Sentencing Law and Policy

Prosecutors seeking long prison term for ex-Rep. William Jefferson

As detailed in lots of media coverage, federal prosecutors are seeking a long prison term for former US Representative William Jefferson following his bribery convictions.  Yet, as these different headlines from different press sources reveal, it is not perfectly clear how long a prison term prosecutors are seeking:

• This AP piece is headlined "Govt asks 27 years in prison for ex-Rep. Jefferson
• This Politico piece is headlined "Feds seek 30 year sentence for William Jefferson"
• This BLT piece is headlined "Prosecutors Want 33 Years for Jefferson"

I suspect this variation in reporting is a result of the government's guidelines, which prosecutors are likely stressing because they produce a range of 324-405 months of recommended imprisonment.

The piece from The BLT reports on how Jefferson's lawyers are countering the prosecution's sentencing recommendations:

Jefferson’s lawyers issued their own sentencing memorandum ... asking for a sentence of less than 10 years.  The memo notes that no member of Congress has ever been sentenced to more than 100 months in prison, and that other sentences in the Jefferson investigation have been less than a decade.

Bernie Kerik enters plea deal providing him a different perspective on homeland secutiry

As detailed in this New York Times article, Bernard Kerik today pleaded guilty to eight charges including tax fraud and lying to White House officials. Kerik, who lead the NYPD through the 9/11 attack and was taped in 2004 to head the Department of Homeland Security, was able to secure a plea deal with a specific sentencing recommendation:

The prosecution and the defense recommended that the judge, Stephen C. Robinson, sentence Mr. Kerik, who faced up to 30 years in prison on the most serious charge, to 27 to 33 months. The judge, who is not bound by the recommendation, set sentencing for Feb. 18. Mr. Kerik was also ordered to pay restitution of nearly $188,000.

The tax fraud charges stemmed in part from Mr. Kerik’s acceptance of $250,000 in renovations to his Bronx apartment, provided by a company accused of having ties to organized crime. He also admitted lying to White House officials, denying improprieties, while he was being interviewed to be head of the Department of Homeland Security.

As Booker approaches five, the individual/equal justice debate continues on

Remarkably, in just a couple of months, we can mark the five-year anniversary of the Supreme Court's decision in Booker to transform the federal sentencing guidelines from legal mandates to advisory rules.  The the debates over federal sentencing rules and results have taken many forms over these last five years, this new article from the Wall Street Journal spotlights that the most enduring issue remains whether Booker strikes a sound balance between the competing goals of individual justice and equal justice. 

The new WSJ piece is headlined "Looser Rules on Sentencing Stir Concerns About Equity," and it gives particular attention to potentially disparate white-collar sentencing outcomes after Booker. Here are excerpts:

[L]andmark Supreme Court cases in 2005 and 2007 ... gave federal judges more freedom to depart from sentencing guidelines. But this relatively new latitude has caused a thorny problem to creep back into the federal system: Defendants can receive wildly different sentences for similar crimes.

"There is preliminary evidence of greater inconsistencies between judges, who have the freedom to draw upon their own political, policy and punishment values when they make sentencing decisions," says Ryan Scott, a law professor at Indiana University who has studied sentencing behavior by federal judges....

Proponents of greater sentencing discretion say past rules were too inflexible, preventing judges from using their expertise to fit the punishment to the crime.  But others warn that the new freedom risks a return to the problem that prompted Congress to call for uniform sentencing guidelines in the late 1980s: that defendants' fates will be subject largely to the whims of individual judges.

Since sentencing parameters were relaxed, early indications suggest that judges on balance are using their discretion to give longer white-collar sentences.  Average prison sentences for fraud increased to about two years in the nine months ended in June 2009.  That is six months longer than fraud sentences for the same period five years earlier, according to data from the U.S. Sentencing Commission, a federal agency.

