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May 27, 2006

Dramatic fraud sentencing lead to big upward variance

While I have been thinking a a lot about the Enron sentencings, on Friday in California there was lower profile white-collar sentencing that produced a (record?) high sentence.  Here are some details from this Los Angeles Times story:

Orange County money manager James P. Lewis Jr. was sentenced Friday to 30 years in prison for swindling 1,600 investors of $156 million in a Ponzi scheme so calculated and long-running that the judge called it a "crime against humanity."  Lewis slumped back in his seat as U.S. District Judge Cormac Carney pronounced the maximum sentence, rejecting pleas by Lewis' lawyer that it would be "a death sentence for a 60-year-old." Lewis turns 60 next month.

Carney calculated that 19 1/2 years in prison would be the most under nonbinding federal sentencing guidelines.  But he said those rules "never contemplated this kind of case."  For nearly 20 years, the judge noted, Lewis solicited retirement funds from investors who now face the prospect of humiliation and poverty in their senior years. "Obviously, Mr. Lewis has robbed you of security, peace of mind and the pursuit of happiness," Carney said. He added that when Congress set 30 years as the maximum sentence for mail fraud, "I just can't believe they could have conceived of a worse case than this."

The judge's decision was handed down after a four-hour, 20-minute hearing in a packed Santa Ana courtroom filled with weeping testimony from victims and Lewis' family, as well as angry outbursts from some investors.  Asked by the judge to address the court, Lewis delivered a rambling speech that began with apologies to his victims, saying he was "full of sorrow, shame and deep remorse."... As the sentence was read, one of Lewis' daughters screamed and burst into tears while many of the 60 other spectators applauded....

Defense attorney Scott M. Schlegel said he would appeal the sentence, saying it was cruel and unusual punishment for a man of Lewis' age.... The judge praised Lewis for giving up his right to a trial, which he said could have overwhelmed the already devastated investors.  Lewis pleaded guilty in October to one count of mail fraud and one count of money laundering.

I am pretty confident that, even in the Ninth Circuit, this long sentence will not be declared unconstitutionally cruel and unusual.  A closer question, however, might be whether this upward variance from the guideline range to the statutory maximum might be deemed unreasonable.  The fact the defendant pleaded guilty, but still got a max sentence that was more than 10 years longer than the guidelines recommended, might provide a basis for claiming unreasonableness.

May 27, 2006 at 07:57 AM | Permalink


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Reading of late about genocide and 'crimes against humanity' in international criminal law, I was appalled the judge would label this an instance of the latter. Such rhetorical intemperance is not appropriate for a judge at any level. Lewis' age, remorse and apology, the fact that he gave up his right to a jury trial and pled guilty, as well as the fact that some money has been recovered and there's a good chance that yet more will be so as well, would seem to suggest the sentence here was rather unreasonable. I trust the judge was not himself a Mormon (would that have been a reason to recuse himself?)....

Incidentally, I'm impressed at how quickly you posted this: before I picked up my copy of the Times at 5:30 am PST!

Posted by: Patrick S. O'Donnell | May 27, 2006 9:26:35 AM

You must be one of Lewis' relatives because you sure aren't one of his victims. The a$$hole stole $156 Million dollars from the elderly. He also stole their hopes and dreams. The judge did the right thing. There is justice in America.

ps, can't wait until Bubba gets a hold of him in prison!! Then we'll see how sorry he is!!

Posted by: Ice | May 28, 2006 11:57:43 PM

Do people get that this man literally stole people's lives by stealing what they devoted their time to - the only thing we really own? His victims gave up time with their families and friends. They gave up pleasures big and small. All to save for their families and elder years. His victims worked and contributed to society. Now many must ask for charity themselves. This was a 20 year, well thought out theft of people's lives. The misery he has caused is incalcuable. 30 years is too short.

Posted by: Dolores Cordell | Dec 22, 2006 4:13:13 PM

I'm the brother of Dolores Cordell, and I
feel the same loss as many others in this
trial as I also had a family member steal
my security of old age, as I'm now 80, and
had a son in law borrow money on my home
so he and my daughter would be here to help
me in my old age, if I became infirmed. Now
that daughter and son in law have left town,
and I'm stuggling to survive being swindled o
out of about $350,000. I retired with every
thing paid off when I was 66. But a wife
who got involved in using Meth was abusing me
and I could have been killed when she was on
one of her drugged out days.
I don't have any other family to lean on in
the area of Lancaster, CA so welcomed my
Daughter and her family to be near me, but
that was with the stipulation that I let
them borrow on my paid for home, for his
business. I'm sure many have fallen for this
problem to have help in our later years.
Fortunately I have no illness's at present,
and I'm running for President of the United
States for 2008 to save this nation from
being turned over to the United Nations New
World Order. We have treason in our government
and we must close our borders and protect this
nations sovereignty or else.

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