Sentencing Law and Policy

Prez Trump reportedly to announce support for FIRST STEP Act with sentencing provisions, greatly increasing its prospects for swift passage

This new CNN article, headlined "President Trump to announce support for criminal justice overhaul proposal," reports on encouraging news regarding efforts to get major federal criminal justice reform enacted in coming weeks. Here are the details:

President Donald Trump is expected to throw his support behind bipartisan criminal justice legislation during an event at the White House on Wednesday, two sources close to the process said.

Trump is scheduled to announce on Wednesday that he is supporting the latest iteration of the First Step Act, a bill that his son-in-law and senior adviser, Jared Kushner, has been working to craft and build support for alongside a bipartisan group of senators, the sources said.  The President will be joined by supporters of the legislation during the White House event, the sources said.

Supporters of the measure expect that Trump's explicit backing will help propel the prison and sentencing overhaul bill through Congress.  The President has wavered on whether to throw his support behind the bill in recent months, but the sources said he was swayed to back the bill on Tuesday after meeting with Kushner.

Trump's support came after several law enforcement associations announced their backing for the legislation.  The National District Attorneys Association, which represents 2,500 district attorneys and 40,000 assistant district attorneys, became the latest law enforcement organization to support the bill, according to a letter the group's president addressed to Trump....

The prosecutors' association's support for the legislation came on the heels of backing from several other law enforcement organizations, including the Fraternal Order of Police, International Association of Chiefs of Police, Law Enforcement Leaders to Reduce Crime and Incarceration and the National Organization of Black Law Enforcement Executives, which also penned a letter of support to Trump.

The Major Cities Chiefs Association and Major County Sheriffs of America also withdrew their opposition to the legislation, writing in a letter to Kushner dated Tuesday that they "endorse the objectives of the First Step Act" and the legislation "strengthens how Federal prisoners may be integrated into the community and set on a path to live positive and productive lives."  Less than two weeks ago, the groups wrote to Kushner to say they could not back the bill.

Opposition from since-ousted Attorney General Jeff Sessions and Republican Sen. Tom Cotton of Arkansas, in particular, served as key stumbling blocks to advancing the legislation, with both touting opposition within law enforcement circles -- an argument that is quickly fading as groups back the proposal.  Sources close to the process said the support from law enforcement associations is key to advancing the measure and securing the President's full-throated support.

Proponents of the bill made several changes to it to win backing from law enforcement groups, including stiffer sentencing guidelines for fentanyl-related offenses and a compromise provision to modestly expand the definition of a serious violent crime.

Now the question is whether enough Democrats will rally to support the compromise package or hold out for a more ambitious overhaul of the nation's sentencing laws. Sen. Cory Booker of New Jersey, who had announced his opposition to a previous version of the bill because he felt it did not go far enough, said Tuesday that he is still looking to get more changes to the bill.

Though I am not going to count any sentencing reform chickens until they are hatched and have been signed into law, I am inclined to start predicting that we are on the verge of a remarkable federal criminal justice reform achievement that will be the most consequential statutory reform in nearly 35 years.  (I am also inclined to recall pieces from late 2016, like the one blogged here, that astutely suggested federal criminal justice reform might still be a real possibility in the Trump era.)  I am not quite yet ready to start patting a whole lot of folks on the back, but I am getting close to wanting to start celebrating the culmination of five years of very hard work by lots of folks inside and outside the Beltway.  Fingers crossed.

Some of many prior related posts:

• House Judiciary Committee approves FIRST STEP Act by a vote of 25-5 after lots of discussion of amendments
• FIRST STEP Act passes US House of Representatives by vote of 360-59(!), but its fate in Senate remains uncertain
• Interesting new US Sentencing Commission analysis of possible impact of Sentencing Reform and Corrections Act of 2017
• Prez Trump pledges to sign prison reform that will be "best in the world"
• Large group of former prisoners urge Senate leaders to move forward with FIRST STEP Act
• An interesting political pitch for the FIRST STEP Act 
• Encouraging news from DC about prospects for prison reform with sentencing reform getting enacted in 2018
• FAMM provides detailed review of SRCA sentencing provisions most likely to be added to FIRST STEP Act
• Senator Cotton delivers faulty arguments to prop up faulty federal sentencing system
• Could enhanced FIRST STEP Act get more than 90 votes in the Senate if ever brought up for a vote?
• Senate Majority Leader Mitch McConnell promises floor vote on FIRST STEP Act after midterm election if more than 60 Senators want to move forward
• Prez Trump reiterates support for prison reform and says AG Jeff Sessions "gets overruled by me"
• Could the FIRST STEP Act, with sentencing reforms added, get through Congress in just a matter of weeks?
• Latest push for passage of FIRST STEP Act with sentencing reforms now afoot

Latest federal sentencing of corrupt New York pol results in former state senate leader Dean Skelos getting 51 months

This New York Post piece, headlined "Dean Skelos sentenced to more than four years in prison," reports on the latest high-profile political corruption sentencing from a state that always seeks to keep the white-collar lawyers busy. Here are the details:

Dean Skelos, once one of the most powerful men in Albany, was sentenced to more than four years in prison Wednesday for using his political office to benefit his do-nothing son — who was noticeably absent from court for his father’s day of reckoning.

Manhattan federal Judge Kimba Wood said she would’ve given the one-time state Senate majority leader less than 51 months behind bars given his advanced age, but tacked on an extra three months because she found he lied on the witness stand.  “Your repeated mischaracterizations and lies about your conduct warrant a three-month enhancement,” Wood told the 70-year-old disgraced pol.

Dean’s son, Adam Skelos, who was convicted alongside him at their retrial in July, was nowhere to be found in court, underscoring the father and son’s strained relationship. Adam will be sentenced later Wednesday afternoon.

In begging for leniency, Dean told the judge he hoped to one day repair their bond. “My son, Adam, I love him more today than yesterday,” he said, his voice cracking. “I always try to protect him and I failed. Although our relationship is strained, I hope one day it will be restored.” Dean also asked Wood to go easy on his only child. “I hope that you show him mercy so that he can be the father he wants to be,” Dean said.