But in some cases, judges have handed down much lower sentences than would have been required by law just a few years ago....   The new level of unpredictability has drawn the ire of some prosecutors and defense attorneys worried about inequitable sentencing.

For white-collar cases in particular, "we're back to a pre-guidelines era," says Frank Bowman, a law professor at the University of Missouri who helped shape federal sentencing guidelines in the mid-1990s.  "You see the most disparity and the most potential for disparity, and I think that's a bad thing."

Alan Vinegrad, a former U.S. attorney in Brooklyn who is now a defense lawyer, counters that being able to customize sentences can increase fairness in the judicial process, even though there is more uncertainty in the courtroom.  "To me," he says, "that risk is tolerable."

Concern that the relaxed guidelines are creating unfair disparities appears to be growing.  In June, U.S. Attorney General Eric Holder said in a speech that it was important to assess whether recent sentencing practices "show an increase in unwarranted sentencing disparities" based on "differences in judicial philosophy among judges working in the same courthouse."

District judge and lawyers not sure what to do in Nacchio case after sentence reversal

This notable local report concerning a high-profile white-collar resentencing proceeding highlights an all too common problem after a circuit court reverses an initial sentence in a complicated case:

A re-sentencing hearing date could not be set for convicted ex-Qwest CEO Joe Nacchio on Friday after the judge and attorneys puzzled over the scope of the appeals court ruling that sent the case back to district court.

The U.S. 10th Circuit Court of Appeals tossed out Nacchio’s six-year sentence on insider trading in July. The ruling left him convicted on 19 felony counts but found that the lower court erred when it calculated the financial scale of Nacchio’s crime....

The 10th Circuit appeals court found that Nottingham incorrectly based his sentence on the total stock sale instead of just Nacchio’s financial gain connected to the information Nacchio did not make public. A smaller financial gain could, under federal sentencing guidelines, mean less prison time and a smaller fine for Nacchio.

U.S. District Court Judge Marcia Krieger, the prosecution and defense had different ideas Friday about how broadly Nacchio’s sentence could be reconsidered.

Federal prosecutors and Nacchio’s defense lawyers will have until Nov. 2 to reach agreement or file arguments on whether all factors in the case should be considered in resentencing Nacchio, or whether the 10th Circuit’s decision left Krieger a narrower set of factors to consider.

Krieger scheduled court dates out to Jan. 2, 2010, but didn’t set a sentencing hearing. Krieger said she can’t set a sentencing date without knowing whether hearings over evidence or witness testimony will be necessary.

"White Collar Innocence: Irrelevant in the High Stakes Risk Game"

The title of this post is the title of an important and timely new piece by Professor Ellen Podgor.  Here is the abstract:

When one thinks of “wrongful convictions and reliability in the criminal justice process” one often thinks of street crime convictions of defendants later proven innocent through DNA or other scientific evidence.  But this Essay presents a new dimension to this issue— the white collar crime context. Three stories are considered here: Arthur Andersen LLP, Jamie Olis, and Jeffrey Skilling — all who proceeded to trial after criminal charges were brought against them; and contrasting these three with KPMG, Gene Foster, and Andrew Fastow, all who secured plea agreements or deferred prosecution agreements with reduced sentences and finite results.  The concern here is that innocence or guilt does not always frame the judicial process in white collar cases. 

The risk of trial becomes so great that in order to minimize the possible consequences, innocence becomes an irrelevancy.  Although the plea bargain to trial differential existed for many years in crimes outside the white collar crime context, the high sentences now being given to individuals and entities charged with white collar crimes place these crimes in comparable stead with street crimes.  This gives pause to whether the next phase of wrongful convictions might move beyond street crimes into the white collar world.

I am eager to hear reactions to her suggestions that "the next phase of wrongful convictions might move beyond street crimes into the white collar world."

Should there special doctrines concerning "inflammatory" pre-sentencing publicity?

