Friday, November 18, 2011

Fourth Circuit Affirms 100 Year Sentence

The Fourth Circuit issued an unpublished opinion affirming Defendant Okun’s convictions and 100 year sentence. U.S. Attorney, Neil H. MacBride, states regarding this opinion:

"Financial fraudsters make calculated, rational decisions, and the threat of spending as much as 100 years in prison can begin to change corporate culture and behavior. Today’s opinion confirms that it is just for fraudsters who rob the life savings of their victims to spend the rest of their lives – or at least a big chunk of it – behind bars."

Interestingly the court notes in its opinion that the defendant operated a "Ponziesque" scheme, resulting in losses in excess of $125 million dollars." The court notes that the defendant's conviction on twenty-three counts resulted in a sentence of "1200 months' imprisonment, a sentence 3600 months below the advisory Guidelines sentence."

Some may argue that judges are issuing below guidelines sentences in white collar cases. But this case demonstrates the absurdity of issuing guideline sentences. Do you know anyone who has lived 400 years? Is that reasonable?

(esp)(blogging from Washington, D.C.)

November 18, 2011 in Judicial Opinions, Sentencing | Permalink | Comments (1) | TrackBack (0)

Wednesday, November 16, 2011

"Baseless Disparities"?

Assistant Attorney General Lanny A. Breuer, in a recent speech to the American Lawyer/National Law Journal Summit spoke about what he considers disparities in sentencing. He stated:

"One area – though by no means the only one – in which we have seen significant disparities in sentencing in the last several years is financial fraud.    With increasing frequency, federal judges have been sentencing fraud offenders – especially offenders involved in high-loss fraud cases – inconsistently.   For example, a defendant in one district may be sentenced to one or two years in prison for causing hundreds of millions of dollars in losses, while a defendant in another district is sentenced to ten or 20 years in prison for causing much smaller losses."

Of course there are differences. Sentences should not be based solely on the crime or amount of loss involved.And yes, there are disaparities - there are disparities in the charging practices of prosecutors.  Lest us forget - we sentence people, not numbers, and people are different.

See also Mike Scarcella, BLT Blog, DOJ's Lanny Breuer Addresses Sentencing Disparities 

(esp)

November 16, 2011 in Prosecutors, Sentencing | Permalink | Comments (2) | TrackBack (0)

Thursday, October 27, 2011

Kevin Ring Alleged Government Sought False Testimony

A few months ago I wrote that "the widespread prosecutorial (and judicial) practice of giving favorable treatment . . . to those who cooperate with the government by informing, taping and/or testifying has had in many ways a pernicious effect on the criminal justice system, particularly in the white-collar area." See here.

The case of Kevin Ring, discussed last month by blog editor Ellen S. Podgor, see here, illustrates at least two detrimental effects: the harsh sentences sought by the government (and sometimes imposed by judges) against those who choose not to cooperate, especially those who exercise their right to trial, and the great pressure on potential cooperators to falsely implicate others in order to lessen their own sentences. Ms. Podgor briefly addressed the first in her blog. In this blog, I discuss the second.

Ring was the sole defendant to go to trial of the twenty indicted in the Abramoff lobbying scandal. He did so after he had thirteen proffer sessions with the government, but could not reach an acceptable plea and/or cooperation agreement. After a hung jury, at a retrial he was convicted of conspiracy, honest services wire fraud, and paying an illegal gratuity by providing meals and sports and concert tickets for political favors. He was sentenced by D.C. District Judge Ellen Segal Huvelle to twenty months yesterday, October 26.

In a sentencing letter, Ring (the editor of a book entitled Scalia Dissents, Writings of the Supreme Court's Wittiest) claimed that the government position on sentencing, which initially was for a sentence in the Guideline range of 17 to 22 years, and in other areas was retaliation for his failure to falsely implicate his friend and mentor, former Congressman John Doolittle, whose wife had been employed by Abramoff in an allegedly do-little job. He wrote, "[T]he prosecutors made it clear what I needed to say to get a deal. The prosecutors wanted me to say that Congressman Doolittle took official acts to help my clients because I gave him a stream of things of value, and if I had stopped giving him some things, he would have stopped taking official acts (or, at least, taken fewer acts). Saying these things would be a flat-out lie."

Further, he said, "It became clear at a certain point that since I was not willing to incriminate Congressman Doolittle and others that I was going to pay a heavy price. Despite my consistent statements about my relationship with Congressman Doolittle's office, the government eventually asked me to say things that were totally at odds with what I had told them." (Doolittle, interestingly, submitted a letter to Judge Huvelle seeking leniency for Ring.)

