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October 19, 2007

A Fifth Circuit unpublished affirmance of a long white-collar sentence

This AP article details that the Fifth Circuit this week affirmed a notable above-guideline sentence in a fraud case.  Here are details from the article:

A federal appeals court has upheld the sentence of the former chief financial officer of a West Texas oil and gas drilling company who pleaded guilty to swindling $77 million from his employer.  Jonathan Dwane Nelson wanted the 5th U.S. Circuit Court of Appeals to revisit his 25-year sentence, saying the length fell outside punishment guidelines. The New Orleans-based court on Wednesday disagreed, saying the district court's sentence was reasonable. 

Officials say Nelson embezzled $77 million from Snyder-based Patterson-UTI. Authorities allege Nelson sent the money to companies he controls and then spent it on an airplane, an airfield, a cattle ranch, homes, vehicles and a truck stop. He pleaded guilty in April 2006 to one count of wire fraud and aiding and abetting; and one count of engaging in monetary transactions derived from specified unlawful activity and aiding and abetting. 

He was sentenced last October. He also was fined $200,000 and ordered to pay restitution from the sale of assets he had purchased with the stolen money. The punishment range was 188 to 235 months, court documents show.  But U.S. District Judge Sam Cummings issued a non-guideline sentence of 300 months because the court found Nelson's actions justified a harsher punishment than the guidelines set forth.

I had to get the case details from the AP article because the Fifth Circuit's unpublished disposition in Nelson provides very few of these specifics.  Indeed, what's most significant about the Fifth Circuit's work is its willingness to approve so quickly a sentence that requires a non-violent offender to serve nearly a decade more time in prison than the guideline range suggests would be sufficient.

October 19, 2007 at 09:25 AM | Permalink


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This is a tangent to an interesting post... Why is it that the media never identify the federal appellate courts by their proper names? How hard is it to say "the United States Court of Appeals for the Fifth Circuit"? I often notice the meaningless variations that major news outlets use, and I wonder why they don't have editorial rules for such things.

Posted by: kat | Oct 19, 2007 1:34:03 PM

A ten year variance because...? After threatening plain error, the court proceeds to conduct a meaningless/toothless "reasonableness" review. There is no discussion of the particular conduct that would warrant this variance (and I would hope an upward variance of this magnitude would warrant a VERY thoughtful analysis). The Fifth Circuit's opinion would receive an F- on a law school exam; it contains nothing but conclusory statements.

Posted by: Alec | Oct 19, 2007 5:42:01 PM

Doug - the 5th Circuit's opinion was particularly disappointing, as I represented Nelson and am quite familiar with good arguments we made on Nelson's behalf. Of note is the fact that the district court wholly failed to review whether Nelson's sentence would have been unwarranted and disparate under (a)(6). The 5th didn't even address whether or not it believed that the district court had accounted for this factor which should have received significant weight. Perhaps more troubling for folks down the road is the 5th's dictum suggesting that plain error analysis applies in cases where the defense doesn't object to the court's upward variance. As an aside, what defendant doesn't object to an upward variance. As a result of this decision, Nelson now shares with Bernie Ebbers the distinction of having the longest corporate fraud sentence at 25 years.

Query for you and all -- is there anything in front of the Supremes right now which might give me some ammo on a petition for rehearing in which the issue is whether court's must undertake an unwarranted disparity analysis under (a)(6), however minimal, in order for the sentence to be reasonable?

And, let me know if you'd like the briefs from this case.


Posted by: Bill Mateja | Oct 21, 2007 12:26:00 PM

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