The Long Island Republican, and Adam, 36, were convicted at their retrial in July of strong-arming companies seeking help from Dean into giving Adam no-show jobs and consulting gigs. The pair was first convicted in 2015, but the case was tossed on appeal — paving the way for the politician to take the stand in his own defense in July....

The feds had asked the judge — who sentenced Dean to five years after the first trial — to take it up a notch to at least six-and-a-half years. A lawyer for Dean asked for leniency, saying the case has already taken a severe toll on the once-powerful politician, including straining his relationship with Adam. Dean has also developed a drinking problem due to the stress, his lawyer said.

Adam Skelos was previously sentenced to six-and-a-half years in prison after the judge said the trial showed that he had “no moral compass.” Adam, who is expecting a second child with his fiancée next month, has also asked for leniency, saying the judge’s harsh words have forced him to seek help and to change.

As Senate majority leader, Dean Skelos served as one of the so-called “three men in a room” — the others being Gov. Andrew Cuomo and longtime state Assembly Speaker Sheldon Silver, who was sentenced in July to seven years for corruption.

Paul Manafort seemingly poised to get "senior discount" at upcoming sentencing

This new NBC News piece, headlined "Paul Manafort's health and age could help shorten his sentence," reports on the notable recent court appearance of a former presidential campaign manager and highlights how it could impact his upcoming sentencing. The piece is authored by Danny Cevallos, an MSNBC legal analyst, and here are excerpts:

Former Trump campaign manager Paul Manafort appeared in a Virginia federal court Friday in a wheelchair, missing his right shoe, and appearing visibly grayer.  His legal team advised Judge T.S. Ellis that Manafort was dealing with “significant” health issues related to his confinement, and asked the court to expedite his sentencing so that he could be transferred to a facility better equipped to take care of him.

There’s no question that incarceration has negative health effects.  It’s also likely part of a wise strategy for Manafort’s defense team to make these health issues known to the judge well in advance of the sentencing hearing.  Manafort’s age and infirmity can bolster a defense argument to the judge for a significant reduction in his sentence.

Federal judges are permitted to consider a defendant’s advanced age and health issues in order to impose fair punishment and provide essential medical care.  Following an amendment to the Federal Sentencing Guidelines in 2010, the defendant’s age and physical condition, including his physique, may be relevant in reducing a sentence.  However, this is only if the condition is unusual and distinguishable from other cases.  An extraordinary physical impairment or a seriously infirm defendant can justify granting home detention as a less costly option than imprisonment.  The guidelines permit the court to consider alternative forms of incarceration for such an offender if those alternatives are “equally efficient” as prison.

It’s not clear what health condition confined Manafort to a wheelchair with only one shoe on Friday.  The court may consider a defendant’s need for medical care when fashioning a sentence.  Courts have considered a variety of conditions during sentencing that can affect the feet, including diabetes, and gout.  Still, Manafort’s defense team should be prepared to show that these ailments are extraordinary, and they cannot be treated adequately by the Bureau of Prisons.

The Department of Justice has recognized that the aging process accelerates for prisoners.  Elderly prisoners such as Manafort are more vulnerable to predators. They require special physical accommodations in a place that is not designed for special accommodation.  According to the DOJ, the annual cost of incarcerating elderly prisoners has risen to an average of $60,000 to $70,000 for each elderly inmate compared with about $27,000 for others in the general population....

Elderly defendants are substantially less likely than younger offenders to commit new crimes after they are released.  The U.S. Sentencing Commission reported that over an eight-year period, only 13.4 percent of offenders age 65 or older were rearrested compared to 67.6 percent of offenders younger than age 21 when they were released.  Of course, expect the prosecutors to point out that after he was originally charged and out on release, Manafort committed new obstruction crimes by trying to influence witnesses. The government will surely counter that Manafort is one of those rare older offenders who is likely to commit new crimes — because he already did.

I am pleased this piece highlights the (too-often-ignored) 2010 revisions to the USSG policy statements concerning age and physical impairments as a possible relevant basis for a departure from the applicable guidelines.  But, as federal practitioners know, the guideline policy statements about departures are often ignored because judges have broad general authority to vary based on statutory 3553(a) factors regardless of what the guidelines say.  And, not to be forgotten, as reported in this prior post, Manafort's plea agreement caps his sentencing exposure at 10 years, but includes a calculation of his estimated "Sentencing Guidelines range [at] 210 months to 262 months' imprisonment."

Some prior related posts:

• Appreciating ugly sentencing realities facing Paul Manafort and Rick Gates after federal indictment 
• Paul Manafort has bail revoked ... and has not (yet) gotten rescued from jail by Prez Trump's clemency pen
• Paul Manafort found guilty of 8 of 18 counts ... and now faces real possibility of spending many years in federal prison
• Reported sentencing details in Paul Manafort's plea deal to wrap up his various federal prosecutions
• Paul Manafort's DC plea agreement has a calculated guideline range of 17.5 to 22 years (though he can only get 10) 

Reported sentencing details in Paul Manafort's plea deal to wrap up his various federal prosecutions

Politico has this extended article with some of the details of the plea deal completed today between the federal government and Paul Manafort.  Here are excerpts with an emphasis, of course, on sentencing particulars:

President Donald Trump's former campaign chairman Paul Manafort has agreed to cooperate with special counsel Robert Mueller under a plea agreement revealed Friday. Manafort appeared in a Washington, D.C., courtroom Friday morning, looking relaxed in a suit and purple tie, to formally announce the deal.

The deal dismisses deadlocked charges against Manafort from an earlier trial, but only after "successful cooperation” with Mueller’s probe into Russian election interference and whether the Trump campaign coordinated with Moscow on its efforts. Later, U.S. District Court Judge Amy Berman Jackson said Manafort is agreeing to "cooperate fully and truthfully" with the investigation.

The agreement also calls for a 10-year cap on how long Manafort will be sent to prison, and for Manafort to serve time from his separate Virginia and Washington cases concurrently.  But it will not release Manafort from jail, where he has been held since Mueller's team added witness tampering charges during the run-up to the longtime lobbyist's trial.