The government, as expected, denied Ring's accusation "categorically and unequivocally." "Ring's insinuation that the government was pressuring him to lie in order to implicate Congressman Doolittle seems particularly far-fetched," the prosecutors wrote. "To be clear, the government did no such thing."

I do not venture to assert who is now telling the truth -- Ring or the prosecutors. I do not know whether the prosecutors asked Ring to testify to a version of the facts they knew to be untrue, or even to a version they believed to be true which in fact was not. I do believe, however, that Ring's accusation is not as "far-fetched" as the government claims.

Prosecutors and agents not infrequently are married to the most sinister version of the facts. As Edward Bennett Williams once noted, when prosecutors look at windows, they do not see the view outside, but the dirt on the windowpanes. Although there are a few "rotten apples" among federal and state prosecutors who actually suborn perjury by urging cooperators (or other witnesses) to testify to facts the prosecutors know to be false, most prosecutors who put pressure on cooperators (or other witnesses) to implicate others are earnest, honorable lawyers acting in the good faith belief that the cooperator is holding back and that the version the prosecutors are pushing is what they believe actually happened. In effect, they intend to "suborn truth," that is, put heavy pressure on the cooperator to relate what the prosecutors actually believe is the truth.

To be sure, often the prosecutors are right: the cooperators are indeed protecting a colleague or friend or are minimizing the scope of their own wrongdoing. Often, however, the prosecutors are wrong: the witness is telling the truth and the whole truth.

The pressure on a potential cooperator who cannot truthfully testify as the prosecutors want (as Ring claims he was) is enormous. The potential cooperator is aware that unless the cooperator changes the story to conform with the prosecutors' version, the cooperator will be denied the coveted 5k1.1 "cooperation" letter which will very likely reduce (or perhaps even eliminate) a prison sentence. Some succumb to the prosecutors' importuning and falsely accuse another, and eventually testify perjuriously at trial (but, of course, are not prosecuted) and help convict innocent, or perhaps not so innocent, people. Some refuse to lie and the prosecutors, sometimes grudgingly, accept their story. Some refuse to lie (as Ring alleges he did) and suffer the consequences of not receiving a 5k1.1 letter, a favorable plea agreement and a lenient government posture on sentencing and other issues, and perhaps, as Ring has alleged, vindictive and harsh prosecutorial contentions.

It is unusual that a defendant in sentencing papers accuses the government of urging him to lie. Many defendants in the position Ring alleges he was choose at sentencing not to aggressively criticize the prosecutors out of fear of antagonizing them or the sentencing judges, who frequently tend to be hostile to allegations of prosecutorial overreaching, or perhaps because it has little direct relevance to sentencing. Indeed, Ring's able lawyers, Andrew T. Wise and Timothy P. O'Toole of Miller and Chevalier, apparently did not highlight this argument.

The issue of decent prosecutors pressuring cooperators to change their stories so as to provide testimony which falsely implicates innocent people, which Ring claims would have happened had he not resisted the prosecutorial pressure, is an important one, especially in white-collar cases.

It is an issue that has not had much exposure, primarily since white-collar defense lawyers who represent cooperators in their dealings with prosecutorial agencies (as almost every white-collar defense lawyer does) are hesitant personally or ethically to publicize it. It demands serious attention.

(goldman)

October 27, 2011 in Prosecutors, Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, October 21, 2011

Yesterday in Fraud

In an otherwise unremarkable bank and mail fraud affirmance, the Fifth Circuit reminds us that losses cannot be included as relevant conduct unless they are bottomed on criminal and/or fraudulent behavior. The appellant in U.S. v. Bernegger (loss must be criminally derived to count as relevant conduct), obtained two grants of $250K each from the State of Mississippi, which secured a first lien on the underlying collateral. Appellant later pledged the same collateral to other entities, but there was literally no evidence indicating that the original grants were procured through fraud. Nevertheless, the probation officer included the grants in the PSR's loss calculation and the trial court accepted the figure. The Fifth Circut also reiterates that "bare assertions" in a PSR are not, standing alone, evidence. This particular error did not affect appellant's Guidelines range, but did result in a reduced restitution award. The panel consisted of Judges Wiener. Clement, and Elrod. Opinion by the Dutchman.

(wisenberg)

October 21, 2011 in Fraud, Sentencing | Permalink | Comments (2) | TrackBack (0)

Thursday, October 13, 2011

Rajaratnam Receives Eleven Year Sentence

Hedge fund billionaire Raj Rajaratnam was sentenced today to an 11-year prison sentence, reportedly the longest sentence ever for insider trading, by Southern District of New York Judge Richard J. Holwell. The sentence was below the approximately 19- to 24-year sentence requested by the government and above the approximately six to eight years requested by the defense.

