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June 28, 2005

Big white collar developments

Thanks to the White Collar Crime Prof Blog, I see there are all sorts of interesting developments on the white collar front.  The biggest news, as detailed in this AP story, concerns a federal jury acquitting HealthSouth Corp. founder Richard Scrushy of all charges "in a surprise setback for federal prosecutors who had scored victories over a string of big-name CEOs accused of fraud."  Peter Henning and Ellen Podgor both have extended posts here and here covering and analyzing this news. The first thought that jumped to my mind was that perhaps the Scrushy juror was influenced in some small way by the news of very long sentences in other federal white-collar cases such as the sentences the Rigases received last week.

And speaking of long sentences in white-collar cases, the White Collar Crime Prof Blog in this post discusses the government's sentencing brief for the July 13 sentencing of former WorldCom CEO Bernie Ebbers.  That brief, which runs 83 total pages and can be accessed at this link, is a very interesting read and concludes with the government being a bit cagey about its ultimate sentence recommendation (perhaps because the claimed amount of loss takes Ebbers' guideline calculation literally off the offense level chart).  Peter Henning provides an nice summary of the government's brief in this post, and I will just set out the brief's nuanced conclusion:

The Government respectfully submits that, for the reasons explained above, Ebbers should be sentenced to a term of imprisonment consistent with the Sentencing Guidelines and the sentences imposed in the three similar cases involving John Rigas, Patrick Bennett, and Steven Hoffenberg [who are other senior executives convicted of significant corporate fraud].

Some media reports on the government's sentencing brief are here and here, and background on Ebbers' sentencing filing seeking leniency can be found in this post.

June 28, 2005 at 04:59 PM | Permalink


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I am somewhat doubtful that the Rigas's long sentences affected the Scrushy verdict. After every one of these recent White Collar trials, commentators try to find a pattern. The pattern is that there is no pattern; each case is its own story.

Doug is trying to suggest that the jury deliberately acquitted a man whom they knew to be guilty, simply because they couldn't stand the idea of a long prison term. I think jury nullifications are rare, and we'd need to see some hard evidence to believe that happened here.

In my view, what probably helped Scrushy is that the trial was so darned long, and there were something like 36 counts against him. Very long and complex trials tend to help defendants, because the jury has trouble sorting out all of the details.

In Bernie Ebbers's case, if you presume that Timothy Rigas's 20-year sentence was "correct," it's hard to see Ebbers getting away with anything less than 25-30. That, indeed, appears to be the government's argument. On a comparative basis, if you accept that Ebbers was guilty (as the sentencer must), his crime was monumental.

Now, I happen to believe the morally correct sentence for Timothy Rigas was more like 5-7, but under current guidelines the judge had to depart way downward just to arrive at a 20-year sentence. I don't think Ebbers will get Life, but with the guidelines calling for Life, he has to get something very substantial.

Although I'm no fan of the government's sentencing approach, I do agree with the government that Ebbers's purported evidence in mitigation is pretty weak. Just because he can produce hundreds of letters from adoring family and friends, it doesn't take away from the crime he committed.

Posted by: Marc Shepherd | Jun 29, 2005 10:23:41 AM

These sentences doled out for non-violent crimes are an atrocity. We cannot track violent offenders because the government values their ego and money more than the life of a child or innocent person. We can't track a sex offender, but if Martha takes her ankle bracelet off, an all points bulletin would be issued for her. This does not make sense.

Posted by: rhuber | Jul 13, 2005 1:42:41 PM

I am the wife of a man just sentenced to 11 years and 4 months to prison for something he did not do. My husband never handled a dime of money that the government says was involved and is now responsible for over 10 million. The trial lasted 3 months and the jury was out only 3 hours. There were over 300,000 documents that the jury did not even look at. My husband was not the only defendant, there were three others. Talk about an injustice system.

Posted by: Tmt | Aug 3, 2005 1:57:58 PM

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