Among the fascinating aspects of the SCOTUS cert grant in the Skilling case today (basics here) is the pretrial publicity issue raised in the defendant's cert petition. Specifically, here is the second question presented in Skilling's cert petition:

When a presumption of jury prejudice arises because of the widespread community impact of the defendant’s alleged conduct and massive, inflammatory pretrial publicity, whether the government may rebut the presumption of prejudice, and, if so, whether the government must prove beyond a reasonable doubt that no juror was actually prejudiced.

Given that the first question presented in the Skilling cert petition relates to a fraud issue that is already before SCOTUS in two other cases, I cannot help but speculate that the Justices are somewhat interested in this separate claim related to "massive, inflammatory pretrial publicity."  And though I am not fully up-to-speed on the jurisprudence concerning "inflammatory pretrial publicity," I cannot help but speculate (and hope?) that the Skilling case might indirectly prompt lawyers and jurists to give some consideration to whether "massive, inflammatory" pre-sentencing publicity could be the basis for some kind of due process claim in some extreme cases.

Recent related post:

• SCOTUS to review fraud convictions of Jeff Skilling, former Enron executive

SCOTUS to review fraud convictions of Jeff Skilling, former Enron executive

As detailed in this AP report and this SCOTUSblog post, the biggest and perhaps highest-profile white-collar conviction of recent vintage is going to be reviews by the Supreme Court.  Here is the SCOTUSblog report:

The Supreme Court agreed on Tuesday to rule on claims that “searing media attacks” on longtime Enron executive Jeffrey K. Skilling tainted his criminal trial and conviction on various fraud charges.  The case also raises an issue on the scope of the federal law punishing the failure to provide “honest services” as a corporate executive.  This was one of four cases granted review, to be argued early next year.

I am pretty sure there are no sentencing issues before the Court in the case, but I cannot help but have a feeling that the long sentence initially given to Skilling may have played at least some role in the Justices' determination that this case merited review.

Among the interesting sentencing-related issues going forward is whether Skilling will now request bail pending SCOTUS review.  Conrad Black failed to get such bail when the Supreme Court took up his case, but he (a) had served less time, and (b) was subject to a much shorter sentence.

"Prison Time or Restitution?: Sentencing for fraud often a balancing act"

The title of this post is the headline of this article from my local paper, which raises some classic hard questions in the sentencing of economic crimes.  Here are snippets from an interesting and effective piece:

It's unlikely that Melanie Chen's victims will ever recoup the thousands of dollars they lost to her cancer hoax.  A Delaware County Common Pleas judge sentenced Chen on Tuesday to eight years in prison for swindling her in-laws and other relatives and friends out of $792,191 after convincing them that her husband, Phylip, 38, had cancer.

Chen, 30, of Columbus, also was ordered to pay full restitution, but Assistant Prosecutor Bill Owen knows from experience that probably won't happen. The money is long gone....

Chen's victims have conflicting emotions, which isn't unusual in fraud cases, Owen said. Some are more concerned with recovering the stolen money than with punishment, while others seem satisfied that Chen is in prison.  Phylip Chen also faces criminal charges and awaits a trial scheduled for Oct. 27. "It's just very difficult for a victim of an economic crime to ever feel any closure," Owen said.

Sentencing criminals convicted of fraud is a balancing act.  Judges often impose a prison term for financial crimes, especially if the case involves multiple victims, said David Diroll, executive director of the Ohio Criminal Sentencing Commission.  "The dilemma the courts have is, on one hand you have many people bothered by this and outraged that they've been scammed," Diroll said.  "You weigh that against whether sending someone to prison gives them any meaningful shot at restitution."

Before deciding on a sentence, judges consider the loss to victims and the criminal's ability to pay what they owe, Diroll said.  They also consider the person's background, education and employment history.  That's why punishments vary from court to court and judge to judge, even for similar crimes.  Sometimes, judges suspend prison sentences or grant early release from prison so that restitution can be collected sooner.

