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January 14, 2010

Offender circumstances cited for big downward variance to convicted Refco lawyer

This ABC News report, which is headlined "Chicago Lawyer Sentenced to 7 Years in Prison," reports on the latest high-profile white-collar sentencing in which a below-guideline sentence was imposed. Here are the basics:

A Chicago lawyer was sentenced to seven years in prison Thursday by a federal judge who said his excessive loyalty to Refco Inc. led him to help the big commodities brokerage carry out a $2.4 billion fraud.

Attorney Joseph P. Collins, 59, of Winnetka, Ill., was sentenced by U.S. District Judge Robert P. Patterson in Manhattan after he was convicted at trial of conspiracy and other charges in the huge fraud at Refco.

Patterson cited Collins long history of charitable acts toward friends and his support of Chicago schools and the University of Notre Dame as he imposed a sentence considerably less than the 85 years in prison suggested by federal sentencing guidelines.

Patterson said the lawyer's loyalty to a customer led him to his crimes. "I don't believe Mr. Collins committed these crimes for greed, for money," Patterson said. "I think this is a case of excessive loyalty to a client," he said. "It's an admirable thing but in this case seems to have caused the crimes to be committed."

Patterson said it was necessary to give Collins a significant prison term as a message to lawyers that they can be held responsible if they are complicit in their client's crimes. He said he wanted "to deter other lawyers from doing this."

January 14, 2010 at 03:08 PM | Permalink


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I mean this sincerely but can anyone explain to me the moral or philosophical basis for this type of statement, "Patterson cited Collins long history of charitable acts toward friends and his support of Chicago schools and the University of Notre Dame as he imposed a sentence considerably less than the 85 years in prison suggested by federal sentencing guidelines."

So every 10K I donate to my alma mater gets me a free rape? I don't get that. I honestly don't understand what his prior "good works" has *anything* to do with his criminal sentence.

Posted by: Daniel | Jan 14, 2010 3:16:05 PM

Daniel --

As you correctly suggest, the problem with "prior good works" as a sentencing mitigator is that its practical effect is to allow the better off to buy their was to leniency.

Posted by: Bill Otis | Jan 14, 2010 4:03:04 PM

I basically agree with Bill Otis that consideration of “prior good works” tends to benefit the well-to-do. I would find it offensive if the entire variance from 85 years down to 7 years was due to that.

A more valid reason would be the simple fact that 85 years is simply too much for this type of crime. Daniel asked about a “free rape.” The irony is that in most jurisdictions, an actual rape would carry a lower sentence than the 85 years that the Federal guidelines recommended in this case. Anyone else see something wrong with that?

Posted by: Marc Shepherd | Jan 14, 2010 4:45:55 PM

Marc Shepherd --

Yes, I do. Eighty five years is a showboating sentence, and for a non-drug related and non-violent crime, just doesn't make common sense. It's an effective life sentence; indeed, at his age, a seven year sentence may be as well.

I was never a big fan of departures, but they are sometimes warranted, which is why they were justifiably provided for in the original Guidelines. Some downward departure here seems warranted, though a bought departure is never warranted.

Posted by: Bill Otis | Jan 14, 2010 5:36:40 PM

Part of the problem with the Guidelines is that they tend to emphasize things that are “countable,” whether it be the quantity of drugs, the number of pornographic images, the amount of the fraud, and so forth. If the countable factor is large enough (in this case, $2.4 billion), it basically obliterates the significance every other factor. Someone who stole $1 million from helpless little old ladies would be far better off under the Guidelines than someone like this defendant, who participated in a much larger fraud that involved many other people, and in which he personally did not receive any of the money.

Posted by: Marc Shepherd | Jan 14, 2010 6:04:32 PM

Not to give Supremacy Clod material to work with, but this is very similar to the variance Judge Amy St. Eve gave to the lawyer that worked for Lord Black - I think he was a "good works" fella as well. He got a substantially lower sentence than Black did and he was integral to the scheme in that case. Could this be "rent seekers" looking out for their own?

Ah... but I also recall seeing a lawyer who got an upward variance last year in a mortgage fraud case because, among other reasons, because she held a privileged public trust as a counselor at law. But I don't believe that case was north of the Mason Dixon line. Variance is really a perfect term for what goes on now.

Posted by: Ferris Bueller | Jan 14, 2010 6:04:37 PM

I want to make clear that my objection is not to the seven year sentence or even to the large downward variance. They are lots of reasons to vary. I just don't think good works should be one of them. I just don't understand the relationship. It seems to me that we are right back to buying and selling of indulgences again. Heck, since we have a market for everything these days, including pollution exchanges, why not have a "crime exchange" where the the rich could buy good works from the righteous poor.

Posted by: Daniel | Jan 14, 2010 9:48:42 PM

I don't understand your reluctance to recognize "good works" as a mitigating factor. Courts do all the time. See 171 Easy Mitigating Factors. Are you saying that the fact that someone has saved a child's life in the past from a fire, or thrown himself on a grenade and suffered grievous injuries to save his platoon, should not mitigate to any extent at all the same person's sentence later on when he's committed a first offense? Why not? Do we not consider the good and the bad. Or is the "good oft buried with their bones" That a man has devoted his life to charitable causes should not count at all when determining his sentence for a first offense? That's an odd and somewhat strange view of justice.