The Southern District United States Attorney's Office has focused its guns on insider trading offenses, bringing 52 cases in the last two years, 49 of which have resulted in convictions. U.S. Attorney Preet Bharara, who has called insider trading on Wall Street "rampant," has claimed that harsh insider trading sentences are a deterrent because they "convince rational business people that the risk is not worth it." Indeed, since an individual's decision whether to cross the line to trade on confidential information is often based on the individual's benefit v. risk analysis, insider trading may well be one of the relatively few areas of criminality where harsh sentences do actually serve as a deterrent. The Rajaratnam case, which involved a pattern of seeking inside information from tipsters and trading on it for millions of dollars in profits, and cases like it, should be distinguished from those cases which involve a single instance of insider trading based on a casual tip where the decision to trade is not so deliberate and therefore not so deterrable.

The 11-year sentence given to Rajaratnam is the second double-digit insider trading sentence imposed in the Southern District in the past few weeks. A few weeks ago, Judge Richard Sullivan sentenced Zvi Goffer, a former trader at Rajaratnam's firm, Galleon Group, to a 10-year term. While Rajaratnam's criminal involvement was of far greater magnitude than Goffer's, Rajaratnam had serious medical problems and a considerable history of good works, which may well have led to a lesser sentence than he would have received otherwise. Of course, some judges sentence more severely, or more leniently, than others.

(goldman)

October 13, 2011 in Insider Trading, Sentencing | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 20, 2011

Kevin Ring Sentencing

 Hon. Ellen Segal Huvelle issued a 42 page memorandum opinion regarding the sentencing of Kevin Ring. It was accompanied by a two page chart that includes what were the government recommendations in other related cases (here).  The court notes the sharp difference in recommendationbetween the government and defense in this case - a 17 year difference. The case comes from the Jack Abramoff lobbying scandal that caused several Greenberg Traurig lobbyists to "pled guilty to participating in an influence peddling and bribery scheme." 

A key issue raised by the defense is "that the government is retaliating against him for exercising his Sixth Amendment right to trial." The court notes that "the government cannot retaliate against defendant for exercising his rights."  The detailed sentencing methodology follows with the court's conclusion of a guidelines range of 46-57 months.

See also Doug Berman, Sentencing Law & Policy Blog here; Mary Jacoby, Main Justice, Judge Rejects Recommended Sentence for Ex-Abramoff Lobbyist

(esp)

September 20, 2011 in Fraud, Judicial Opinions, Sentencing | Permalink | Comments (0) | TrackBack (0)

Saturday, September 17, 2011

Eighth Circuit Affirms Rubashkin Case

One of the 2010 White Collar Crime Blog Awards went to the Sholom Rubashkin case. (see here).  It gave it a "collar  for the Case Most Needing Review - Sholom Rubashkin’s 27 year sentence."

The Eighth Circuit has now reviewed that case, but unfortunately for Rubashkin, with a result that does not change its prior outcome.  The court held that "Rubashkin did not make a timely recusal motion . . " and that "[a]fter studying the lengthy record we find no evidence that the district court's decision to remain on the case prejudiced Rubashkin's verdict."  The court also concluded "that Rubashkin's money laundering convictions were lawful and did not merge with any other of his crimes."  Finally, the court upheld the sentence, saying that "the district court's loss calculation" was not error.  The Eighth Circuit states, "[s]entences within the guideline range are presumed to be substantively reasonable."

And so for now, Rubashkin's 27 year sentence remains. Top law professors who are key sentencing experts wrote an amici brief in this case, in support of Rubashkin. Hopefully, the Supreme Court will re-examine this case.

Opinion here.

See Linda Friedman Ramirez, International Criminal, Extradition and Immigration Defense News, White Collar Crime: 8th Circuit Affirms Rubashkin's Conviction and Sentence (Agriprocessor Fraud Offenses)

See also Doug Berman, Sentencing Law & Policy, Eighth Circuit panel unanimously affirms Rubashkin federal convictions and lengthy prison sentence

(esp)

September 17, 2011 in Judicial Opinions, Sentencing | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 24, 2011

Eleventh Circuit - Mortgage Fraud Judgment Vacated and Remanded for Re-Sentencing

In United Staets v. Singletary, the Eleventh Circuit looked at issues of loss amount in a mortgage fraud decision. The Federal Defender's Office for the Middle District of Florida (with special thanks to Steven Kruer, chief paralegal) writes:

"Anyone with a mortgage fraud case presenting issues of loss amount or restitution payable should read this published decision from Monday, August 15, 2001, in which the Eleventh Circuit vacated the judgment and remanded for re-sentencing.