A state tax agent fired in February for theft recently was ordered to repay the $67,657 she stole from taxpayers over 14 months.  Franklin County Common Pleas Judge Laurel A. Beatty suspended a five-year prison term for Lisa M. Finnell, 41, and ordered her to complete five years of probation instead.  "I told her I preferred her making payments to the taxpayers of Ohio than sitting in a prison cell," Beatty said after Finnell's sentencing on Sept. 30.

But in many cases, the defendant doesn't have the means to pay restitution, particularly when it's a very large amount, said Mark Schweikert, executive director of the Ohio Judicial Conference and a retired judge.  "Each case is unique and has its own set of facts, and each offender has their own set of circumstances," Schweikert said.  "That's why we have judges and not computers making those decisions."

Because prison time imposes lots of tangible costs while providing few tangible benefits to either victims or society, I am always inclined to favor significant economic sanctions for economic crimes.  Specifically, I think both restitution and fines paid to a general victim compensation fund should be regular part of sentencing for all economic crimes. 

My broader hope is that, if and when economic crime victims start seeing efforts by prosecutors and judges to make them whole, these victims will start actively advocating punishments that enhance the chance of successful offender reentry (which should increase the ability of an offender to make restiution) rather than just urging longer prison terms (which generally decreases an offenders economic productivity). 

Long obstruction sentence for executive who lied about terminal illness

This local Boston Herald story, which is headlined "Big lie lands executive in prison: Former Biopure officer gets 3 years," suggests that a federal judge impose an above-guideline sentence on a white-collar scoundral who told what some might consider one of the worst kinds or tall tales.  Here are the details:

An ex-biotech executive’s sick ploy to avoid a federal lawsuit by lying about having terminal cancer was slapped with a longer-than-expected stretch in the slammer.

Howard P. Richman, 57, the former head of regulatory affairs at Biopure Corp. in Cambridge, was sentenced to three years in prison and ordered to pay a $50,000 fine for obstruction of justice, federal prosecutors announced yesterday.

U.S. District Court Chief Judge Mark Wolf’s sentence was harsher than federal guidelines and went beyond prosecutors’ recommendation for a 21-month prison term.  Ian Gold, Richman’s defense attorney, had requested a 15-month prison term....

Richman pleaded guilty in March to lying to Judge Patti Saris, who presided over a Securities and Exchange Commission suit accusing Biopure of misleading investors about its synthetic blood product Hemopure.

The Texas resident deceived his own lawyers by posing on the phone as a doctor, and produced a phony affidavit that claimed his chance of surviving colon cancer was, at best, 15 percent.  “To any human who has experienced serious illness in their own life or family, Richman’s conduct is appalling,” Assistant U.S. Attorney James Dowden wrote in a sentencing memorandum. “Quite simply, his lies are deserving of society’s condemnation and of serious criminal punishment.”

Based on the cancer claims, Saris halted the SEC’s case against Richman in July 2007.  The ruse apparently unraveled two months later when his attorneys abruptly withdrew from the civil case.

"Appeals court in NYC upholds Rigas' sentencing"

The title of this post is the headline of this AP article, reporting on this sentencing ruling in a high-profile white-collar sentencing appeal handed down late today by the Second Circuit.  Here are the basics:

A federal appeals court in New York has upheld prison sentences given to a father and son who built Adelphia Communications into a cable television powerhouse.

The 2nd U.S. Circuit Court of Appeals in Manhattan on Monday agreed that prison terms given to 84-year-old Adelphia founder John Rigas and his son Timothy were appropriate. Defense lawyers had argued that the father's 12-year sentence and the son's 17-year prison term were more years in prison than some terrorists serve.

Because I filed an amicus brief arguing that the district court's sentencing work was procedurally unreasonable, I am disinclined to comment on the particulars of this panel ruling.  But readers, of course, should feel free to discuss the ruling (which address a number of notable white-collar sentencing issues).