Manafort addressed Jackson in a soft voice, saying “I do” and “I understand” as she asked him whether he understood what rights he’s giving up. “Has anybody forced you, coerced you or threatened you in any way?” she asked later. “No,” Manafort replied, in a barely audible voice. A deputy marshal stood directly behind Manafort, a reminder that he remains in custody.

Legal experts quickly spun the deal as a win for all the parties involved. Manafort gets a potentially shorter sentence and lessens his legal bills. Trump avoids several weeks of bad headlines ahead of the midterm elections about his corrupt former campaign aide. And Mueller — faced with Trump's constant claims that his probe is a witch hunt — gets to show yet again that his charges are not fabricated and can now divert resources to other elements of his Russia probe....

Trump’s personal attorney Rudy Giuliani insisted the president and his lawyers were not concerned about Manafort cutting a deal. "Once again an investigation has concluded with a plea having nothing to do with President Trump or the Trump campaign," he said in a statement Friday. "The reason: the President did nothing wrong."

White House press secretary Sarah Huckabee Sanders echoed those remarks in her own statement. "This had absolutely nothing to do with the President or his victorious 2016 Presidential campaign," she said. "It is totally unrelated.”

Prosecutors signaled the pending deal Friday morning, filing a new slimmed-down set of charges against Manafort, reining in the felony counts pending against him in D.C. from seven to just two: conspiracy against the U.S. and conspiracy to obstruct justice....

Last month, a jury in Alexandria, Virginia, convicted Manafort on eight felony charges in a tax-and-bank-fraud case also prosecuted by Mueller’s team. The jury deadlocked on 10 other counts, but a verdict form said the jurors were split, 11-1, in favor of conviction on those charges.

Many Trump aides and advisers have said they believe the president is likely to grant Manafort a pardon on all the charges, which Trump has suggested amounted to prosecutorial overkill aimed at persuading Manafort to implicate Trump in wrongdoing in connection with the ongoing Russian investigation.

The charges filed Friday morning came in a criminal information replacing the current indictment in the Washington-based case against Manafort.  The new charges mean that prosecutors have agreed to drop five counts, including money laundering, failing to register as a foreign agent and making false statements. Manafort admitted to those allegations as part of the umbrella conspiracy-against-the-U.S. charge, but the individual charges and the potential prison time they carry are being dismissed.

Weissmann said Manafort is admitting to all of the bank-fraud charges from the Virginia case. While that means Manafort won’t face another trial over those federal charges, the admission could be critical to the issue of follow-up state charges, since bank fraud can typically be charged at the state and federal level.

Without seeing this plea agreement, it is unclear to me whether Manafort now has his sentencing exposure capped at 10 years for all of his convictions or just for those related to the second round of DC charges to which he today pleaded guilty.   I presume the latter, since I am not sure a DC-based plea deal could bind the sentencing discretion of the Virginia-based judge who will be sentencing Manafort on the charges which resulted in jury convictions last month.  The plea agreement could include, however, a representation by federal prosecutors that they will not seek a sentence longer than 10 years in the other part of the case (though I doubt it does).

Of course, the sentencing particulars could become academic if (when?) Prez Trump were to grant Manafort a pardon (which he could do at any time).  As of this writing, I am inclined to predict that Prez Trump will commute Manafort's sentence to reduce how long he spends in prison (rather than grant a full pardon), and do so sometime after the mid-term elections.  We might call this the "Libby treatment" as this is how Prez George Bush used his clemency powers to help our Scotter Libby after his perjury conviction but before he was sent to the federal penitentiary.  (And if Prez Trump was clever and savvy in this arena, he could and would include a commutation for Manafort within a list of dozens or hundreds of other commutations of "regular" offenders.)

You be the federal judge: what sentence for George Papadopoulos after guilty plea to one count of making false statements?

As reported in this Hill article, headlined "Former Trump adviser Papadopoulos to be sentenced Friday," a high-profile defendant is due to be sentenced in federal court this afternoon by Judge Randolph Moss.  Here are some of the terms of the sentencing debate:

George Papadopoulos, the Trump campaign adviser who pleaded guilty nearly a year ago to lying about his Russia contacts, is scheduled to be sentenced in federal court on Friday.

His sentencing will mark a milestone in Robert Mueller’s Russia investigation as the special counsel makes headway on several other fronts, including interviewing individuals linked to former Trump adviser Roger Stone and readying for the Washington, D.C., trial of former Trump campaign chairman Paul Manafort.

Papadopoulos admitted to lying to FBI agents in October about the extent, nature and timing of his contacts with Russian individuals who he tried to use to broker a meeting between the campaign and the Russian government.

Government prosecutors are asking that Papadopoulos be jailed for up to six months and that he face a $9,500 fine for his crime, arguing in a recent court filing that his false statements “caused damage to the government’s investigation into Russian interference in the 2016 presidential election.” “The defendant’s false statements were intended to harm the investigation, and did so,” prosecutors wrote in an Aug. 17 sentencing memorandum.

Papadopoulos’ defense attorneys, meanwhile, are challenging the notion that their client did deliberate harm to the investigation, writing in a filing on Aug. 31 that Papadopoulos “misled investigators to save his professional aspirations and preserve a perhaps misguided loyalty to his master.” They argue he should face one-year probation.

The Papadopoulos case is noteworthy because he was the first Trump associate to plead guilty and cooperate with prosecutors in Mueller’s investigation. There is no indication that he played more than a minimal role during his months as a foreign policy adviser on the campaign. The White House aggressively sought to downplay his involvement last year, with the president dismissing him as a “low-level volunteer” in a tweet following his guilty plea.

The sentencing of Papadopoulos, 31, will tie up one loose end in the special counsel’s sprawling investigation, and signals his cooperation is no longer needed in the investigation. His guilty plea created a media firestorm last October, revealed the same day Mueller charged Manafort and Rick Gates, another former Trump campaign aide, in an elaborate illegal foreign lobbying scheme unrelated to the work they did during for the campaign.