"In reversing, the Court noted that the government had the burden of proving, with respect to each of the mortgages for which it sought restitution, that the mortgage was the product of a fraudulent misrepresentation, and that it had not met this burden.  The district court’s statement in the restitution order that “restitution of at least $1,000,000 has been established by the Government” did not identify the mortgages that had been fraudulently obtained and caused losses totaling that sum.  To enable meaningful appellate review, the Court wrote, a district court’s calculation of restitution must be supported by specific factual findings. The district court failed to carry out this task, the Court held, and thus vacated the restitution provisions of the Singletarys’ judgments and remanded the case so that the court could perform this task.

In remanding, the Court wrote: 

We do so with this caveat: the Government is not receiving another bite of the apple. The district court shall render the necessary findings of fact and conclusions of law with respect to each of the 56 mortgages at issue on the basis of the evidentiary record as it now exists.

(esp)(reprinted with permission of the PD's Office MD Fl.)

August 24, 2011 in Judicial Opinions, Mortgage Fraud, Sentencing | Permalink | Comments (1) | TrackBack (0)

Monday, August 1, 2011

Op-ed on Fraud Guidelines

A must-read op-ed by James Felman and Mary Price in the National Law Journal titled, Four reforms would restore common sense to sentences that have become draconian, disproportionate to the crimes.

(esp)

August 1, 2011 in Fraud, Sentencing | Permalink | Comments (0) | TrackBack (0)

Thursday, July 28, 2011

Chiesi Sentenced to 30 Months

Danielle Chiesi, the former beauty queen, hedge fund trader, and fount of inside information to Raj Rajaratnam, was sentenced last week to 30 months in prison. We had blogged about her earlier. (see here)

Ms. Chiesi, who had extracted information from lovers and passed it on to Rajaratnam, was described by United States Attorney Preet Bharara in interesting imagery as "the vital artery through which inside information flowed between captains of industry and billionaire hedge fund managers."

The 30-month sentence was three months greater than that imposed on her former lover and boss, Mark Kurland, whom she blamed for involving her in criminality. Ms. Chiesi had specifically asked for a sentence equal to or lesser than Mr. Kurland’s. The government sought a sentence within the advisory guideline range of 37 to 46 months.

Retaining her sense of style to the end, Ms.Chiesi wore an atypical outfit for a defendant about to be sentenced, a sleeveless pink dress and matching pumps. And, after the sentence, alluding to her early morning arrest, she told the FBI agents at the prosecution table that the next time they knocked on her door they should do it in the afternoon. I suspect that she’ll be up early for the next 30 months.

(Goldman)

July 28, 2011 in SEC, Securities, Sentencing | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 20, 2011

Apprendi Applies to Alternate Fines Act - Corporate Fines Require Jury Determination

In the Northern District of California, the court in United States v. Au Optronics Corporation, et. al (AUO) was faced with the question of whether Apprendi applied to criminal fines that the government was seeking under the alternative fine statute, 18 U.S.C. s 3571(d). The company and nine individuals were charged with price-fixing in violation of the Sherman Act. A Superceding Indictment claimed that the government would seek a criminal fine against the corporate defendants (not the individuals)  under the alternative fine statute, which would mean that "the government could seek a fine in this case of up to $1 billion against AUO." The government sought bifurcation into separate guilt and penalty phases and also sought an "order that the evidence presented in the penalty phase need not be presented to a jury."  In essence they were arguing that Apprendi did not apply here.  

The court saw it differently then the government. Initially two circuits had found that Apprendi applied and even a declaration of the antitrust division had said it was applicable with fines.  Then came the case of Oregon v. Ice, where the Court held "that a judge could impose consecutive sentences without any jury findings beyond those of guilt."  Following this decision, the First Circuit found that criminal fines were exempt from Apprendi.

The government argued here that the First Circuit decision should be followed because "under historical practices fines fell within the sole discretion of the trial judge."

The problem for the government, however, is that they were relying on dicta from the Ice case.  Thus, the court in AUO held that Apprendi's mandate applied here.  Hon. Illston states, "[t]he magnitude and primacy of such punishment puts it in a separate class from an ordinary criminal fine imposed against a defendant who faces incarceration." (the government was seeking a fine that could amount to $1 billion, which is "ten times more than the fine authorized by the Sherman Act")

The court also denied the government's request to bifurcate the trial into a guilt phase and penalty phase, stating that "the Court is disinclined to bifurcate without a more substantial showing that a separate penalty phase will save judicial resources."