Fundraiser Hsu gets 24-year (within-guideline?) federal sentence for ponzi scheming

The high-profile, white-collar sentencing of the day is described in this Wall Street Journal article headlined "Campaign Fund-Raiser Hsu Sentenced to 24 Years in Prison." Here are the basics:

A federal judge on Tuesday sentenced former Democratic fund-raiser Norman Hsu to more than 24 years in prison for illegally funneling tens of thousands of dollars to U.S. political candidates and for his role in a Ponzi scheme.

The sentence of 292 months in prison, handed down in a U.S. District Court in Manhattan by Judge Victor Marrero, was less than the 30 years that the prosecution had requested.

Before Judge Marrero announced the sentence, Mr. Hsu quietly told him: "I know apologizing will not make things better for anyone, but I would still like to apologize to your Honor, and to everyone else." Federal prosecutors said the apology was meaningless, arguing that Mr. Hsu wasn't as cooperative as he could have been.

Mr. Hsu's attorney, Alan Seidler, said his client wasn't surprised by the sentence. Mr. Seidler says his client intends to appeal, as Mr. Hsu disputes the amount of money lost to investors on which the sentence was calculated. Prosecutors have said that investors, collectively, lost at least $20 million.

Mr. Hsu was convicted in May of illegally funneling tens of thousands of dollars to U.S. political candidates. Also in May, he pleaded guilty to charges related to a Ponzi scheme that prosecutors said raised at least $60 million and swindled investors out of at least $20 million.

This description of the sentencing leads me to suspect that Hsu received a within-guideline sentence and that he will be appealing on a guideline-related loss calculation issue.

Another triple-digit federal sentence for ponzi schemer

This local article, headlined "Ponzi scheme leader sentenced to 100 years," highlights another triple-digit  federal sentence imposed on a white-collar offender earlier today.  Here are the details of a sentencing today that fell a bit short of the Bernie benchmark of 150 years' imprisonment:

A federal judge in Riverside this morning sentenced Richard M. Harkless to 100 years in prison for his role in running the MX Factors investment scheme, which took in nearly $60 million from more than 600 people between 2000 and 2003.

U.S. District Judge Virginia Phillips said Harkless had shown no remorse for his actions, either during his trial or in pre-sentence filings. The judge said many of Harkless’ victims were vulnerable to deception, and several lost homes or had to declare bankruptcy because of their losses.

Harkless, 65, was convicted in July on seven counts: three of mail fraud, three of wire fraud and one of money laundering. He faced a maximum sentence of 130 years in prison....

Harkless, who represented himself during his trial and sentencing, acknowledged the sentence amounted to a “death sentence,” but vowed to work to pay back victims.

Assistant U.S. Attorney Eric Vandevelde, who prosecuted the case, said after court proceedings that the sentence was “very fair” under the circumstances. “I think it sends a strong message, especially in this climate where so many investors have been vulnerable to fraud schemes,” he said.

Below-guideline sentence for corrupt Alaska state representative

As detailed in this local article from Alaska, which is headlined "Former Alaska rep gets 6 months in state's bribery scandal," another high-profile white-collar offender has received another high-profile below-guideline federal sentence.  Here are the details:

Former state Rep. Beverly Masek was sentenced to six months in federal prison today for her part in the Alaska political corruption scandal, a lenient punishment that sliced a year from the minimum confinement recommended by federal guidelines.

U.S. District Judge Ralph Beistline said Masek betrayed the public trust and the oath of office she took five times in Juneau -- one for each of the two-year terms she served representing the Willow area in the Legislature.  Masek admitted taking two illegal payments in 2003 of $2,000 each from former Veco Corp. chief executive Bill Allen, the second time in payment for spiking an oil-tax bill. Allen, an oil-field contractor, was concerned that the tax bill would hurt his clients.

In delivering a sentence substantially below the 18- to 24-month recommendation in federal guidelines, Beistline cited the long delay between the commission of the crime and its prosecution by federal authorities, who didn't charge Masek until March.  She pleaded guilty to conspiracy to commit bribery.

