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December 16, 2008

Another prominent white-collar defendant gets a big variance

As detailed in this early Bloomberg report, "Ronald Ferguson, the former chief executive officer of General Reinsurance Corp., was sentenced to two years in prison for helping American International Group Inc. deceive shareholders." Here are more details of what sounds like an interesting sentencing hearing:

Ferguson, 66, was the highest-ranking of five executives convicted for using a sham transaction in 2000 to help AIG improve its balance sheet. U.S. District Judge Christopher Droney in Hartford, Connecticut, also gave Ferguson two years of supervised release and ordered him to pay a $200,000 fine.

Droney, who ruled the fraud cost AIG shareholders as much as $597 million, could have sentenced Ferguson to life in prison.  “We will never know why such a good man did such a bad thing,” Droney said.  While Ferguson’s criminal conduct was “substantial,” he deserved leniency because of his history and character, the judge said. “I’ve never received such an outpouring for a defendant,” Droney said....

Ferguson deserved a “substantial” term, Assistant U.S. Attorney Eric Glover told Droney today, though he agreed that life “would not be appropriate.”...

Defense attorney Michael Horowitz asked Droney to impose “an unusually long period of supervised release or probation” that would allow Ferguson to work with the needy. Ferguson, who is studying to become an ordained minister, filed 379 letters asking for mercy and depicting him as decent, caring and honorable....

More than 30 Ferguson supporters filled the courtroom today.  Among those who spoke was Andrew Henry, general counsel of Colgate-Palmolive Co., where Ferguson was a director from 1987 to 2005; Jill Ker Conway, the former president of Smith College; and Ferguson’s wife of 46 years, Carol.  “I am begging you for mercy,” Carol Ferguson, who turned 66 yesterday, said to Droney. “I cannot imagine my life without Ron.”  She said her husband’s message for the past 50 years has been that, “you should do the right thing, even when it hurts, even when no one is looking.”

Based on the determined loss amount, the guideline range in this case must have been decades, not merely years.  (I heard one report that the PSR calculated a range for 14 to 17 years of imprisonment, and this Bloomberg report certainly suggests that the government was certainly asking for a lot more time than Judge Droney imposed.)

The prominence of the case, the amount of loss, the factors mentioned by Judge Droney, and the fact that Sentencing Commission Michael Horowitz represented Ferguson all add to the intigue and importance of this sentencing ruling for not just the defendant here, but also other prominent white-collar defendants.  And I cannot help but speculate that all the pro-discretion rulings coming from the Second Circuit recently played a role in the willingness of Judge Droney to give relatively little weight to the lengthy sentencing term urged by the guidelines.

Some recent related posts:

UPDATE:  As indicated in this comment and as now confirmed by another source, the guidelines were actually recommending a life sentence in this Ferguson case and the calculated offense level was 49, which is six levels higher than the highest recommended sentence.  Yeah, right, year those federal sentencing guidelines sure are presumptively reasonable for non-violent first offenders.  Hah!!

December 16, 2008 at 02:45 PM | Permalink

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Comments

the offense level was 49, 43 and above is life in prison. don't know why press reports have left this so unclear, because nothing has been clearer for over a month, ever since Droney ruled on the amount of loss.

The Guidelines called calculation was life in prison, period, no range, just life.

Posted by: anon | Dec 16, 2008 6:49:36 PM

At that level of loss involving a publicly traded company, life is automatic under 2B1.1.
Base offense level: 7
More than $400M loss: +30
More than 250 victims (i.e., shareholders): +6
Total = 43 (life)
You don't need to know the facts.
Good thing they're no longer mandatory.

Posted by: | Dec 18, 2008 2:56:33 PM

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Posted by: חלקי חילוף לרכב במרכז | Jan 3, 2011 8:13:08 AM

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