Court's Order - Download July 18 2011 Order re bifurcation motion

There are two lessons for the government here  - 1) there are consequences to overcharging, and 2) stop wasting money.  

(esp)

July 20, 2011 in Antitrust, Judicial Opinions, Sentencing | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 28, 2011

Sentences Beyond a Lifetime

Benjamin Weiser, NYTimes, Judge Explains 150-Year Sentence for Madoff has a fascinating story of some of the surrounding conversations prior to the Madoff sentencing. But there is one aspect that continues to trouble me when sentences given are beyond the lifetime of the individual serving the sentence - that is, does this undervalue our sentencing process. Some may claim that it sends a more pronounced message when the sentence is of such a stinging length. And clearly a long sentence was warranted here. But what does it say about our sentencing process when individuals are given sentences that are not only beyond the lifetime of the defendant, but also beyond any person's lifetime. I have to wonder if it makes a mockery of the sentencing process.

(esp)

Addendum - Doug Berman, Sentencing Law & Policy,Judge Denny Chin and Bernie Madoff talk about a sentence of 150 years

June 28, 2011 in Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, June 17, 2011

NACDL's 1st Annual West Coast White Collar Conference, “Turning The Tables On The Government” – “From Push to Shove: Defending Against Higher Sentences,” Friday, June 17, 2011

Guest Blogger: Darin Thompson, Assistant Federal Public Defender, Office of the Federal Public Defender (Cleveland,OH)

The seminar closed with a discussion of sentencing strategies. Moderated by Jeffery Robinson, the panel consisted of David Angeli, Ellen Brotman, U.S. District Court Judge Robert T. Dawson, Vito de la Cruz, and Jan Nielsen Little.

Mr. de la Cruz started the discussion by suggesting that because the guidelines still carry considerable weight, plea agreements should (where possible) be negotiated to impose a statutory cap on the possible penalty. With regard to the guidelines, Mr. de la Cruz discussed looking at the way in which the guideline was drafted. If the guideline was not based upon a Sentencing Commission study and empirical evidence, the case law is clear that the district court can reject the guideline based upon policy alone.

Ms. Brotman seconded those comments, and noted the excellent resources made available by federal defender offices to assist in analyzing whether the guideline at issue may be subject to challenge on this basis.

Judge Dawson noted the reason behind the guidelines was to establish some sense of fairness between sentences, but were intended to be recommendations only. Post-Booker, the “real work” at sentencing is with regard to variances.

Mr. Angeli suggested that the “deconstructing the guidelines” approach may be effective with regard to 2B1.1 guidelines, because those guidelines have not evolved due to careful Sentencing Commission study. Ms. Brotman followed up by noting that this kind of attack should be supported by empirical evidence in favor of the sentence that is being sought, rather than just relying on omissions by the Sentencing Commission. She additionally noted that the initial research upon which the guidelines were based was flawed, because it only included defendants who were sentenced to prison.

Mr. Angeli discussed Pepper v. U.S., a Supreme Court case which held that post-1st-sentencing, pre-re-sentencing rehabilitative efforts can be taken into consideration. He noted that the Court held that the sentencing guideline which did not make good policy sense could and should be disregarded. The holding in Pepper suggests that a number of other policy statements are now subject to challenge.

Ms. Little noted that the Sentencing Commission has compiled a huge variety of statistics, available on their website, which can be used to make arguments for lenience. For example, she noted that statistics supporting a relatively high frequency of variances with regard to similarly situated defendants can be cited to request a similar variance. Ms. Brotman suggested that the Sentencing Commission can remain relevant by making this information even more readily available.

Ms. Brotman discussed the application of the four purposes of sentencing listed in 18 U.S.C. 3553 apply to white collar cases. The negative use of the same factors by the government was discussed by Mr. Robinson and Ms. Little.

Ms. Brotman discussed the Ninth Circuit’s review of white collar sentences, and noted with concern that a number of the Judges have expressed that discretion in white collar cases should be reined in because Judges are more inclined to be sympathetic to white collar defendants because they are more likely to actually be similar to them with respect to their background.

The panel noted (with audience agreement) that Assistant United States Attorneys are almost uniformly asking for guideline sentences. Ms. Brotman noted that this rigid policy often eliminates them from the discussion regarding the appropriate sentence.

(dt)

June 17, 2011 in Conferences, Sentencing | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 15, 2011

Will the “Blame the Man” Claim Help?

