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September 11, 2019

Noticing the interesting (but perhaps not too consequential) guidelines "loss" issue lurking in the college bribery cases

This Wall Street Journal piece, headlined "Weighing the Sentencing of Parents in the College-Admissions Cheating Scheme," effectively covers the high-profile hearing yesterday that focused on whether defendants in the college admission scandal cases have produced "loss" in the technical parlance of the guideline sentencing world.  Here are excerpts:

A federal judge prolonged the suspense Tuesday over whether parents who have admitted to cheating to get their children into college will serve time in jail, deciding not to rule following a hearing on sentencing guidelines.

In a packed courtroom, U.S. District Judge Indira Talwani heard arguments in a legal debate that has pitted federal authorities against one another in the high-profile college admissions case.

Federal probation officials have pegged sentencing guidelines for the parents at zero to six months — a range often resulting in probation — finding there was no direct financial loss to any victims. Prosecutors are arguing that some prison time is the way to send a strong message that admission spots at prestigious U.S. universities can’t be bought and have proposed ways of calculating loss.

The government is asking for one to 15 months of imprisonment for the 11 parents set to be sentenced in the coming weeks, including actress Felicity Huffman on Friday. “This was a massive nationwide fraud case fueled through bribery, fraud and corruption,” Assistant U.S. Attorney Eric Rosen told the judge....

In a sign of what’s at stake — prison time or none — defense lawyers for the 15 parents who have pleaded guilty and for the 19 who haven’t admitted guilt filled the gallery of Courtroom Nine, spilling into the empty jury box. Other lawyers dialed into a conference line, though none spoke during the hearing.

A more lenient ruling by the judge could prompt more parents to plead guilty, defense lawyers said, while others might decide to try to clear their names at trial, figuring a light punishment is the worst outcome.

Judge Talwani gave no clear sign of how she’ll rule, but she didn’t reschedule Ms. Huffman’s sentencing currently on the calendar for Friday, suggesting a decision could come soon. She asked a series of often technical questions and indicated that a public airing of the legal dispute was a good thing.

Tuesday’s hearing represented a public clash that has dogged the largest college-admissions scandal ever prosecuted by the Justice Department: Who are the financial victims, and how should the length of any prison terms be decided?

Determining appropriate punishments is complex. Sentencing in federal fraud cases are typically calculated based on direct financial impact, either as loss for the victim or gain for the perpetrator. In plea agreements, the government considered the amounts parents paid to admitted scheme mastermind William “Rick” Singer as a proxy for loss, while also taking into account factors such as how actively parents participated or involved their children.

That means prosecutors are recommending one month of incarceration for Ms. Huffman, a sentence at the low end of the zero-to-six-month range. The “Desperate Housewives” and “American Crime” actress has admitted to paying Mr. Singer $15,000 to fix her daughter’s SAT score. But they are asking for substantially more prison time for some other parents, based on the amounts they admitted to shelling out to Mr. Singer.

Prosecutors say victims include the affected colleges, including the University of Southern California and Georgetown University, and standardized testing agencies. Colleges have been sued, have had to revamp policies and conduct costly internal investigations, they said. “All these events I talked about cost money,” Mr. Rosen said. “Money that came out of the victims’ pockets.”

Probation officials, who prepare influential sentencing recommendations for the court, have so far found that the parents’ conduct caused no clear pecuniary harm, according to a recent memo filed by Mr. Rosen.  In a filing Monday, the lawyer for one parent who has pleaded guilty called the losses alleged by the government either nonexistent or speculative.

I suggest in the title of this post that a ruling on this "loss" matter might not be too consequential for a couple of reasons: (1) for certain defendants, the loss determination may not considerably alter the applicable guideline sentencing range, and (2) Judge Talwani can surely justify above- or below-guidelines sentences in these cases on any number of reasonable 3553(a) sentencing grounds no matter what the final calculated range.  That said, all federal sentencing practitioners know that calculated guidelines ranges still have an important anchoring effect on the work of judges, and so it is not at all surprising that a whole lot of defense lawyers are interested in not losing this "loss" matter.

