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August 2, 2009

Madoff's prison consultant speaks out

Herb Hoelter, the consultant who played a role in Bernie Madoff case (and runs the National Center on Institutions and Alternatives), has this new commentary in today's New York Daily News. Here is how it starts:

Bernie Madoff's 150-year prison sentence was an affront to the federal criminal justice system. There were a number of idiosyncrasies in his sentencing that even a seasoned expert could not have expected: the length of the sentence, the justification by the court for imposing the sentence and the evolution of a new term to describe people in my profession — "prison coaches."

I've been a professional federal sentencing consultant for more than 32 years.  I have worked with hundreds of white-collar offenders over the past 25 years — Madoff, most recently — whose punishments dramatically increased in direct proportion to the government trumpets of justice, punishment and deterrence.  Having lived through the past two decades of federal sentencing guidelines (no longer to be "presumed reasonable," ruled the Supreme Court this year), I know that the Madoff sentence was the crown jewel for the government.

In imposing sentence, however, the court ignored virtually all statutory sentencing principles and trumped the defunct federal sentencing guidelines.  The sentence was imposed, acknowledged Judge Denny Chin, for symbolic purposes, which violates the supposed blindfolds of our nation's justice system.

The sentence was, of course, within the law.  But being within the law does not always mean a sentence is appropriate.  Legal scholars will be hard-pressed to find a first-offender sentence of Madoff proportions — the maximum statutory term imposed on each count, to be served consecutively.

August 2, 2009 at 09:04 AM | Permalink


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The stress of imprisonment, with which I sympathize, would be remedied by 123D, with $6million in damage counting as a unit.

Posted by: Supremacy Claus | Aug 2, 2009 10:54:50 AM

I read the entire commentary and on balance, it makes a few meritorious points. There are two points with which I will quibble:

--his reference to Madoff as a "first offender" is misplaced and inordinately naive. It trivializes his massive and unmitigated 20 year fraud.

--his surprise and feigned indignation over being labeled a "prison coach" is either disingenuous or speaks of a need to " get out a little more".

Posted by: mjs | Aug 2, 2009 7:55:37 PM

It is difficult (even for a bleeding-heart liberal like me) to play devil's advocate for someone who's caused as much misery as Madoff.

Still, it strikes me as revealing of the narrow, innately punitive prosecutorial mindset to view each day of Madoff's existence over the past 20 years as a separate additional count of willful fraud. That's what, 7,300 counts of fraud (excluding any bogus, RICO derivative charges that might also apply)?

What if it started with a poor judgment and then unintentionally snowballed, always with the sincere intention to somehow cover the initial investment gaps and eventually to put things right?

Of course I realize mens re isn't what it was in the days before Nixon's Nazis, subsequent congresses, cop-team justices and a corps of "aggressive, creative" prosecutors went to work on it with (I love the line from "Pulp Fiction") a blowtorch and a pair of pliers.

But somehow I think delusion and denial must have been working as hard on Madoff as any criminal impulses he might have harbored...for whatever that's worth these days.

Posted by: John K | Aug 3, 2009 9:17:31 AM

The judge certainly made the national news and he has certainly distinguished himself. The sentencing guidelines must be something on the order of: "life expectancy in years times 100, minus 16 for giving ill gotten gains to charity, plus 8 for giving to the wrong charity, plus 80 for stiffing folks at the country club in Palm Beach where the judge's aunt Doe Doe had lunch once."

Posted by: mpb | Aug 3, 2009 9:18:45 AM

The column reads more like ad advertisement for "prison coaching" than a substantive commentary on the criminal justice system. There's a rather jarring transition starting in the fourth-to-last paragraph where the author switches from ranting about the criminal justice system to selling his services. For someone who claims to have 32 years of experience with federal sentencing, the author displays a good amount of ignorance about how it works.

1. The "first offender" reference made me laugh at my desk. Madoff is not some youthful offender who got caught up with some bad people and robbed a store or sold some drugs. Instead, he ran the biggest Ponzi scheme in history and admitted that he started in 1991. Perhaps the judge should have told him "I hope you learned your lesson this time. During your next 3 years in prison, I want you to think about what you've done and I hope that 23 years from now you're not back here being prosecuted for another massive Ponzi scheme."

2. I wonder what the author means by this: "Virtually all financial fraud crimes have victims, and the Madoff case wreaked havoc on thousands of people. But absent from the sentencing were the investors who made millions (even billions) of dollars from Madoff, and their investment advisers who sent their children to private schools on Madoff commissions." Yes, it is inherent in the way Ponzi schemes work that some people make money from them. Does the author mean to suggest that this mitigates Madoff's guilt somehow?

3. This is wrong and borderline illiterate: "The sentence was imposed, acknowledged Judge Denny Chin, for symbolic purposes, which violates the supposed blindfolds of our nation's justice system." Deterrence has been part of the criminal justice system for years. Not everyone likes it, and there are reasonable moral objections to the practice of making examples out of people, but to say that this "violates the supposed blindfolds of our nation's justice system" makes no sense. My understanding of the "blindfold" is that justice is meant to be free of prejudice and blind to things like race, class, religion, and influential friends, not blind to consequentialism and deterrence.

Posted by: anonymous | Aug 3, 2009 9:28:08 AM

Madoff's actions killed more people, by far, than the Chessboard Killer, and operated the largest financial scheme since Boss Tweed. He has remained arrogant and unapologetic from the start (except for the mandatory "I'm sorry for the harm I have caused" statement, on advice of his attorney). If this man did not receive the maximum, who realistically could?

Though Judge Chin's choice of words could have been better, I respect him for helping society to finally take white collar crimes seriously. Just because high-society criminals don't point a gun doesn't mean that their harm to society is any less.

Posted by: Res ipsa | Aug 3, 2009 1:05:22 PM

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