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May 1, 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."

May 1, 2008 at 03:58 AM | Permalink


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It is actually not the longest white collar sentence in history. Shalom Weiss, who looted National Heritage Life Insurance Company, was sentenced to 845 years for white-collar offenses in 2000 in the Middle District of Florida and another defendant in the case was sentenced to 740 years. See http://en.wikipedia.org/wiki/Shalom_Weiss

Posted by: A.G. | May 1, 2008 7:40:25 AM

Thanks, A.G. Maybe I should call this the longest post-Booker white collar sentence...

Posted by: Doug B. | May 1, 2008 8:41:49 AM

The "unlikely be released" refers, of course, to being pardoned or having his sentence overturned on appeal. Actually, if this is not an unreasonable sentence, I don't know what is. I'd overturn it on appeal if I heard the case. 330 years for a white collar crime is per se unreasonable as far as I'm concerned.

Posted by: bruce | May 1, 2008 10:00:20 AM

Will they overturn this? Is it automatic that it gets overturned? What goes through a judges mind when he does this? Should he stay on the bench or is something mentally wrong with him?

Posted by: | May 1, 2008 10:50:32 AM

The articles provide little in the way of information as to why such a sentence was imposed. Was this a within-Guidelines sentence? Without knowing all the facts, I think it's a little premature to say any term of imprisonment is "per se" unreasonable.

Posted by: steve | May 1, 2008 11:18:15 AM

What goes through a judge's mind in imposing a sentence like this? Hmm. Maybe sympathy for all the people who lost money? Maybe a desire to set the sentence so that even if the defendant gets one or two counts overturned, he stays in jail? Maybe frustration with a system where poor criminals get life and rich criminals walk, and so it's time to punish a rich criminal as well?

Posted by: Random Clerk | May 1, 2008 11:20:54 AM

So, if the sentence were 10% of that, he is still unlikely to survive it. Seems like the excessiveness issue is pretty academic here unless it is linked on appeal to trial issues which result in a new trial.

Posted by: Ray Twohig | May 1, 2008 12:33:36 PM

I believe the excessiveness issue is most important in the context of the possibility that the defendant will cooperate in exchange for a Rule 35 sentence reduction.

Posted by: steve | May 1, 2008 12:37:57 PM

Assume that Mr. Hammond wins his sentencing appeal. Picture the scene where he explains the victory to his client.

"Great news, Norm! You are no longer sentenced to 10 times your life expectancy. I got it down to only twice your life expectancy. Here's my bill."

Posted by: Kent Scheidegger | May 1, 2008 2:44:51 PM

And the client will respond that he'll pay him when he gets out.

Posted by: | May 1, 2008 3:37:39 PM

If he can make it to the mid 2200s maybe Captain Kirk can beam him out of prison.

Posted by: Alec | May 1, 2008 4:03:18 PM

After reading about this sentence, I ventured out of my office. I saw that there was no more homelessness. The world was beautiful. Corruption had ended (due to the deterrence theory). In short, the world is a much better place.

I thank the judge for imposing such a sentence.

Posted by: S.cotus | May 1, 2008 4:16:40 PM

I don't care if the defendant is unlikely to be alive when his term ends. The sentence is intended to send a message to other would-be schemers that they will be dealt with harshly if they are caught and convicted.

Posted by: Da Man | May 2, 2008 10:35:03 AM

First off I am Norm Schmidt's grandson so i would be happy to answer any questions you may have about his case. The sentence on my grandfather was way to harsh. Yes he was the mastermind behind it but my step grandmother got off way to easy for her roll in all of this. There is a man the the FBI never cought he was my grandfather's right hand man. I believe that if they ever catch my grandfather's right hand man my grandfather's sentence will be less then what is now. Thank you.

Posted by: Derrick Schmidt | Mar 3, 2010 3:07:45 PM

Also for Mr. Douglas A. Berman my grandfather's sentence was the thrid highest White Collar Crime history.

Posted by: Derrick Schmidt | Mar 3, 2010 3:10:18 PM

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