Danielle Chiesi, the Wall Street blond bombshell who gave new meaning to the term “insider trading” by extracting from sexual partners confidential information which she relayed to convicted inside traders Raj Rajaratnam and Mark Kurland, is reportedly seeking a downward variance from a Sentencing Guideline range of 37-46 months, in part because her wrongdoing resulted from her “toxic” sexual relationship with Mr. Kurland. Ms. Chiesi’s sentencing memorandum highlights a letter from her current boyfriend which contends that Mr. Kurland, her twenty-year lover, exploited her and turned her into his “virtual servant.” Ms. Chiesi seeks to be sentenced to no more than the 27-month term that had been imposed upon Mr. Kurland.

Ironically, one of Ms. Chiesi’s lovers/sources, former IBM executive Robert Moffatt, now serving a six-month sentence for providing confidential information to Ms. Chiesi, at sentencing blamed Ms. Chiesi for manipulating him.

It will be interesting to see whether this “blame the man” explanation strikes a responsive chord with sentencing Judge Richard J. Holwell. Historically, women have received more lenient sentences than men for similar conduct, and the “blame the man” defense frequently worked at sentencing. However, that record was largely compiled with a male-dominated judiciary where some might have condescendingly viewed women as the “weaker sex.” Given changing societal and judicial views (and non-discriminatory mandatory sentences and sentencing guidelines), I suspect that differential has diminished considerably.

(Goldman)

June 15, 2011 in Insider Trading, Sentencing | Permalink | Comments (1) | TrackBack (0)

Monday, May 23, 2011

President Obama Grants Eight Pardons

It is good to see that President Obama is using his pardon powers, granting eight pardons this past week. (See Press Release here) Clearly more pardons would have been better as there are many suffering from the collateral consequences of a conviction that should not have happened. Likewise, there are many that have significantly reformed their lives and are deserving of a second chance.    Some observations about these pardons:

  • Four of the eight included a conspiracy count.
  • Three of the eight had a drug related charge.
  •  The largest sentence that had been given in any of these offenses was five years.
  •  Four had a sentence of no prison time.
  • The most recent sentencing from these cases was 2001.
  • Seven of the eight cases were prior to 2000.
  • Only two cases were from the same state, that being Indiana.

An important question to ask is whether any of these cases should have been criminal activity in the first place. Did we really need to send someone to prison for "the possession and sale of illegal American alligator hides" in violation of the Lacey Act?  Would a civil fine have been sufficient?

(esp)

May 23, 2011 in Government Reports, Money Laundering, News, Prosecutions, Sentencing, Verdict | Permalink | Comments (3) | TrackBack (0)

Friday, May 6, 2011

20th Annual National Seminar on Federal Sentencing Guidelines - The Presentence Report and the Sentencing Process

A box lunch was provided with an allstar panel discussion and video. The topic was the presentence report and the sentencing process. Moderating this session was W. Carl Lietz, III (Kish  & Lietz).  The panelists were Hon. Donna Elm (Federal  Public Defender - Middle District of Florida), Laurel Moore Lee (AUSA - Middle District of Florida), Tess Lopez (Sentencing Mitigation Specialist), Ray Owens (Assist. Chief Deputy US Probation - Middle District of Florida), and Adrienne Wisenberg (Barnes & Thornberg).  Some comments:

  • See probation early. (Tess Lopez)
  • Remember that the prosecutor now has to deal with the Victims Right Act & statutory obligations. (Laurel Moore Lee)
  • You need to prepare your client. Spend time with client on what things to avoid saying for getting an acceptance of responsibility.  You may not want the client to speak to preserve appellate issues (Donna Elm)
  • Prosecutors give information about the case to the probation officers (Laurel Moore Lee/Ray Owens)
  • Go to the interview with your client and participate - give your version of the incident - be an advocate.  Discuss in advance any objections you may have and correct inaccuracies in the report. (Adrienne Wisenberg)

Two highlights of the program:

  • Adrienne Wisenberg talked about character letters and how it is important to have them providing specific instances that tell the story of the client.
  • Donna Elm presented a sentencing video that was POWERFUL.

These highlights show the importance of getting a judge to understand exactly who is your client, why your client committed this act, and why this individual deserves a lesser punishment. 

(esp)

May 6, 2011 in Conferences, Sentencing | Permalink | Comments (1) | TrackBack (0)

Thursday, May 5, 2011

20th Annual National Seminar on Federal Sentencing Guidelines - Sentencing Issues in Securities Cases

This was an extremely high-powered panel, with Hon. Frederic Block (E.D. N.Y.) serving as the moderator. 

