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November 2, 2006

The dominance of loss in white-collar sentencing

I am about to head into a day talking about ways to simplify the federal guidelines, and I suspect that "loss" will be a topic of much discussion.  Coincidentally, BusinessWeek has this good primer on how these issues play out in white-collar sentencings.  Here is a snippet:

The sentencing process for white-collar criminals today has as much to do with money, i.e., investor losses, as with other factors such as remorse, community standing, or prospects for rehabilitation.  Under guidelines adopted in the post-Enron crackdown, the amount of financial havoc wreaked by a rogue executive figures prominently into his or her sentence.

Moreover, when the fraud stretches into the billions, as at Enron, Worldcom, and HealthSouth (HLS), the sentences rise to a duration that makes many legal experts question whether the justice system is shifting the role of deterrence into the realm of overkill.

November 2, 2006 at 09:34 AM | Permalink


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For many types of crimes, the Guidelines place too much reliance on "things that can be counted." For fraud, it's the size of loss. For child porn possession, it's the number of images. For drug crimes, it's the quantity.

I think that the emphasis on numbers--however calculated--needs to be reduced. It leads to some absurd results.

Posted by: Marc Shepherd | Nov 2, 2006 9:59:32 AM

It's not only the jail time that depends on loss calculations, it's the staggering amount of restitution white-collar criminals have to contend with paying back once they get out of prison.
Not that I think that's a problem necessarily.

Posted by: Brian | Nov 2, 2006 10:10:50 AM

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