Masek, 45, a former Iditarod musher, cried throughout the 80-minute hearing, including when she promised to obtain sobriety treatment after her prison sentence.  "I feel I've been operating on a broken sled runner," Masek said, recalling her days has a dog musher. "I feel I've been on that broken sled runner for quite a while. I'd really like to fix it."

GenRe executive reaps the sentencing benefits of white-collar cooperation

This Reuters article, which is headlined "Former General Re exec gets probation in AIG fraud," spotlights the sentencing benefits that often flow from being a white-collar cooperator. Here is how it starts:

A former executive of reinsurer General Re Corp was sentenced to two years probation and fined $10,000 after pleading guilty to helping American International Group Inc cook its books.

U.S. District Judge Christopher Droney, imposing the relatively mild sentence on Richard Napier, said he was taking into account the defendant's extensive cooperation with prosectors. Napier's testimony helped convict four former General Re executives and one former AIG executive in February 2008, according to prosecutors.

Napier in 2005 pleaded guilty to a conspiracy charge, admitting that he agreed to deals between General Re and AIG that allowed the former insurance heavyweight to artificially inflate its profits. Napier served as senior vice president of General Re, a reinsurance unit of Warren Buffett's Berkshire Hathaway Inc....

He could have been sentenced to up to five years in prison and fined $250,000. "Mr. Napier's cooperation with the government ... was of exceptional assistance," Droney said. "His testimony showed the extent of the sham reinsurance conspiracy."

"Judges Punish Wall Street as Regulators Just Talk About Reform"

The title of this post is the headline of this interesting Bloomberg piece that suggesting that federal sentencing judges are playing a central role in responding to the recent economic crash.  Here is how the piece gets started:

As the White House and Congress debate how to regulate financial firms to avoid another economic crisis, judges have assumed the point position in punishing Wall Street for causing the worst recession since the 1930s.

The executive and legislative branches have been discussing reforms such as more regulation of hedge funds and transparency for derivatives as a response to the financial crisis that began a year ago. As that battle with a reluctant Wall Street inches forward about how to prevent another disaster, judges are taking the first steps toward the same goal, punishing executives and issuing rulings with national impact....

“Judges have lifetime appointments and are freer to act on their conscience than regulators,” said Charles Elson, chair of the University of Delaware’s corporate-governance center. Judges can act more decisively than regulators or politicians because they’re “insulated from the political process,” he said.

Free from the pressures of lobbyists, judges typically refrain from showing emotion or expressing opinions during court proceedings to appear impartial. During sentencings in criminal cases, they sometimes let their hair down about their feelings about the damage Wall Street firms or their executives did.

"Fumo disclosure on addictions could pay off"

The title of this post is the headline of this local article discussing the possibility that a prominent  defendant, who received a federal sentence already considered lenient, may be able to get another reduction based on a (little-discussed, but very significant) substance-abuse treatment program for federal prisoners.  Here are the basics:

Former State Sen. Vincent J. Fumo's effort to delay his prison term by citing addictions to Xanax and alcohol may have failed, but the embarrassing disclosure might still pay off for him.  Under federal Bureau of Prisons policy, the 66-year-old Fumo could slash a year off his sentence by enrolling in a substance-abuse treatment program while incarcerated.   The former lawmaker thus conceivably could end up serving only three years behind bars.

In a July decision that sparked widespread anger, U.S. District Judge Ronald L. Buckwalter gave Fumo a 55-month prison sentence.  With time off for good behavior, Fumo would be expected to serve just four years of that.

Carla Wilson, a regional official with the Bureau of Prisons, said the year of reduced time for addiction treatment would be in addition to the discount for good behavior.  It was not known yesterday whether Fumo intended to seek admission to such a program.  The leaders of his legal team, Dennis J. Cogan and Samuel J. Buffone, did not return telephone calls.