Prior related posts:

September 11, 2019 at 02:39 PM | Permalink


I would argue that "Loss" in this matter is very perceivable. There is the Loss of the integrity of the college application process. That a student with higher grades and higher acumen, but from a less financially well-off family should have the exact same chance of obtaining a coveted degree from these places. Instead, what the actions of these parents did was to completely undermine the faith in that process. I don't believe now the Parents can turn around and cry the blues. They perhaps knew exactly what they were doing. The VICTIMS are all those other students who perhaps were more eligible who did not get in because "first-come-first-serve" was allegedly based on the Key Money to be paid. That a student from a lower-income group had his or her application passed over in favor of more financially secure families who could pay the Key Money, IS A LOSS. ITs a loss to the student body, it's a loss to the institutions of higher education, it's a loss to that particular student who was passed over, and it's a loss to the integrity of the college application process.

Posted by: Tony Price | Sep 11, 2019 3:51:15 PM

Well stated, Tony, but not what the federal sentencing guidelines care about when defining "loss." The 2B1.1 guideline commentary references only "pecuniary harm" amd explains that pecuniary harm "means harm that is monetary or that otherwise is readily measurable in money. Accordingly, pecuniary harm does not include emotional distress, harm to reputation, or other non-economic harm." See https://guidelines.ussc.gov/gl/%C2%A72B1.1 (Commentary note 3(a)(iii)).

Posted by: Doug B. | Sep 11, 2019 6:11:40 PM

And how do you calculate the pecuniary harm when you can't identify who lost out on a spot? Most colleges that are "selective" in admissions "overbook" in the sense that they admit more people than they anticipate attending. (After all, there are going to be a significant number of students that will apply to two roughly equivalent universities to increase their chances of being accepted at one and get accepted at both. Some will pick University A and others will pick University B.) So maybe one of the people who failed to get into Yale due to the shenanigans got into Harvard instead. (Or in Ms. Huffman's case got into and went to a university somewhat equivalent to U.S.C.). Unless you can first determine that persons A, B, and C who ended up on the wait list would have got accepted but for the fraud and then can calculate the economic impact of having to go to the second choice school, how do you determine financial loss. And since all students are paying the same tuition and fees, I don't see how a university suffers any measurable financial loss because they admitted Jane Rich Kid over Doris Middle Class Kid.

Posted by: tmm | Sep 12, 2019 10:40:53 AM

It's very clear that there is no definable pecuniary harm and even the Government has not floated the notion that have any way of demonstrating any definable pecuniary harm. Instead, they want to use the amount of the bribes paid as a proxy. Which 2B1.1 doesn't allow. There is no actual loss. There is no "intended loss." It would quite an ordeal to for the Government to pursue the alternative "gain that resulted" theory since it requires that there was a loss. And while, under different guidelines, it would be indicated to use the amount of the bribes, those guidelines don't apply here. I think prosecutors have some possibly compelling 3553 arguments for custody, but they should never have pursued the loss theory. So kudos to the USPOs for bringing some thoughtful analysis to the case.

Posted by: SUSPO-Retired | Sep 12, 2019 5:39:35 PM

"There is no actual loss."

There is an actual loss. There may be no legal loss but there is an actual loss. This whole debate reprises the "honest services fraud" debate. The problem arises because there are some social harms that everyone recognizes as harms but can be difficult to quantify. This raises two question: should harms that are difficult to quantify be legally punished? And if so what evidence can be used to justify punishment? These are difficult questions that are intertwined.

Posted by: Daniel | Sep 12, 2019 8:28:50 PM

No, Daniel. There is no "actual loss" in the context of Prof. Berman's post and my comment, which deal with the mechanics of the Sentencing Guidelines. You're talking about non-monetary harm, which the guidelines direct can be addressed when determining the sentencing under 18 USC 3553, which is why I mentioned that statute. I should have put those two words in quotes maybe, but please don't conflate the guideline calculation issue that was the subject of the discussion with some broader (legitimate) idea. "Legal loss" is not a thing I have ever heard of. Where have you seen that term used in the law?

Posted by: SUSPO-Retired | Sep 13, 2019 7:58:31 PM

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