Monday, July 21, 2008
Should all "true" first offenders now get a sentencing discount in light of Gall and Kimbrough?
In the olden days when the federal sentencing guidelines were mandatory, the Supreme Court in Koon indicated that a district court departing downward from Criminal History Category I would "abuse its discretion by considering [a first offender's] low likelihood of recidivism [because the Sentencing] Commission took that factor into account in formulating the criminal history category." But now, of course, the guidelines are merely advisory. And Kimbrough strongly suggests that courts can and should look to research reports by the Sentencing Commission when deciding whether and when and how to vary from the guidelines. And in May 2004, in this interesting report titled "Recidivism and the 'First Offender'," the Commission highlights empirical data showing very low recidivism rates for what I would call "true" first offenders:
The analysis [of empirical data on re-offending] delineates recidivism risk for offenders with minimal prior criminal history and shows that the risk is lowest for offenders with the least experience in the criminal justice system. Offenders with zero criminal history points have lower recidivism rates than offenders with one or more criminal history points. Even among offenders with zero criminal history points, offenders who have never been arrested have the lowest recidivism risk of all.
These issues came to mind as I read closely the Sixth Circuit thoughtful work last week in US v. Duane, No. 06-6536 (6th Cir. July 17, 2008) (available here). At the very end of Duane, the panel had this nuanced discussion of these issues in a post-Booker world:
[T]he district court did not respond to Duane’s first argument — that he deserved a more lenient sentence because he had zero criminal history points. This was not a particularly strong argument given that Duane’s criminal history category was taken into account in determining his Guidelines range. But the argument was not completely frivolous. Because Duane had zero points at age 57, he might plausibly argue that even category I — which applies when a defendant has zero or one criminal history point(s) — overstated his criminal history to some degree. Although the district court would have ideally addressed this argument, we can hardly say that this failure alone constituted error in this case. Given that the district court imposed a within-Guidelines sentence, addressed the factors it found relevant, and addressed the majority of Duane’s arguments, we conclude that the district court did not err.
Though the Duane court does not reverse a within-guideline sentence for failure to consider low likelihood of recidivism for a "true" first offender, the panel's carefully discussion of this issue suggests district courts now have an obligation to address expressly these issues whenever a true first offender defendant urges a below-guideline sentence by saying he is very unlikely to even commit a crime again.
Indeed, defendants and defense attorneys can (and perhaps should) stress the USSC's own research to assert that proper application of 3553(a) in the case of a "true" first offender now virtually demands a below-guideline sentence. The argument would be that the considerations set forth in 3553(a)(2)(C) and in 3553(a)(6) are only properly acknowledged if and when a "true" first offender gets a lower sentence than the advisory range suggested for all the other persons with some criminal past that are lumped into Criminal History Category I.
Friday, June 27, 2008
Lawyer Scruggs gets smoked with five-year max prison term
As detailed in this local report, "Dickie Scruggs received the maximum 5 years in prison in $250,000 in fines for a crime Judge Neal D. Biggers Jr. called 'reprehensible'." Here are more details:
Scruggs faced a maximum sentence of five years but argued that he should be sentenced to 30 months. He pleaded guilty in March to conspiring in 2007 to bribe Circuit Court Judge Henry L. Lackey, who cooperated with federal investigators.
Biggers entered the courtroom at 10 a.m. sharp and it was soon obvious from what he said about the findings in the pre-sentencing report, that the judge would hand down a stiff sentence. He said, "There is no question in the court's mind that Mr. Scruggs, Mr. Richard Scruggs, was a leader and a planner (in the conspiracy). He has said he came into the scheme late. Regardless, he was the leader, he was the money man."
In fact, Biggers said Scruggs had entered into the scheme so easily that it made him wonder whether Scruggs had done such a thing before and indeed evidence indicates that he may have....
Biggers also questioned why Scruggs would be paying legal settlement fees to non-lawyers. He did not mention any names, but it was clear that he was referring to the elusive Delta businessman P.L. Blake, who expected, over the course of a settlement Scruggs reached with tobacco companies, to receive $50 million in fees.
Friday, May 16, 2008
Latest FSR issue focused on white-collar sentencing
I am pleased to report that, just in time for the start of the summer sentencing season, the latest issue of the Federal Sentencing Reporter focused on white-collar cases is now in print and also available here on-line. The issue is titled, simply enough, "White-Collar Sentencing."
FSR's publisher has kindly made the issue's terrific opening commentary by Mark Harris and Anna Kaminska, which is entitled "Defending the White-Collar Case at Sentencing," available for download for free here. The full contents of this latest FSR issue are listed below and can be ordered on-line here.)
