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May 1, 2009

Former GC for Gen Re gets relatively short prison sentence

This article from The National Law Journal, which is headlined "Former Assistant GC Sentenced in General Re Fraud Case," reports on a notable white-collar sentencing that took place yesterday.  Here are excerpts:

The former assistant general counsel of General Re Corp., Robert Graham, was sentenced Thursday to one year and one day in federal prison in a financial fraud case closely watched by in-house counsel nationwide.

Graham, 61, was found guilty last year of conspiracy, securities fraud, mail fraud and making false statements to the U.S. Securities and Exchange Commission. As part of his sentence, he was ordered to pay a $100,000 fine. He had faced a maximum sentence of up to 210 years in prison.

"Certainly, that kind of sentence seems more in line with a liability for a corporate failure than hundreds of years in prison," said Susan Hackett, general counsel for the Association of Corporate Counsel, of the sentence that Graham actually received.

Graham, who was senior vice president and assistant GC at Stamford, Conn.-based General Re from 1986 to 2005, will remain free on bond pending his appeal of his convictions. His lawyer, Alan Vinegrad, had sought a period of home confinement and community service....

The charges against Graham, who was senior vice president and assistant general counsel of Gen Re, were part of a 16-count indictment involving four other defendants at Gen Re and American International Group Inc.

This ABA Journal piece indicates that prosecutors were asking for a sentence of 230 years for Graham, but that does not sound quite right.  Still, I do think the prosecutors were seeking a much longer term and that Graham was the beneficiary of a significant downward variance.

May 1, 2009 at 03:49 PM | Permalink

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Comments

Prosecutors recommended 230 years? What did Graham do, take an Uzi to a busload of nuns?

(Actually I suspect his big crime was putting the feds to the annoyance of a trial. But for that, he might have successfully bargained for a year and a day on his own.)

See, this is what troubles me. Lawyers spending loads of time splitting hairs over fine points in mindlessly harsh sentencing policies.

Instead of tinkering with incremental fixes to the guidelines, wise brave stewards of a healthy democracy would acknowledge the guidelines have been misused routinely as a tool to coerce plea agreements. Then they would take the tool away from prosecutors.

Of course, we don't have many wise stewards. A healthy democracy requires informed, engaged citizens. And making a horror show of things is far easier than restoring normalcy.

Posted by: John K | May 2, 2009 11:56:05 AM

John,

These particular guidelines have been increased at the behest of Congress after Enron etc. Federal judges have been extremely lothe to follow them however.

I find this sentence saddenly leinient but that seems very common in white collar cases, especially corporate fraud cases.

Posted by: Soronel Haetir | May 2, 2009 5:48:48 PM

Soronel, four years ago I might have agreed the sentence was lenient.

Now I think public disgrace, loss of career and the indelible stigma of a felony conviction constitute severe punishments in and of themselves.

Now I think being caged for even a day, week or month, let alone a year and a day, can only be considered lenient by people who lack imagination and empathy.

Now I know the incendiary language agents and prosecutors pour into charging documents doesn't always square up with the acts that prompted the charges.

I also understand that agents and prosecutors in hot pursuit of the devil (white collar targets in this instance) aren't always careful to distinguish technical missteps and gray-area corner-cutting from intentional wrongdoing.

Worse still, they don't have to be careful; the broad, sweeping statutes they wield can easily cover the difference.

Fact is, not many businesses are capable of surviving intense scrutiny by the devil chasers in the Justice Department.

Posted by: John K | May 4, 2009 12:34:58 AM

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