Court filings told the curious story of a young aide who misled FBI agents during a January 2017 interview about his contacts with a professor, later identified as Joseph Mifsud, who claimed substantial connections to the Russian government and who told Papadopoulos that the Russians possessed “dirt” on Hillary Clinton in the form of “thousands of emails” – months before hacked Democratic emails began to leak on the web. The New York Times later reported that it was Papadopoulos’ discussions with an Australian diplomat, Alexander Downer, about those emails in May 2016 that helped trigger the FBI’s inquiry into Russian interference the following July.

Papadopoulos also misled FBI investigators about his contacts with other Russians, including a woman believed to be a relative of Putin, who he sought to use to broker a meeting between the Trump campaign and Moscow – lies that the government says were damaging to an investigation in its infancy.

Prosecutors have suggested his cooperation did not bear much fruit, writing in August that he did not offer “substantial assistance” to the investigation and that much of the information he provided “came only after the government confronted him with his own emails, text messages, internet search history, and other information it had obtained via search warrants and subpoenas.”

The Papadopoulos defense attorneys tell a different story. They say that, since his guilty plea, he has provided government investigators with “critical information” about his contacts with members of the Trump campaign. In the recent filing, they referenced a key meeting in March 2016 during which he allegedly broached the subject of arranging a meeting between Donald Trump and Russian President Vladimir Putin....

Papadopoulos will be the second individual sentenced in the Russia investigation. Dutch lawyer Alex Van Der Zwaan was handed 30 days in prison and slapped with a $20,000 fine in April after pleading guilty to making false statements relevant to the government’s investigations into foreign lobbing by Manafort and Gates. Papadopoulos’ wife, Simona Mangiante, had signaled in recent weeks that her husband was mulling walking away from the plea deal with Mueller, though she backed down from those suggestions late last week.

Prior related post:

• In second sentencing from special counsel investigation, feds seeking incarceration "within Guidelines range of 0 to 6 months" for George Papadopoulos 

UPDATE: This Vox article provides the real outcome in its headline, "Papadopoulos given 14-day sentence as part of the Mueller investigation."

Former Enron CEO Jeff Skilling completes his time in federal prison

The name Jeff Skilling still stirs up a lot of sentencing thoughts for me because, 15 years ago, he was portrayed as one of the "worst-of-the-worst" white-collar offenders and he was one of the first very high-profile white-collar defendants to be sentenced after Booker made the guidelines advisory.  Consequently, this new article caught my eye under the headline "Former Enron CEO Jeff Skilling released from prison and sent to a halfway house." Here are the particulars and context:

Jeffrey K. Skilling, the former Enron CEO sentenced to a long prison term for his role in one of most notorious corporate fraud cases in history, was recently released from a minimum security federal prison camp in Alabama to a halfway house at an undisclosed location.

Enron's spectacular collapse cost investors billions of dollars and wiped out the retirement savings — not to mention the jobs — of thousands of employees.  Skilling, 64, was convicted of 12 counts of securities fraud, five counts of making false statements to auditors, one count of insider trading and one count of conspiracy in 2006 for his role in hiding debt and orchestrating a web of financial fraud that ended in the Houston company's bankruptcy.

He was sentenced to 24 years in prison and fined $45 million, the harshest sentence of any former Enron executive.  Five years ago, Skilling's sentence was reduced to 14 years by U.S. District Judge Sim Lake.  He is scheduled to be released Feb. 21, 2019, according to the Bureau of Prisons.

Federal prisoners are often released from prison several months early to a halfway house, a highly restricted dormitory-like setting that helps inmates ease back into society. They must maintain curfews, find work and stay out of trouble.  A. Kelley, assistant residential re-entry manager for the Bureau of Prisons in San Antonio, said the bureau would not say where Skilling is living.

The Bureau of Prisons typically sends inmates to a halfway house in their home city where they resided before incarceration.  It helps them re-acclimate to a more normal life and re-establish relationships with their families, said Philip Hilder, a white-collar defense lawyer who represented Sherron Watkins, a former vice president at Enron who went to then-Enron chairman Kenneth Lay to warn him of accounting irregularities she discovered while reviewing Enron's assets.

Inmates are typically required to get a job while they're at a halfway house and to report regularly to the federal probation department for up to three years, Hilder said. Skilling's lawyer could not be reached for comment.

Michael Cohen, Prez Trump's fixer, cuts a plea deal to fix his federal sentence between 46 to 63 months in federal prison

As reported here by USA Today, "Donald Trump's former personal lawyer and 'fixer' Michael Cohen, has pleaded guilty to charges including campaign finance fraud stemming from hush money payments to porn actress Stormy Daniels and ex-Playboy model Karen McDougal." Here is more (with a little sentencing emphasis):

The 51-year-old Cohen entered the plea in federal court in New York on Tuesday. The other charges involve bank fraud and income tax evasion.  As part of his plea agreement, Cohen agreed not to challenge any sentence from 46 to 63 months.

Cohen's plea follows months of scrutiny from federal investigations and a falling out with the president, whom he previously said he'd "take a bullet" for. FBI raids in April sought bank records, communications with Trump's campaign and information on payments to Daniels and McDougal. Both women claimed Trump had affairs with them, which he denies.

The deal comes after reports that federal investigators were looking into whether Cohen committed bank and tax fraud worth more than $20 million, according to a media report. The New York Times, citing anonymous sources, said authorities were focusing on loans obtained for taxi businesses owned by Cohen and his family.

Investigators were also considering whether Cohen had violated campaign finance and other laws when he made financial arrangements to pay women to stay silent about alleged affairs with then-candidate Trump back in 2016.... Prosecutors had reportedly considered filing charges against Cohen by the end of August.

I have not yet seen the plea agreement (which I hope will soon be publicly available), but I assume from the line stressed above that the guideline calculation puts Cohen's offense level at least 23 under the federal sentencing guidelines. The guideline range for a first offender is 46-57 months at level 23 and is 51-63 months at level 24. The bottom and top of these ranges seem to be the basis for the range reportedly in Cohen's plea deal (and this shows, yet again, how the guidelines are always an integral part of plea negotiations and why I consider every federal sentence to be "based on" the guidelines in some way or another).