Assistant U.S. Attorney Robert A. Zauzmer, who prosecuted Fumo along with Assistant U.S. Attorney John J. Pease, declined to comment yesterday.  The two have filed notice that they wish to appeal Fumo's sentence, which they have called "unduly lenient."

A dominant political figure in Harrisburg and Philadelphia for almost three decades, Fumo was convicted in March of all 137 counts with which he had been charged. A jury found he had defrauded the Senate and a pair of nonprofit organizations of at least $2 million and tried to obstruct the FBI's investigation.

Congress added the sentence reduction for drug treatment to federal law in 1994 to give inmates an incentive to seek help. Linda Thomas, a spokeswoman with the Bureau of Prisons in Washington, said prisoners who seek to enroll in the program are vetted to verify their addictions. "If they are accepted," she said, "they would work with the team to address the [dependency] issues."

Inmates get varying amounts of reduction in their time based on the length of their sentence. Fumo could qualify for up to a year, the maximum permitted any prisoner.

Recent related posts on the Fumo sentencing:

• State senator Fumo gets below-guideline sentence of 55-months imprisonment on corruption charges
• Comparing white-collar apples and drug dealing oranges at sentencing
• "Feds seek to appeal 'unreasonable' Fumo sentence"
• Continued buzzing about the (soft?) sentence given to Fumo

Another notable reversal of a high-profile, white-collar conviction

Though only a little bit of a sentencing story, all white-collar crime folks should be interested in this news out of the Ninth Circuit (via this piece in The Recorder):

The 9th U.S. Circuit Court of Appeals has thrown out Gregory Reyes' conviction for stock option backdating while he was CEO at Brocade Communications Inc. The court ruled that Assistant U.S. Attorney Adam Reeves committed prosecutorial misconduct by saying during closing argument that the entire Brocade finance department was ignorant of the fraud.  "In representing the United States, a federal prosecutor has a special duty not to impede the truth," wrote Judge Mary Schroeder.  Judges Stephen Reinhardt and Louis Pollak, sitting by designation, concurred.

The court also upheld the conviction of Brocade HR director Stephanie Jensen, but remanded for resentencing, saying U.S. District Judge Charles Breyer should not have increased her sentence due to obstruction of justice by her attorney.

The full panel opinion in US v. Reyes is available at this link, though the make-up of the panel makes me wonder whether this case might get en banc review.

UPDATE:  Ellen Podgor comments on the Reyes ruling in this post at the White Collar CrimProf Blog.

"Fake lawyer Kieffer sentenced to 51 months"

The title of this post is the headline of this Denver Post article providing the sentencing news in a fraud case involving a defendant well known to lots of folks in the federal sentencing community.  Here are the details:

Howard O. Kieffer, an imposter attorney who bilked federal defendants across the country out of thousands of dollars, was sentenced to 51 months in federal prison Friday and ordered to pay $152,750 in restitution.

Kieffer, 54, did not make a statement during the 90-minute sentencing hearing in U.S. District Court in Bismarck, N.D., said Assistant U.S. Attorney David Hagler.  He could have faced up to 25 years in prison, but given his criminal history, federal sentencing guidelines placed his conduct in a range of 51 to 63 months....

Federal prosecutors charged Kieffer with mail fraud and making false statements as he applied for admission as an attorney in North Dakota.  Testimony and evidence against Kieffer from clients around the country were used during his sentencing hearing.  Last year, a Denver Post investigation found that Kieffer represented at least 16 clients in 10 federal jurisdictions around the U.S., mostly on post-conviction motions.

Where the jobs (and future sentencing issues) can be found

This new piece in The National Law Journal, which is headlined "DOJ Looks for 'Rock Star' to Run Top-Priority Fraud Cases," is a fascinating read for anyone interesting the future of the federal criminal justice system.  Here are excerpts from the piece:

The Obama administration is dramatically beefing up the fraud section of the U.S. Department of Justice's Criminal Division as it tries to add muscle to back up its rhetoric about cracking down on health care and corporate fraud.  The department is looking for what Assistant Attorney General Lanny Breuer calls "a superstar" to lead the fraud section. It also plans to add 10 trial attorneys and fill the long vacant job of deputy chief for corporate, securities and investment fraud.