Giving background on securities fraud sentencing was Alexandra Walsh (Baker & Botts). She noted that the biggest driver is "loss" with as many as 30 points added, and with first offenders being eligible for extraordinary sentences. As long as "loss" has such a huge influence and as long as there are judges who will look at the circumstances  -  there will be disparity.  She asked what will be the Commission's response - will they scale back these sentences?  Judge Block noted how easy it is to get life for a securities fraud sentence. 

Providing history of how we got here - Peter S. Spivack (Hogan Lovells) used the case of Jamie Olis (background see here). He told how each new piece of legislation increased the possible sentence.

Judge Block noted how Dura Pharmaceutical set the standard of "loss" in civil cases. Speaking about post- Dura, Hank Asbill (Jones Day) noted how the 5th Circuit looked at "loss" and how it was developed in civil cases.   But the 9th Circuit in Berger took a different position as noted by Judge Block. They chose not to use the civil fraud standard.  Hank Asbill showed a flaw here when he asked - how do you determine the harm to society? He noted how the court gave Berger himself a break. But other cases in the 9th Circuit may not be agreeing with Berger. As noted by Judge Block - "we are dealing with fuzzy stuff."  Judge Block then mentioned the Dodd-Frank Act which seems to have language more like Berger, as opposed to Dura.

Michael Horowitz (Cadwalader Wickersham & Taft, LLP)  was asked whether the Sentencing Commission has to scratch Dura.  It sounded like the Commission will address this issue this coming summer. But where should the Commission go -  on one hand there is a view to raise the guidelines (tough on crime), yet another view is to think beyond incarceration.  Judge Block questioned whether the Commission was giving judges real guidance here.

The Department of Justice (DOJ)  person on this panel was Daniel Braun, Assistant U.S. Attorney in the Southern District of NY (starting of course with the typical DOJ disclaimer that he was not speaking for the dept.). He noted that with increased discretion you get broader differences in sentences. He spoke to the letter of Jonathan Wroblewski, Dir. of Policy and Legislation, DOJ.  He stated that this letter was not focused on individualized cases but rather on the broad differences in sentences. (There had been criticism that the letter singled out some specific cases)

Michael Horowitz noted how in the Adelson sentencing, the judge (Judge Rakoff) specifically asked the AUSA if life was an appropriate sentence. Which of course the AUSA could not answer. (Background on Adelson - see here)

Judge Jed Rakoff, speaking next, noted that the guidelines don't capture -  what kind of human being do you have in front of you.  He said that bad guys who make serious mistakes deserve to rot in prison, but he felt different about good guys who make serious mistakes.

Hank Asbill looked at what should a defense attorney do -  he looked at issues of change of venue (are you leaving a more favorable judge?).  He mentioned the Pepper case (see background here) as to whether the court could consider post-arrest variances. Things that were banned from the guidelines, now come back into the game. The panel ended on a somewhat humorous note - with the telling about an Israeli study that showed that favorable sentences were after the judge had eaten.

Bottom line - this was an incredible lineup of speakers, an incredible panel - hats off again to Kevin Napper (Carlton Fields) for putting this one together.

(esp)

May 5, 2011 in Conferences, SEC, Securities, Sentencing | Permalink | Comments (0) | TrackBack (0)

20th Annual National Seminar on Federal Sentencing Guidelines - Intro

Opening remarks for the seminar were by Kevin Napper (Carlton Fields) & Ted Simon (speaking on behalf of NACDL)- Although I was not there, Ted Simon tried to discern the diversity of the audience.  He asked - "how many believe in the concept that a federal sentence should be sufficient but not greater than necessary"- he received a response of a lot of hands.  He next asked - "how many are dedicated to the concept that a federal sentence should be 'something, but not greater than as little as possible'" - he received laughter.  He next asked - we can't ask the question of how many believe that a federal sentence is insufficient, even if greater than the statutory maximum. 

He noted that the conference included a diverse, rich, talented, experienced, pool of participants. He called the seminar "unequivocally the leading federal sentencing seminar in the country."  He said it was a seminar composed of the leading federal court probation specialists, jurists, prosecutors, and professional officers on all sides of the issues - "all the essential ingredients of the sentencing stew" and a program where everyone can learn and perform their respective roles better. And of course he gave a plug to join NACDL.

Hats off to Kevin Napper, Carlton Fields, for putting together an incredible lineup and conference.

