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June 2, 2006

Huge downward variance in white-collar case

As detailed in this article, a corporate president who faced a life sentence under the guidelines after a fraud conviction "because shareholder value fell by more than $260 million after the fraud scheme was disclosed," received an extraordinary break yesterday when sentenced to less than four years' imprisonment:

Former Impath Inc. President Richard Adelson of Montebello, who faced life imprisonment for lying to investors, was sentenced this week to 42 months in prison, fined $1.2 million and ordered to pay $50 million in restitution.  Adelson, 40, was convicted in February of conspiracy, securities fraud and filing false statements with the U.S. Securities and Exchange Commission. He was acquitted of seven counts, including two charges of soliciting a false proxy statement.

U.S. District Court Judge Jed Rakoff in Manhattan said that while federal sentencing guidelines recommended life in jail for Adelson, his crimes weren't comparable "to the kinds of situations that have led to 20- and 25-year prison terms."  Rakoff also agreed to allow Adelson, who was also Impath's chief operating officer, to remain free on $1 million bond pending his appeal.

I am not sure what I find more surprising about this case: that the guideline sentence was life or that Judge Rakoff went all the way down to 42 months.  Especially when the Ernon convictions put a new spotlight on white-collar sentencing, it will be interesting to see if the Justice Department will take this case to the Second Circuit.  I imagine DOJ will view this sentence as unreasonable, but it might worry that the wrong Second Circuit panel might not agree.

Whatever happens on appeal, this is another case reaffirming my instinct (detailed in some posts below) that white-collar offenders are getting the biggest post-Booker breaks.

June 2, 2006 at 09:21 AM | Permalink

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Comments

At least the corporate president was prosecuted.

I've just gone through 4 years of litigation against Sprint corporation where the corruption includes my reporting to state and federal authorities alleging their corruptly influencing the entire Missouri Supreme Court, criminal racketeering, mail fraud, internet fraud, evidence and witness tampering, perjury, subornation of perjury, conspiracy against rights, and other crimes including numerous violations of certain sections of the Sarbanes-Oxley Act of 2002.

So corrupt were the defendants that one legal expert exclaimed, "This may well be the most grotesque display of corporate corruption against a single individual I've ever heard of."

Yet Martha Stewart was prosecuted for two counts of lying to federal authorities and she wasn't even under oath at the time.

It would seem that if the authorities do not prosecute what is now a total of 26 defendants in my case including 7 state supreme court judges, a former state sumpreme judge acting as lead outside counsel, senior in-house counsel, a senior VP, director of labor relations, a regional HR manager, other managers, and two other corporations' counsels and agents, then the feds owe Martha Stewart an apology.

-John Stehno

Posted by: John Stehno | Jun 15, 2006 2:28:46 PM

Although it's incomplete, this should give the reader some idea of the magnitude of corruption I've encountered against Sprint.

The blog starts out, "Was the Missouri Supreme Court collectively incompetent, prejudice and partial, or were they corruptly influenced by the enterprise Sprint Corporation?"

http://perverted-missouri-justice.blogspot.com/

Posted by: John Stehno | Jul 16, 2006 9:29:15 PM

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