- Mark D. Harris & Anna G. Kaminska, Defending the White-Collar Case at Sentencing
- Harry Sandick, Gall and Kimbrough and Their Relevance to Sentencing in White-Collar Cases
- Frank O. Bowman III, Sentencing High-Loss Corporate Insider Frauds After Booker
- Gabrielle S. Friedman, Kan M. Nawaday & Daniel M. Gitner, Challenging the Guidelines’ Loss Table
- Hector Gonzalez, Matthew D. Ingber & Scott A. Chesin, Is Booker a “Loss” for White-Collar Defendants?
- Peter J. Henning, Prior Good Works in the Age of Reasonableness
- Alexandra A.E. Shapiro & Nathan H. Seltzer, Measuring “Gain” Under the Insider Trading Sentencing Guideline Based on Culpability for the Deception
- Cheryl A. Krause & Luke A.E. Pazicky, An Un-Standard Condition: Restricting Internet Use as a Condition of Supervised Release
- Emily Barker, Brian Baxter, Alison Frankel & Nate Raymond, Progress Report: How the Justice Department’s Highest-Profile Corporate Fraud Cases Turned Out (reprinted from The American Lawyer)
- U.S. Sentencing Commission, 2007 Sourcebook of Federal Sentencing Statistics Tables
- Sentencing Memorandum in United States v. Thomas Coughlin, No. 06-20005 (W.D. Ark. Feb. 1, 2008)
Thursday, May 01, 2008
A (record-setting?) long white-collar sentence
This local report from Denver has me wondering whether a new record has been set for the longest white-collar federal sentence. Here are the basics:
U.S. District Court Judge Robert Blackburn sentenced a man to 330 years in prison Tuesday for his role in a $56 million investment scam from which proceeds were used to buy the Redstone Castle. At 72, it's unlikely Norman Schmidt, of Denver, will ever be released.
You gotta like the foresight of the reporter here, who thinks it "unlikely" that Schmidt will live until the year 2338 to get released. (Then again, with 15% good-time credit, Schmidt may be able to get out as early as the year 2289.) Silly numbers aside, here is what led to this extraordinary federal sentencing term:
Investigators believe Schmidt obtained tens of millions of dollars from hundreds of investors for his own personal gain. Schmidt was found guilty of conspiracy to commit mail fraud, wire fraud and securities fraud, plus other counts and a money laundering count. He and his wife, Jannice Schmidt, plus five others were indicted in 2004. Jannice Schmidt was recently sentenced to nine years in prison....
Schmidt worked with the others from 1999 to 2003 to defraud investors with a purportedly high-yield investment program. The group used "corporate alter-egos" named Reserve Foundation Trust, Smitty's Investments, Capital Holdings, Monarch Capital Holdings and Fast Track. They promised investors returns of 2 to 400 percent per month and even sent out false monthly statements, authorities believe.
This AP story indicates that a sentencing appeal is planned: "Schmidt's attorney, Thomas Hammond, said Wednesday he planned to appeal the conviction and sentence. 'To say that it is excessive is an understatement,' Hammond said."
Wednesday, April 30, 2008
The loss-culpability connection (or disconnect) in white-collar sentencing
Especially in the federal sentencing system, where the (now advisory) guidelines place so much emphasis on the concept of "loss," the relationship in white-collar sentencing cases between loss amounts and criminal culpability is an extremely important and largely under-examined topic in much of the caselaw and commentary. Fortunately, a soon-to-be-available new issue of the Federal Sentencing Reporter will be examining these issues at some length. And, even before this FSR issue becomes available, a new decision from the First Circuit, US v. Innarelli, No. 06-2400 (1st Cir. Apr. 29, 2008) (available here), addresses these matters briefly. As noted by AL&P, Innarelli covers lots of issues, but this passage struck me as especially notable:
[W]e focus our loss inquiry for purposes of determining a defendant's offense level on the objectively reasonable expectation of a person in his position at the time he perpetrated the fraud, not on his subjective intentions or hopes. Moreover, as already noted, it is immaterial that many of the victims actually incurred no loss. As the district court aptly stated, "[l]oss in a fraud case is a yardstick for moral culpability." Where, as here, the defendant reasonably should have expected that loss would result, he can and generally should be punished more severely to account for his greater level of moral culpability, even where the victim has managed to make money in spite of the fraud.
I have no quibble with enhancing a sentence because of a "greater level of moral culpability" reflected in the defendant's "objectively reasonable expectation" of what loss would result from a fraud. The problem I have is that defendants rarely get the converse sentencing discount when they completely lack a "greater level of moral culpability" but there are large actual loss amounts that were never intended or even objectively reasonable to expect as a result of a questionable and perhaps fraudulent business decision.