(esp)

May 5, 2011 in Conferences, Sentencing | Permalink | Comments (0) | TrackBack (0)

Friday, April 1, 2011

Downward Variances at the District Court: Beware of Pyrrhic Victories

This week's Sentencing Guidelines opinion from the Third Circuit in United States v. Negroni underscores the importance of forcing district courts to create an adequate record at sentencing hearings. Paul Negroni and James Hall IV pled guilty to mail and wire fraud, among other crimes. They were knowing participants in a massive fraud scheme. Hall's original Guidelines range was 87-108 months, reduced to 46-57 months after the district court struck Paragraph 45 of the PSR, which had provided the factual support for a 6-level "250 or more victims" enhancement. The judge then downwardly varied to a 15 month sentence. Negroni's Guidelines range was 70-87 months. The judge downardly varied to a probated sentence with 9 months home detention. The Third Circuit vacated both sentences, because of the procedural unreasonablemess of the downward variances, and remanded for resentencing, I have commented previously on the disturbing trend in federal circuit courts of reversing downward variances based on alleged procedural irregularities, thereby gutting Gall and Kimbrough. The Fourth Circuit is particularly notorious for this.

But district judges must step up to the plate and do their part. In Negroni, the sentencing court struck Paragraph 45 of Hall's PSR, but clearly failed to articulate on the record its reason for doing so. The district court also failed to adequately articulate the substantial downward variance it granted to Negroni. Instead, like so many sentencing judges, it rather rotely recited the Section 3553 factors without intelligently discussing most of them or specifically applying them to the facts of Negroni's case and personal history.

It is really not that hard for a district judge to make an adequate procedural record. Defense counsel must force the sentencing court to discuss each Section 3553 factor and apply it in some fashion to a defendant's unique circumstances. How does counsel do this? By literally providing, in writing and in advance, a paint-by-numbers guidebook for the court. I do not know if that was attempted in Negroni. Perhaps it was. It is not always psychologically easy, in the midst of a hearing, to convince a judge who is ruling in your favor to touch all the bases. But don't kid yourself--the circuit courts are waiting, and itching, to send these babies back. Better to educate the district court beforehand, through your sentencing memorandum, about the procedural requirements for a downward variance.

Here is the opinion. Hat tip to Greg Poe for sending this decision our way.

(wisenberg)

 

April 1, 2011 in Fraud, Sentencing | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 15, 2011

Weyhrauch Mail Fraud Case Finally Dismissed

As noted here (KTUU.com, Weyhrauch Gets Fine, Probation in Corruption Case Plea) and also Becky Bohrer, Anchorage Daily News (AP),Weyrauch Gets Suspended Jail Sentence, $1,000 Fine , the Weyhrauch case is finally being resolved.  But lets look at what is happening here -

Weyhrauch was initially charged with an individual named Kott, who is now awaiting a ruling on whether his case will be dismissed for discovery violations. Perhaps we have a preview of the reasoning of the Ninth Circuit Court of Appeals by the decision last week in the Kohring case that found that the government had failed to provide Brady material to the defense. (see here, here, and here).

Weyhrauch's case went to the Supreme Court as one of three cases being examined as part of the "honest services" doctrine that prosecutors stretched to a point that the Court decided to place new limits upon -- requiring a showing of  "bribery and kickbacks."  In its ruling in Skilling, the Court did not directly address the question raised in the Weyhrauch case as to whether you needed a violation of state law for a mail fraud charge that uses honest services.  Rather the Court reframed the question with a new test of "bribery or kickbacks."  (see also here)

Now Weyhrauch is back in court pleading to the charge noted in the articles above.  In dismissing the federal case against him he filed a non-opposition to the motion to dismiss as follows:

"Weyhrauch non-opps the motion to dismiss for two reasons.  First, this was a very weak case from the beginning and all the evidence the government ever really had was that Weyhrauch had participated in, aided, or abetted a lobbyist engaging as a lobbyist without being registered.  See, attached Exhibit 1, Information and Plea Agreement.  Now that Weyhrauch has pled to that crime in state court, there are no longer facts to support a federal indictment.  Second, Weyhrauch believes there is evidence to support dismissal of the indictment because of "misconduct before the grand jury which returned the indictment against Weyhrauch." (reference to a letter filed under seal), which is filed under seal because it refers to grand jury testimony and other grand jury proceedings.  If the standard is that dismissal is appropriate when the ends of justice are served, then this case qualifies by any measure."

The more important question is:  Did the ends of justice warrant the federal government using the mail fraud statute to bring this alleged state case in the first place?

(esp) 

March 15, 2011 in Fraud, Prosecutions, Prosecutors, Sentencing, Settlement | Permalink | Comments (0) | TrackBack (0)