UPDATE: The folks at Lawfare now have collected here the criminal information, waiver of indictment and plea agreement in US v. Michael Cohen.  The eight-page plea agreement has lots of interesting sentencing elements, and here is language (from pp. 4-5) confirming my speculations above and highlighting why there will be no departure discussions but lots of 3553(a) discussion as sentencing approaches:

Based upon the calculations set forth above, the defendant's Guidelines range is either 51 to 63 months' imprisonment under the Government's calculations, or 46 to 57 months' imprisonment under the defendant's calculations. Accordingly, the stipulated Guidelines range is 46 to 63 months' imprisonment (the "Stipulated Guidelines Range")....

The parties agree that neither a downward nor an upward departure from the Stipulated Guidelines Range set forth above is warranted.  Accordingly, neither party will seek any departure or adjustment pursuant to the Guidelines that is not set forth herein. Nor will either party in any way suggest that the Probation Office or the Court consider such a departure or adjustment under the Guidelines.

The parties agree that either party may seek a sentence outside of the Stipulated Guidelines Range based upon the factors to be considered in imposing a sentence pursuant to Title 18, United States Code, Section 3553(a).

Paul Manafort found guilty of 8 of 18 counts ... and now faces real possibility of spending many years in federal prison

As the Washington Post reports here, a "jury has found former Trump campaign chairman Paul Manafort guilty after a three-week trial on tax and bank fraud charges — a major if not complete victory for special counsel Robert S. Mueller III as he continues to investigate the president’s associates." Here is more:

The jury convicted Manafort on eight of the 18 counts against him. The jury said it was deadlocked on the other 10. U.S. District Court Judge T.S. Ellis declared a mistrial on those other charges. Manafort was convicted on five counts of filing false tax returns, one count of not filing a required IRS form, and two bank fraud counts....

The 18 charges in the Manafort trial centered around Manafort’s personal finances, and had little to do with the special counsel’s mandate of probing Russian interference in the 2016 election and whether any Trump associates conspired with those efforts. But the trial was the first to emerge from Mueller’s probe, and as such it marked a significant public test of his work. The jury deliberated for four days before announcing its verdict.

Over two weeks of testimony, more than two dozen witnesses, including his former right hand man Rick Gates, as well as his former bookkeeper and accountants, testified against Manafort. They said he hid millions of dollars in foreign bank accounts that went unreported to the IRS, and then later lied to banks in order to get millions of dollars in loans.

His lawyers had argued that Gates, not Manafort, was the real criminal, pointing to Gates’ admitted lies, theft, and infidelity. Gates pleaded guilty in February to lying to the FBI and conspiring against the United States, and has said he hopes to get a lesser prison sentence by cooperating against Manafort.

Prosecutors, in turn, told the jury that the most compelling evidence in the case were the dozens of documents, many of them emails, showing Manafort oversaw the false statements to the IRS and banks. Manafort, 69, called no witnesses at all, as his lawyer argued prosecutors had failed to prove beyond a reasonable doubt that he intended to defraud the government or banks. Manafort’s lawyers repeatedly suggested their client might not have known the law.

The trial featured heated arguments at times — not between the government and defense lawyers, but between U.S. District Judge T.S. Ellis and prosecutors. The judge repeatedly chided prosecutors in front of the jury, though at the end of the trial he urged the panel not to consider during deliberations any opinions he may have expressed.

Manafort faces a second trial in September in Washington DC, on charges that he failed to register as a lobbyist for the Ukraine government, and conspired to tamper with witnesses in that case. Manafort has been in jail since June as a result of the witness tampering charges....

Prosecutors charge that from 2010 to 2014, Manafort hid more than $15 million from the IRS — money he made as a political consultant in Ukraine. When that income ended in 2014, authorities charge Manafort lied to banks to get millions of dollars more in loans to support his extravagant lifestyle.

I speculated in this post from last year around the time of his indictment that Manifort could be looking at a decade in prison or longer following a conviction based on the large loss amounts connected to various charges.  This split verdict does not change my prediction that the significant amounts of money involved here means Manafort will be facing a significant guideline range at sentencing.  But his advanced age (and some of the behavior by the trial judge) leads me to think he might have a real shot at securing a below-guideline (but still substantial) sentence.

I expect some white-collar sentencing gurus might already have a sense of the guideline range that Manafort will be facing, and I will be interested to see sentencing arguments unfold in many arenas (including perhaps Twitter) in the coming weeks and months.  Of course, I welcome commentors sharing their take on what they think Manafort will get and should get for his crimes.

Prior related posts:

• Appreciating ugly sentencing realities facing Paul Manafort and Rick Gates after federal indictment 
• Paul Manafort has bail revoked ... and has not (yet) gotten rescued from jail by Prez Trump's clemency pen 

In second sentencing from special counsel investigation, feds seeking incarceration "within Guidelines range of 0 to 6 months" for George Papadopoulos

As reported in this New York Times piece, special counsel Robert Mueller and his team have submitted this sentencing memo in conjunction with the upcoming scheduled sentencing of George Papadopoulos. Here is how that memocrandum gets started:

The government submits this memorandum in connection with the sentencing of George Papadopoulosscheduled for September 7, 2018. On October 5, 2017, Papadopoulos pleaded guilty to one count of making false statements in violation of 18 U.S.C. § 1001(a).  The government does not take a position with respect to a particular sentence to be imposed, but respectfully submits that a sentence of incarceration, within the applicable Guidelines range of 0 to 6 months’ imprisonment, is appropriate and warranted.

The defendant’s crime was serious and caused damage to the government’s investigation into Russian interference in the 2016 presidential election.  The defendant lied in order to conceal his contacts with Russians and Russian intermediaries during the campaign and made his false statements to investigators on January 27, 2017, early in the investigation, when key investigative decisions, including who to interview and when, were being made.  The defendant was explicitly notified of the seriousness of the ongoing investigation, and was told that he may have important information to provide.  He was warned that lying to investigators was a “federal offense” that could get him “in trouble.”  Instead of telling the truth, however, the defendant repeatedly lied throughout the interview in order to conceal the timing and significance of information the defendant had received regarding the Russians possessing “dirt” on Hillary Clinton, as well as his own outreach to Russia on behalf of the campaign.  The defendant’s false statements were intended to harm the investigation, and did so.

