Saturday, June 3, 2006

White Collar Sentencing

Professor Doug Berman in his wonderful sentencing blog describes here a recent decision of  District Judge Jed Rakoff.  He states that "a corporate president who faced a life sentence under the guidelines after a fraud conviction 'because shareholder value fell by more than $260 million [SEE BELOW] after the fraud scheme was disclosed,' received an extraordinary break yesterday when sentenced to less than four years' imprisonment." Professor Berman describes on his blog, the case of former Impath Inc. President Richard Adelson. (he cites also to an article on this case here)

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.

A second aspect to consider here is whether white collar offender sentences are being questioned by judges in this post-Booker to a greater degree than other sentences.  Should this send a signal to the Congress that these sentences need to be reevaluated? In the desire to crackdown on white collar crime, did Congress go a bit too far.


Addendum - In reviewing the AP story here it appears that the prosecution claimed the loss to be as stated above, but that Judge Rakoff found otherwise.  The story notes that the court also  "fined [the accused] $1.2 million and ordered [ ] pay[ment of] $50 million in restitution."  The restitution finding says it all.

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