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September 9, 2008

District judge rejects plea deal calling for only probation for billionaire

As detailed in this Los Angeles Times article, headlined "Judge rejects plea deal for Broadcom co-founder Henry Samueli," a federal district judge yesterday refused to accept the government's suggestion that a term of probation was sufficient in a high-profile white-collar case.  Here are details from the LATimes article:

Suggesting that Broadcom Corp. co-founder Henry Samueli deserves to go to prison, a federal judge Monday rejected a deal with prosecutors that would have given the Orange County billionaire probation for lying to regulators about his role in an alleged $2.2-billion stock-option scam.

The government's allegations against Samueli, "if true, warrant a significant prison sentence," U.S. District Judge Cormac J. Carney wrote in an order delivered to Samueli, his attorneys and prosecutors at a hearing in Carney's Santa Ana courtroom. Under the terms of the plea agreement, Carney could only accept or reject the recommended sentence, not modify it.

The judge took aim in particular at an unusual provision in the plea accord calling for Samueli to pay $12 million to the government.  The maximum fine under the charge to which Samueli agreed to plead guilty is only $250,000. "The court cannot accept a plea agreement that gives the impression that justice is for sale," Carney wrote.  Accepting the agreement, he added, would "erode the public's trust in the fundamental fairness of our justice system."

Judge Carney wrote a thoughtful and detailed 22-page opinion explaining his decision, which can be accessed at this link.  Fascinating stuff.

September 9, 2008 at 10:37 AM | Permalink

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"Noting that Nicholas and Ruehle, if convicted, could theoretically be sentenced to more than 300 years each in prison, Carney added that people convicted in "run of the mill" frauds serve on average 17 months in prison. What's more, he said, the U.S. Probation Office's report on Samueli concluded that probation was insufficient and recommended a year in prison."

What's the rest of that story?

The two Henry T. Nicholases

Reconciling the indicted billionaire businessman with the anti-crime crusader.

Last week began and ended on high notes, sort of, for the billionaire Orange County crusader behind some of California’s most recent tough-on-crime ballot measures. On June 2, an anti-gang proposition that he is backing with $1 million from his personal fortune qualified as the sixth state measure (pdf) on the Nov. 4 ballot. That was joined on Friday by number nine, the centerpiece of his years-long public safety campaign – a proposed victims’ rights initiative (pdf) named for his murdered sister.

The days in between were, well, less triumphant. Indictments were unsealed Thursday by a federal grand jury in Santa Ana, accusing the tough-on-crime benefactor – Broadcom Corp. co-founder and former chief executive Henry T. Nicholas III – of securities fraud and multiple drug crimes.

Posted by: George | Sep 9, 2008 11:36:56 AM

This judge needs a HERO tag and a pat on the back.

Posted by: Daniel | Sep 9, 2008 12:13:13 PM

Would the same judge look at a plea where the USAO is stacking charge after charge and adding enhancements just to increase a sentence

What purpose does it serve putting him in jail for a year?

Posted by: | Sep 9, 2008 12:47:17 PM

Add a pat on the back to the Probation Office for their independent analysis which the Court found meritorious.

Posted by: mjs | Sep 9, 2008 1:01:26 PM

Everything about this case is delicious. Thwarted prosecutors hoping for the cash. A judge with principle and common sense. A defendant who has no virtue that I must defend. Thanks for the post

Posted by: beth curtis | Sep 9, 2008 10:04:24 PM

Totally on board but....if the good doctor was dirt poor and faced 300 years for the same charges, would the judge impose it?

Posted by: Z | Sep 9, 2008 11:21:08 PM

Z - good call, because poor defendants always get the better of it in criminal cases.

Posted by: NewFedClerk | Sep 11, 2008 8:20:50 AM

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