In light of the defendant’s conduct and the lack of mitigating circumstances, the principles of sentencing set forth in 18 U.S.C. § 3553(a) call for a period of incarceration.

Here is more from the memo and context from the NY Times story:

Mr. Mueller’s memo said Mr. Papadopoulos did not provide “substantial assistance” to the investigation, and that “much of the information provided by the defendant came only after the government confronted him with his own emails, text messages, internet search history and other information it had obtained via search warrants and subpoenas.”

Thirty-two people have been charged by Mr. Mueller’s office since it took over the investigation in May 2017. The only defendant to be sentenced so far is the lawyer Alex van der Zwaan, who pleaded guilty to making false statements about his conversations with a former Trump campaign official. In April, a judge sentenced him to 30 days in prison.

Mr. Mueller’s office has not yet filed a sentencing memo in the case of Mr. Trump’s former national security adviser, Michael T. Flynn. He pleaded guilty in December to making false statements to investigators about his contacts with the Russian ambassador and agreed to cooperate with the authorities. Mr. Flynn was scheduled to be sentenced this year, but that has been delayed, suggesting that he is still cooperating with the government.

At resentencing, former New York Assembly speaker gets (only?) seven years in federal prison for corruption

As reported here by the New York Post, "Sheldon Silver, the disgraced ex-speaker of the New York state Assembly, was sentenced to seven years in prison — less than the 12 years he was sentenced to previously."  Here is the context:

The judge cited the 74-year-old Silver’s advanced age and the substantial monetary penalties she plans to levy, including a $1.75 million fine, in the lower sentence.

Silver was convicted in May — for a second time — of selling his office for $4 million in kickbacks, plus $1 million in profits, tied to two schemes. Before his arrest in 2015, Silver was one of the most powerful men in Albany — along with Gov. Andrew Cuomo and former Senate Majority Leader Dean Skelos.

At his 2016 sentencing, Judge Valerie Caproni — who sentenced him again this time around — ordered him to serve 12 years in prison and to forfeit nearly $5.2 in ill-gotten gains and another $1.75 million in fines. But Silver never served a day in prison because his 2015 conviction was overturned on appeal amid questions about the validity of the jury instructions, which were raised after the US Supreme Court narrowed the definition of bribery.

Silver’s lawyer Michael Feldberg has said he plans to appeal the second verdict as well, saying the feds once again failed to prove that Silver promised anything in return for the lucrative referrals he received....

During Friday’s sentencing, Caproni blasted Albany’s culture of corruption, noting that recent months have all “touched, directly and indirectly, the ‘three men in a room'” — the derisive term used to describe the governor and top leaders of the Senate and Assembly. “This has to stop,” she said. “New York state has to get its act together and do something institutionally to stop corruption.”

Still, she commended Silver for apologizing for his conduct this time around, which he did not do in 2016. “That was a wise decision on Mr. Silver’s part,” she said. “Mr. Silver’s conduct clearly caused discernible harm.” She also remarked on signs of wear and tear. “I feel like visually he’s aged more than the three years that have gone by chronologically,” she said.

Silver also spoke at the sentencing, saying that he is “extremely, extremely remorseful” for having “brought out a great deal of distrust in NY’s government.”

As noted in prior posts linked below, the original 12-year sentence given to Silver was still way below a calculated guideline range of 20+ years.  And this time around, the feds were asking for a sentence "substantially in excess" of 10 years.  So, Silver probably should feel a bit lucky he did not get an even longer term than seven years.  But even with some likely time off for good behavior, Silver now cannot be making any real retirement plans until 2025. 

Prior related posts:

• Another prominent elderly corrupt politician presenting dynamic federal sentencing issues
• Former New York Assembly speaker gets lengthy (way-below guideline) federal sentence for corruption
• "Can a criminal be sentenced to run a 'help desk'?" 

"Can a criminal be sentenced to run a 'help desk'?"

The question in the title of this post is the first line of this New York Times article about a high-profile upcoming federal (re)sentencing.  The piece is headlined "What Sentence Should Sheldon Silver Get? His Lawyers Get Creative," and here are excerpts:

Sheldon Silver, the former powerful speaker of the New York State Assembly who was convicted of public corruption charges in May, hopes [he can be sentenced to help-desk duty].

Mr. Silver, 74, is to be sentenced on July 27 in Manhattan, and federal prosecutors asked the judge on Friday to impose a sentence “substantially in excess” of 10 years. But Mr. Silver’s lawyers had a more creative proposal for how he could pay his debt to society.

After a “meaningful custodial sentence,” they suggested, he should be ordered to perform “rigorous” community service, like running a special help desk. In that role, they said, he would be helping New Yorkers “navigate their way through the state bureaucracy to answer their questions, and maximize their chances of receiving benefits to which they may be entitled.” He would be expressing his remorse, they said, and using “his unique skills to assist his fellow New Yorkers.”...

Evidence at the trial showed Mr. Silver obtained nearly $4 million in illicit payments in exchange for taking actions that helped a prominent cancer researcher at Columbia University and two real estate developers.... Mr. Silver, a Democrat, was originally convicted in 2015 and sentenced to 12 years by the judge, Valerie E. Caproni of Federal District Court. After his conviction was overturned on appeal, he was retried this year and found guilty.

“Mr. Silver is a broken man,” his lawyers wrote. “He has been humiliated and disgraced. Most of his assets are gone, either to forfeiture or fine.” But he “is also an intelligent man, with virtually unparalleled knowledge of New York State government,” they noted. Their proposal would allow the judge to exercise discretion “in a way that punishes Mr. Silver, but takes advantage of his unique talents and still affords the possibility of his living the end of his life in freedom.”

