« Guest post with more thoughtful perspectives on Peugh | Main | SCOTUS wraps its sentencing docket with another defense win (and Alito dissent) in Descamps »

June 20, 2013

"White-Collar Sentences Get a Fresh Look"

The title of this post is the headline of this notable new Wall Street Journal article, which gets started this way:

A hearing scheduled for Friday in a Houston federal court on whether to substantially reduce former Enron Corp. Chief Executive Jeffrey Skilling's 24-year prison sentence comes at a time of growing debate about the rules for punishing white-collar criminals.

Individuals convicted of federal crimes are sentenced using a set of guidelines in which "points" are added or subtracted relating to various aspects of a person's conduct and the crimes involved. Over the past several decades, the potential penalties for a range of crimes have greatly increased in severity, with particularly large increases in certain types of fraud cases, according to legal experts.

Critics of the guidelines in white-collar cases contend that they have come to rely too much on financial-loss calculations, which can quickly mushroom when the crime involves a public company whose stock price falls in connection with the misdeeds. In certain cases, a public-company executive could face life in prison, said James Felman, a Tampa, Fla., defense attorney and member of a recently formed American Bar Association task force looking at proposing revisions in the guidelines for economic crimes.

The U.S. Sentencing Commission, the guideline-writing body created by Congress in the 1980s, has identified possible revision of the economic-crime rules as a priority. The commission has scheduled a September symposium in New York to get input on possible changes.

The guidelines "should be scrapped in their entirety," said Jed Rakoff, a New York federal judge and member of the new ABA Task Force, in a speech earlier this year. For instance, putting heavy emphasis on the calculated loss in determining fraud sentences "does not fairly convey the reality of the crime or the criminal," said Judge Rakoff, a Clinton appointee and longtime critic of aspects of the guidelines. He recommended replacing the arithmetic calculation system with one where judges could use a broad set of factors, none of which would automatically carry extra weight.

More judges seem to be departing from the guidelines. A Sentencing Commission study issued last December found that the percentage of fraud cases in which federal judges gave sentences below the guideline recommendation jumped to 23% of cases for 2007 to 2011 from 9.6% for 1996 to 2003. These percentages don't include cases where the Justice Department recommended a below-guideline sentence for reasons that included cooperation by the defendant in an investigation.

The increasing gap between the guideline calculations and actual sentences was a factor in the Sentencing Commission's decision to look at revising the economic-crime rules, said one person familiar with the matter.

June 20, 2013 at 09:13 AM | Permalink


TrackBack URL for this entry:

Listed below are links to weblogs that reference "White-Collar Sentences Get a Fresh Look":


In road-safety planning and other areas there's a concept of Cost Per Life Saved, used to allocate funding for safety improvements. Perhaps it's dated, but I recall a figure of something like $3 million. This is the cost to make improvements that will prevent a single traffic fatality.

In my opinion crimes of fraud, theft, or mis-allocation of public funds in an amount greater than this should be prosecuted as a capital offense.

Posted by: Boffin | Jun 20, 2013 11:59:45 AM

That is the most breathtaking non sequitur I have seen today.

Posted by: Def. Atty. | Jun 20, 2013 4:46:28 PM

Boffin. Wow. Very good, especially if you arrived at this conclusion independent of my previous comments.

I believe the most reliable valuation is straight salary left to be made. That is the real world amount someone is actually willing to pay for your worth to others (strangers). Say, $50,000 a year for 40 years, $2 million.

Current methodology uses market valuation by employees. Work at McDonalds, work on an oil rig, require the same education and training. Work on an oil rig causes more deaths. What is the premium required to get someone to work on an oil rig? Using this method, the current value of life is around $6 million.

If someone has destroyed $6 million in value by fraud, vandalism, arson, whatever, they have taken the life of wconomic person. There is no value made except by human labor. Find a diamond on the beach in 10 minutes of looking, that is still labor.

Someone who has destroyed $6 million in value by a criminal act should get the death penalty by mandatory sentencing guideline. This guideline would reduce the race disparity in the murder rate, and have many rich white join black gangbangers in the death penalty.

Appellate reviews will allow motions on errors of law. Appellate reviews should be taken from the hands of know nothing lawyers, really, mental cripples, made into babbling idiots by 1L. Reviews should be conducted by experienced investigators to reduce the rates of exoneration. The current system appears Twilight Zone crazy until you understand the rent seeking theory. Appellate review is not for accuracy. It is to generate government make jobs for lawyers on 2 sides and on the bench. These are worthless, destroy far more than $6 million, and deserve the death penalty as great frauds.

Posted by: Supremacy Claus | Jun 20, 2013 10:48:09 PM

Post a comment

In the body of your email, please indicate if you are a professor, student, prosecutor, defense attorney, etc. so I can gain a sense of who is reading my blog. Thank you, DAB