Posted by: Michael R. Levine | Jan 14, 2010 11:38:06 PM

First off, rape and fraud are very different offenses. One switches the subject when he/she talks about this case standing for the proposition that you get "one free rape." Second, nothing was "free" here. The defendant will be serving 7 years in prison. Third, prior "good works" should only be used if they truly are "prior" (i.e. done before any hint of criminal investigation) in order to ensure that what you are rewarding is a good character and not paying for your crime. Fourth, people (prosecutors, especially) tend to not like "prior good works" because it allows the court to focus on other things besides the (likely) worst thing this person has done in his life. Personally, I tend to think that a person is more and better than the worst thing they have ever done and that should be highlighted at sentencing.

With all that being said, there were a number of reasons to impose a variance in this case, and prior good works was just one of them. The Guideline here was out of control.

Posted by: DEJ | Jan 15, 2010 12:03:36 PM

The fraud guidelines are almost uniformly rejected by sentencing courts. Why? Because Congress got involved due to public outcry and put their collective thumb on the scale-- without reasoned consideration of how sentencing actually works.

Check our Frank Bowman's work on sentencing high loss offenders. The guidelines are completely unhinged from reality in this area.

Posted by: Jimmy | Jan 15, 2010 12:18:16 PM

@Daniel-- re "good works" consideration at sentencing

Courts have to consider these arguments at sentencing. 18 USC 3553(a) requires the court to consider the history and characteristics of the defendant.

I do agree that wealthier people have more opportunity to demonstrate flashier "good works" than do poorer offenders. However, judges can certainly consider all types of conduct-- not just endowing a chair at Notre Dame, but perhaps taking in a foster child or allowing neighborhood kids to hang out at your house after school until their parents get home. While these arguments tend to trigger a knee-jerk "so what, she defrauded a bank, what does that have to do with her crime" type of resposne, courts need to get a better idea of the person they are sentencing.

It's a way to provide a fuller picture. As someone mentioned above, as a defense attorney you don't want your client to be defined by his/her worst moment.

Posted by: Jimmy | Jan 15, 2010 12:23:37 PM

Michael. The fact that courts do it all the time is irrelevant. I think that history conclusively demonstrates that it leads to assorted evils much worse than whatever good it might produce. That slippy slope claim is not merely theoretical but backed up by historic practice. Do some serious study of the practice of indulgences.

The second point (which also responds to Jummy's post as well) is that "considering" the good and the bad is acceptable. But they must be fairly weighed. If we are going to consider his prior "good works" then why should the state not inquire if he a wife-beater, a drunkard, a homosexual, or various other things a judge may or may not consider to be socially harmful. I think such things have about as equal relevance as his "good works". If we are going to inquire into his past we should inquire into his *whole* past. To take one very narrow aspect of a criminal's past and counterpoise that to one very narrow aspect of his present produces all sorts of logical and practical anomalies that are irrelevant to any concept called justice.

Posted by: Daniel | Jan 15, 2010 12:38:23 PM

Jimmy: The courts are NOT uniformly rejecting the fraud guidelines.


See page 33.

Also, I can't find the data right now, and I have to run, but I also recall seeing that the non-government sponsored variance and departure rate for 2B1.1 is pretty much in line with the rest of the guidelines - i.e. well within 80-85% compliance post-Booker.

I understand this is the dream of all white collar practitioner, that they get the loss figure tossed and everyone goes back to the house, but the stats just don't bear that out.

Posted by: Ferris Bueller | Jan 15, 2010 5:33:54 PM

Daniel, you ask: "If we are going to consider his prior "good works" then why should the state not inquire if he is a wife-beater, a drunkard, a homosexual, or various other things a judge may or may not consider to be socially harmful."

Judges should indeed consider these things, and they do. In federal court, Congress requires judges to consider the good and the bad. See 18 U.S.C. Section 3661 ("No limitation shall be placed on the information conerning the background, character, and conduct of a person convicted of an offense which a court of the United Sttes may receive and consider for the purpose of imposing an appropriate sentence."); 18 U.S.C. 3553 (a) (in determining the sentence court must consider, among other things, "the history and characterisitcs of the defendant").

Posted by: Michael R. Levine | Jan 15, 2010 6:23:28 PM

Daniel, regarding my last post, of course the bad or good factor must be relevant. Homosexuality is not relevant so that factor should not and could not lawfully be considered.

Posted by: Michael R. Levine | Jan 15, 2010 6:27:27 PM

In high loss fraud cases--- the ones we hear about on TV, etc.-- the guidelines are almost uniformly rejected.

See the Bowman article I reference above.

The stats you cite also take into consideration "simple" fraud cases where the GLs don't tack on a multitude of redundant enhancements. You can get to life in a hurry, even for a first-time offender, once a big-time corporate offender is dragged through the garden of enhancements.

Posted by: Pedro | Jan 17, 2010 12:15:25 PM

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