That promise of extra bodies is critical: The fraud section is already the Criminal Division's largest litigation unit.  With additional resources and the strong backing of Justice higher-ups for more fraud prosecution, the new chief should become the bane of defense lawyers' existence nationwide.

In advertising for the post, Justice says the new chief will be "at the forefront of the Department's efforts" to hold companies and individuals responsible for the economic downturn (where appropriate, of course). The chief will also play a "key role" in developing Justice policy and fraud enforcement initiatives involving millions of dollars -- albeit likely not litigating the cases personally. (Traditionally the top working litigators in the fraud section have been the deputy chiefs.)...

Fraud section attorneys are often described as a "rapid response team" that jumps into districts around the country to target the hot crime of the moment.  Five of those 10 trial lawyers would be assigned where needed, said Justice officials.   But the other five spots are new positions dedicated to the prosecution of health care fraud.  Attorney General Eric Holder Jr. has declared the fight against health care fraud to be a top priority....

The defense bar raises the concern that adding more prosecutors and launching more strike forces will inevitably mean that Justice starts trying to turn minor, inadvertent violations of complex health laws into major litigation and press-release-worthy settlements.  Prosecutors live to prosecute, especially young lawyers told they're bringing "cases of extraordinary importance" aimed at reaping millions for the American taxpayer.  So defense lawyers counsel caution.  "When the statistics drive the effort, you run the risk of sweeping in otherwise explainable, innocent or nonfraudulent conduct," warned Gibson, Dunn & Crutcher partner Robert Blume of the Los Angeles-based firm's Washington and Denver offices.

I have suggested in this past that the economic downturn would likely mean a good upturn in business for white-collar defense lawyers.  And, as often noted on this blog, white-collar cases frequently raise interesting and high-profile sentencing issues.  With a new policy-making team and a bunch of fresh new recuits inside Main Justice, we all should plan on this area of the federal criminal justice system to be hot for quite some time.

DOJ not to appeal Tenth Circuit sentencing ruling in Nacchio case

In posts here and here discussing the Tenth Circuit panel's important ruling that reversed the sentence imposed on former Qwest CEO Joe Nacchio following his conviction for insider trading, I suggested that the Justice Department might not even bother to seek en banc or SCOTUS review of the panel work.  Thus, I was not too surprised by this new post, headlined "Analysis: New approach to 'insider' gains," by Lyle Denniston at SCOTUSblog. Here are the basics:

A major dispute over how severely to punish a corporate “insider” who makes gains from tradmg in the company’s stock with information other investors don’t have seemed a likely bet for Supreme Court review. But that won’t happen now: the Justice Department has decided not to test the question further, after losing on it recently in the Tenth Circuit Court....

In general, the Circuit panel adopted a variation of the so-called “market absorption theory,” as applied directly to “insider” trading. Simply put, this theory suggests that, if an “insider” trades on private information about the company, the gain made from the transactions will be reduced if there is evidence that — once all investors had access to that information — the market absorbed it, so that any gain beyond that point for the “insider” would be due to market activity, not the continuing effect of the illegal trading.

Only two federal appeals courts have ruled on that theory. The Eighth Circuit rejected it in its 2005 divided en banc decision in U.S. v. Mooney. Embracing the views of the Eighth Circuit dissenters, and creating a direct conflct, the Tenth Circuit embraced the theory. That conflict increased the prospect that the Supreme Court could take up the issue.  But, the Justice Department will not test it in the Nacchio case, either by seeking Circuit en banc review or by filing a Supreme Court petition. “We will not be seeking further review,” a Department spokesperson, Beverley Lumpkin, said on Tuesday in response to a query.