-Booker world?  Some may think this case and other "variances" in sentencing indicate that white collar offenders are getting the big "breaks."  But what is quantified also is that white collar offenders, at least those in the fraud/theft category have had increased sentences in recent years.  According to the Report on the Impact of United States v. Booker on Federal Sentencing, United States Sentencing Commission 71 (March 2006) the average sentence pre-Protect Act for the category theft and fraud under United States Sentencing Guideline 2B1.1 was sixteen months. This increased to twenty months post-Protect Act and twenty-three months post-Booker. Report on the Impact of United States v. Booker on Federal Sentencing, United States Sentencing Commission 71 (March 2006).  The report attributes two factors to this increase: First, the fact that "statutory and guideline penalties increased for many fraud offenses as a result of the Commission’s Economic Crime Package of 2001, the 2002 Sarbanes-Oxley Act and other recent legislation." And second the increased number of prosecutions (although the Trac Report may indicate a somewhat different story here).  Perhaps another factor may be inflation, which will increase the amount of loss and thus the sentence issued by a court."

The sentencing memorandum in the Adelson case, now available, provides additional thoughts on the rationale by the court (Hon. Jed Rakoff), in his decision, to reduce the sentence below the guidelines. The Hon. Rakoff speaks to the incredibly low sentence (3 months) provided to a co-defendant, a sentence that the Government failed to appeal. He notes that those "who actually designed the fraud" received substantially reduced sentences through cooperation agreements. Some other highlights from this decision:

  • "But, as the Government  conceded, Adelson was not the originator of the fraud, and, as the jury found in effect.  Adelson did not participate in the fraudulent conspiracy until its final months."
  • "What this exposed, more broadly, was the utter travesty of justice that sometimes results from the guidelines’ fetish with abstract arithmetic, as well as the harm that guideline calculations can visit on human beings if not cabined by common sense."
  • "Numerous colleagues at Impath who personally suffered from the fraud here perpetrated nevertheless also wrote the Court on Adelson’s behalf, describing the defendant’s commitment to Impath and to its mission to improve the lives of cancer patients."
  • "[T]he evidence showed that Adelson was sucked into the fraud not because he sought to inflate the company’s earnings, but because, as President of the company, he feared the effects of exposing what he had belatedly learned was the substantial fraud perpetrated by others."
  • "In the end, the Court, confronted with an absurd guideline result that not even the Government seriously defended, and with inapt analogies to other cases and defendants, chose to focus its primary attention on the non-guidelines factors set forth in § 3553(a), including both those of general applicability and those that had special relevance to Adelson’s particular circumstances."

The court's decision provides a thoughtful and detailed breakdown and computation of the sentence. See here -

Download Adelson.doc

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/07/sentencing_form.html

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Comments

The government filed a notice of appeal of the Adelson sentence on 7/5/06.

Posted by: anon | Jul 21, 2006 8:38:38 AM

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