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June 26, 2011

Feds ask for (inappropriate?) 385 years(!) for white-collar offender

As detailed in this Wall Street Journal article, headlined "U.S. Seeks 385 Years in Prison for Ex-Taylor Bean Chairman, the federal government is asking for a sentencing term of biblical proportions in a high-profile white-collar case out of Virginia. Here are the particulars:

Federal prosecutors said the former chairman of mortgage lender Taylor, Bean & Whitaker Mortgage Corp., Lee Farkas, should spend the rest of his life behind bars because he continues to deny responsibility for the devastation he wrought as the mastermind of a multibillion-dollar "fraud of staggering proportions."

Prosecutors on Thursday filed court papers urging U.S. District Judge Leonie M. Brinkema to impose the statutory maximum prison sentence of 385 years on Mr. Farkas, whom a jury in April found guilty of 14 counts of conspiracy and bank, wire and securities fraud.  Mr. Farkas, 58 years old, is set to be sentenced next Thursday.

On Friday afternoon, Mr. Farkas's attorneys filed court papers requesting a sentence of 15 years, which they said would not only "adequately punish" Mr. Farkas but could also effectively be a life sentence for the 58-year-old man with a heart stent....

Mr. Farkas, who built up Ocala, Fla.-based Taylor Bean into one of the nation's biggest mortgage lenders, was found guilty of misappropriating about $3 billion from banks such as Colonial Bank of Montgomery, Ala., and of trying to fraudulently obtain more than $550 million from the government's Troubled Asset Relief Program, or TARP.

Prosecutors said Mr. Farkas personally pocketed $40 million from the scheme, which he used to buy a jet, an "exotic" car collection, multiple homes and businesses.  "Farkas fueled his lifestyle of ostentatious wealth by ripping off banks and attempting to steal from the government, all with little to no regard for the consequences to TBW's or Colonial Bank's employees, thousands of whom lost their jobs when TBW and Colonial Bank closed," prosecutors said.  "And to this day … Farkas continues to deny any responsibility for the devastation brought on by the staggering fraud scheme that he initiated and led."...

In addition to the 385-year prison sentence, prosecutors are also asking that Judge Brinkema order the forfeiture of $42.2 million from Mr. Farkas.

Meanwhile, dozens of letters from Mr. Farkas's friends, family members, former employees and other acquaintances have come in urging the judge to be lenient.  The letters describe Mr. Farkas's philanthropy not only in the Ocala community but also in their lives, from helping people care for sick relatives, start their own businesses and fund college educations.

This month, Judge Brinkema handed down sentences for Mr. Farkas's co-conspirators in the scheme.  Taylor Bean's former chief executive, Paul Allen, and former president, Raymond Bowman, received 40 months and 30 months in prison, respectively.  Taylor Bean's former treasurer, Desiree Brown, received a six-year sentence, while Colonial Bank officials Catherine Kissick and Teresa Kelly received sentences of eight years and three months, respectively.

The disparity between those sentences and the proposed sentence for Mr. Farkas is warranted, prosecutors said.  "Farkas's co-conspirators are generally decent people who made terrible decisions and failed to extricate themselves from a fraud scheme spiraling out of control. Farkas can hardly be included in this category," they said.  "For years, he manipulated his co-conspirators and others to his personal advantage...Farkas exemplifies the adage that there is 'no honor among thieves'."

Prosecutors also said that handing down the highest-possible sentence to Mr. Farkas would serve as a powerful deterrent to executives lured by the promise of easy corporate profits and substantial riches for themselves.

I do not dispute (and neither does the defense team here, it seems, that Farkas merits a serious punishment for his serious crimes.  But it strikes me as a bit silly and arguably inappropriate for the Government to assert that only a maximum term of 385-years imprisonment qualifies as "sufficient, but no greater than necessary" for Lee Farkas under the terms of 3553(a).  Seem to me that for a 58-year-old offender, a sentence of, say, 100 years would seem to be more than enough to achieve whatever purposes that prosecutors deem critical.  But, remarkable, the feds think they need to ask for more than triple that length of sentence for this offender.

June 26, 2011 at 09:27 PM | Permalink


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It is absolutely incredible that the AUSA (of course in the name of the Grandmaster - the USA himself - is aking for 385 years. The AUSA perhaps must think that he is Peter Pan incarnate! What is even more ludicrous is that the same prosecutor sealed the deal with Farkas' coconspirators for their sentence of 30 and 40 months' imprisonment just for ratting out the big kahuna. That is why I honestly think that we should get rid of the plea-bargaining system. It is a cancer on our criminal justice system that keeps growing totally unchecked and mutating to worse and worse forms. I just hope that Judge Brinkema see through the scatological smokescreen to get the "real" picture. Then, it may only just be my wishful thinking! WE REALLY do need to reform our judicial system. Please see my comment at: http://sentencing.typepad.com/sentencing_law_and_policy/2011/06/recognizing-that-the-two-scotus-former-prosecutors-often-disagree.html

Posted by: John Marshall | Jun 26, 2011 11:42:07 PM

i think this AUSA and his/her bosses if they support it are RETARDED! anything past LWOP is just plain retarded! or grandstanding.

i also agre once this same idiot agreed to 30 and 40 months for his associates it's just plain retared to then demand 3000 months for this guy!