To provide a direct answer to the question in the title of this post, I would look to 18 U.S.C. § 3563(b)(12) which states that the court may provide that the defendant work "in community service as directed by the court” as a condition of supervised release. In other words, I think a federal defendant can be sentenced by a federal judge to run a help desk as a form of community service during a period of supervised release. Whether a federal judge will be inclined to do so for Sheldon Silver is another question.

Prior related posts prior to Sheldon Silver's initial sentencing:

• Federal district judge astutely asks feds for accounting of political corruption sentences before high-profile NY pol sentencing
• Another prominent elderly corrupt politician presenting dynamic federal sentencing issues

So how was it decided Reality Winner should get 63 months for leaking classified information? Does it seem about right?

The questions in the title of this post are prompted by this news out of the federal criminal justice system via the New York Times: "Reality L. Winner, a former Air Force linguist who was the first person prosecuted by the Trump administration on charges of leaking classified information, pleaded guilty on Tuesday as part of an agreement with prosecutors that calls for a sentence of 63 months in prison." Here is more of the particulars and some context:

Ms. Winner, who entered her plea in Federal District Court in Augusta, Ga., was arrested last June and accused of sharing a classified report about Russian interference in the 2016 election with the news media. Ms. Winner, who is now 26, has been jailed since her arrest and wore an orange prison jumpsuit and white sneakers to the hearing. Her decision to plead guilty to one felony count allows the government both to avoid a complex trial that had been scheduled for October and to notch a victory in the Trump administration’s aggressive pursuit of leakers.

“All of my actions I did willfully, meaning I did so of my own free will,” Ms. Winner told Chief Judge J. Randal Hall on Tuesday. Throughout the hearing, Ms. Winner kept her hands behind her back while she answered questions about whether she understood the terms of the plea deal.

Ms. Winner, who was honorably discharged from the Air Force in 2016, was working as a contractor for the National Security Agency when she obtained a copy of a report that described hacks by a Russian intelligence service against local election officials and a company that sold software related to voter registration. The Intercept, an online news outlet that a prosecutor said Ms. Winner admired, published a copy of the top secret report shortly before Ms. Winner’s arrest was made public. The report described two cyberattacks by Russia’s military intelligence unit, the G.R.U. — one in August against a company that sells voter registration-related software and another, a few days before the election, against 122 local election officials.

At a detention hearing last year, the prosecutor, Jennifer G. Solari, said that Ms. Winner had been “mad about some things she had seen in the media, and she wanted to set the facts right.”...

Once rare, leak cases have become much more common in the 21st century, in part because of such electronic trails. Depending on how they are counted, the Obama administration brought nine or 10 leak-related prosecutions — about twice as many as were brought under all previous presidencies combined.

The Justice Department prosecuted Ms. Winner under the Espionage Act, a World War I-era law that criminalizes the unauthorized disclosure of national-security secrets that could be used to harm the United States or aid a foreign adversary. Ms. Winner’s prosecution galvanized transparency advocates, who mounted a publicity campaign in her support that even included a billboard in Augusta, the east Georgia city where Ms. Winner lived at the time of her arrest. They were particularly infuriated by a judge’s ruling that she be held until her trial....

Ms. Winner is the second person known to have reached a plea agreement with the Trump administration to resolve a leak prosecution. A former F.B.I. agent, Terry J. Albury, pleaded guilty in April, but prosecutors in that case have signaled that they will ask that he serve 46 to 57 months in prison.

The Justice Department has brought at least two other leak-related cases under the Trump administration.  Earlier this month, James Wolfe, a former Senate Intelligence Committee staffer, was arrested and charged with lying to the F.B.I. about his contacts with reporters, including a Times reporter with whom he had a personal relationship and whose phone records the department secretly seized, during a leak investigation; Mr. Wolfe has not been charged with leaking classified information, however.  He has pleaded not guilty.  Also this month, Joshua A. Schulte, a former C.I.A. software engineer, with charged with violating the Espionage Act and other laws based on accusations that he sent a stolen archive of documents and electronic tools related to the agency’s hacking operations to WikiLkeas, which dubbed them the Vault 7 leak. Mr. Schulte had already been facing child pornography charges.

A judge must still decide whether to approve her sentence after reviewing a report that prosecutors will present.  But prosecutors’ recommendation of more than five years in prison — followed by three years of supervised release — was unusually harsh for a leak case.  For most of American history, people accused of leaking to the news media were not prosecuted at all.  In the flurry of cases that have arisen during the 21st century, most convicted defendants were sentenced to one to three-and-a-half years.

One — Chelsea Manning, who was convicted at a military court-martial for sending large archives of military and diplomatic documents to WikiLeaks — was sentenced to 35 years in prison, but served only about seven years because President Barack Obama commuted the remainder of her sentence.

As this article suggests, there is not a lot of history of sentences for these kinds of leaks, and arguably the Chelsea Manning case sets a notable benchmark for how high a sentence might go for this kind of illegal leaking. But there are lots of ways to distinguish Manning and Winner, and Winner still seems to be getting a sentence considerably more severe than most modern leakers. That said, if one believes that deterrence considerations are especially important and perhaps effective in this setting, perhaps it is particularly justifiable for federal prosecutors to try to throw the book at the few high-profile leakers who get convicted.

Notably, as this article notes, a federal judge has to decide whether to accept this particular plea deal with its built-in sentence of 63 months.  Comments are welcome concerning whether the judge out to have some pause about doing so.

Paul Manifort has bail revoked ... and has not (yet) gotten rescued from jail by Prez Trump's clemency pen

As detailed in this CNN piece, a very prominent federal defendant grew the number of Americans incarcerated yesterday when he had his bail revoked and was taken immediately to jail:

Former Trump campaign chairman Paul Manafort will await his trial for foreign lobbying charges from jail.  Two weeks after special counsel Robert Mueller's prosecutors dropped new accusations of witness tampering on him, US District Judge Amy Berman Jackson on Friday revoked Manafort's bail, which had allowed him to live in his Alexandria, Virginia, apartment under house arrest.

The order marked an end to almost eight months of attempts by Manafort to lighten his house arrest restrictions after he was charged and pleaded not guilty to foreign lobbying violations. "The harm in this case is harm to the administration of justice and harm to the integrity of the court's system," Berman Jackson told Manafort in court.