Posted by: rodsmith | Jun 27, 2011 12:19:21 AM

If a crime destroys more than $6 million in value, then the economic value of the life of a person has been murdered. The death penalty is needed for any crime causes more than $6 million in damages, including legal costs. The value of a human life should be recalculated and posted clearly every year by a neutral quasi-governmental economics organization, to serve notice about a death penalty line to all white collar criminals. The organization should not belong to the DOJ, a prosecutorial agency, but perhaps to the Labor Department.

Posted by: Supremacy Claus | Jun 27, 2011 5:58:29 AM

When is the criminal justice system going to come to terms with the notion that the relationship between an appropriate sentence length and the harm caused by a crime necessarily is, and should be, non-linear?

A three billion dollar property crime simply does not call for a sentence a hundred times as long as a thirty million dollar property crime.

Likewise, how hard can it be for the alleged technocratic geniuses at U.S. Sentencing Commission to recognize that human beings do not have infinite life expectencies. Would it be so hard to adopt a guideline that states that any sentence in excess of the defendants' life expectency plus 20 years, or perhaps in excess of the defendants' 95th percentile life expectency, is unnecessary for a crime that does not actually carry a life sentence.

Finally, there are, of course, no crimes that carry a maximum sentence of 385 years on the books. Legislatures aren't that absurd. All of these superlong sentences, of course, arise from consecutive sentencing for multiple crimes, and the AUSA is presumably concerned about any precedent that could undermine the ability to have consecutive sentences for half a dozen small crime thereby producing a long sentence for individually minor felonies. Ultimately, the solution in these cases if for Congress and state legislatures to take a harder look at how consecutive sentencing plays out in the real world and decide when this really reflects their intent, and when it produces sentences that circumvent the proportionatity between the crime and sentence that they intended in the larger scheme.

Posted by: ohwilleke | Jun 27, 2011 2:06:15 PM

Supremacy Claus should read US v. Parris, 573 F. Supp. 2d 744 - Dist. Court, ED New York 2008 (yes, you can see it easily---Using Google, go to More---click
Google Scholar--search for case)--where guidelines for a white collar case called for 360 months to LIFE. Here the Judge does an exhaustive opinion on what are the appropriate punishments for white collar cases--and it certainly doesn't call for DEATH!! Surely we are only talking about money here--not a life for a life. Even death penalty cases where there is in fact a justification of a life for life leaves many uncomfortable. Also, be aware that many white collar cases consist of unique facts and gray areas that we EXPECT judges, particularly those who sat through a trial to be able to discern and weigh, and mete out an appropriate punishment.

Posted by: folly | Jun 27, 2011 2:07:22 PM

Showboating by public officers is always unappetizing. It was unappetizing when Gov. Lincoln Chafee did it last week, and it's no better now with the Justice Department. What on earth is to be gained by seeking a sentence of more than, say, 50 years for a 58 year-old fraud defendant?

Posted by: Bill Otis | Jun 27, 2011 6:51:14 PM

The problem with your methodology of calculating (money damages wreaked by white-collar offenses and equating it to "life" is that every little thing could be prosecuted under the guise of white-collar offenses. Unfortunately, our Federal laws are so vague and expansive that everything is easily penalized without proper notice. That is why we now have 50 (going to be 52 very soon) tiles. I can go on and on with the list of offenses that a person potentially commits every day. A good read - for starters - is Harvey Silverglate's "Three Felonies a Day." (No, I am NOT a liberal, nor am I a conservative; I am just a human being as fallible as anyone else.) I can see Bill Otis's eyes rolling - actually all the way back!) One of my favorite sayings is: "If you look for s--t, then you are going to find it even up God's a--! With that said, if you show me a guy, then I will show you an unidicted/unconvicted felon.

Yes, Parris case is a fascinating study as to how judge really methodically "tried" to come up with a sentence. Surprisingly (actually, shockingly), the Government played ball! There are a couple of other cases with fairly extensive analysis on loss and restitution numbers - off the top of my head, I believe that they may be Atlantic Cast Iron (DNJ) and BP (SDTX?).

Posted by: John Marshall | Jun 28, 2011 6:15:17 AM

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