The judge emphasized to Manafort how she could not make enough rulings to keep him from speaking improperly with witnesses, after he had used multiple text messaging apps and called a potential witness on an Italian cellphone.  "This is not middle school. I can't take his cellphone," she said of Manafort.  "I thought about this long and hard, Mr. Manafort. I have no appetite for this."

Manafort also entered a not guilty plea to two additional charges levied against him last week, of witness tampering and conspiracy to obstruct justice. In total, he faces seven criminal charges in DC federal court. Three US marshals led Manafort out of the packed courtroom into the prisoner holding area immediately after the judge's ruling. He was not placed in handcuffs. Before he disappeared through the door, he turned toward his wife and supporters and gave a stilted wave.

Minutes later, a marshal returned to give Manafort's wife, Kathleen, still standing in the courtroom's front row, his wallet, belt and the burgundy tie he wore Friday. Court marshals held Manafort in the bowels of the courthouse for several hours following the hearing as they considered how to keep him protected from other inmates behind bars. He arrived about 8 p.m. at the Northern Neck Regional Jail in Warsaw, Virginia, 90 miles south of Washington.

In a tweet, President Donald Trump said the decision to revoke Manafort's bail was "tough," although he referred to it as a "sentence."

I cannot help but recall in this context the decision by Prez George W. Bush, made just under 11 years ago as reported here, to commute the entire prison sentence of I. Lewis "Scooter" Libby to spare him from having to serve his 30 month prison term after his conviction in the CIA leak case.  Notably, Prez Bush's clemency grant came down just a few hours after the DC Circuit refused to allow Libby to remain free on bail during the appeal of his conviction and sentence.  In other words, as soon as Libby was subject to spending even an hour incarcerated, Prez Bush was moved to act to keep him free.  Paul Manafort, notably, has not (yet) gotten the presidential consideration as he has now already spent one (of likely many) nights in jail without even yet having been convicted of anything.  

High-profile recipient of federal clemency headed to prison once more, and then...

The life and legal sagas of Mel Reynolds could surely serve as a remarkable movie script, but today it was the subject of (another) federal sentencing proceeding. This USA Today article, headlined "Former U.S. congressman Mel Reynolds is headed back to prison -- and then Africa," provides highlights from a remarkable life story:

Disgraced former U.S. Rep. Mel Reynolds is headed back to prison.  The controversial ex-congressman from Chicago was sentenced Thursday to six months in federal prison for failure to file income tax returns for four years, from 2009 to 2013, despite making about $400,000 as a consultant for two Chicago-area businessmen in Africa during that time.

Reynolds, a Democrat who served in the House from 1993 to 1995, saw his storybook political career upended when he was convicted in 1995 of sexual assault of a 16-year-old campaign worker.  While serving his sentence for the statutory rape conviction, Reynolds was convicted on a series of charges that included bank fraud, misusing campaign funds and making false statements to the Federal Election Commission.  Those charges resulted in an additional 78-month federal prison sentence.  He served 42 months on those charges before then-President Bill Clinton commuted the sentences.

The former congressman, who represented himself at his four-day bench trial last year on the tax fraud charges, insisted that the money he received was for business expenses and was not taxable income.  At his sentencing hearing, he made an argument that had he filed taxes he may have actually been owed a refund. U.S. District Judge Robert Gettleman noted that Reynolds' argument seemed to conflate tax credits with tax deductions, and dismissed it....

Born to a poor family in Mississippi and later living as a youth on public assistance in Chicago, Reynolds climbed his way out of poverty and earned advanced degrees at Harvard University and was awarded the prestigious Rhodes Scholarship at Oxford University before running for office. "It is really tragic that you squandered the type of opportunity you've had and failed to become what you could have become," Gettleman said before handing down the sentence.

Following the hearing, Reynolds struck a defiant tone in brief comments to reporters.  The former lawmaker, who is slated to begin his sentence Aug. 1, said that he planned to move Africa after he completes his prison term. He will receive credit for two months he spent in federal custody before posting bail ahead of his trial.  “I’m done with America,” Reynolds said. “I am going to go home to Africa. I’ve given up on America.”

Reynolds had entered a consulting agreement to hunt for business opportunities in Zimbabwe on behalf of two prominent Chicago-area businessmen, Elzie Higginbottom and Willie Wilson.  Higginbottom testified that he ended the partnership with Reynolds in 2012 after Reynolds managed to only land a single contract to sell latex gloves to Zimbabwe hospitals.  “Frankly, at the end of the day, (Reynolds) knew better,” federal prosecutors argued in their sentencing memorandum in which they recommended Reynolds face at least a two year prison sentence.  His “personal behavior has repeatedly reflected his willingness to engage in fraudulent, criminal conduct and his readiness to mislead and defy courts in an attempt to obstruct justice.”...

Reynolds argued that it was unfair that he “continue to be punished over and over” for his previous convictions.  "I started from nothing but I became something," Reynolds said. "To put me in jail serves what purpose?"

Should Prez Trump grant clemency to former Illinois Gov. Rod Blagojevich?

The question in the title of this post is prompted by this notable new commentary authored by Kristen McQueary for the Chicago Tribune. Here are excerpts:

Former Illinois first lady Patti Blagojevich is back in the spotlight, pulling every lever to convince President Donald Trump to award clemency to her imprisoned husband. In several media interviews, she has tried to build camaraderie with Trump by painting former Gov. Rod Blagojevich as a victim of FBI targeting and an overzealous prosecution.

That is sure to get Trump’s attention. But the better play might be appealing to Trump’s inside knowledge of the swamp — the trading of favors and campaign contributions between politicians and special interest groups. Trump knows it well. He was part of it. “Nobody knows politicians better than I do,” Trump said during a meeting with the Tribune Editorial Board in June 2015, shortly after he announced his candidacy for president. He was in town to speak to the City Club of Chicago and the editorial board invited him to stop by. He did, along with son Donald Jr.

During the meeting, we asked him about Blagojevich, who by then had been in prison for three years. The two had met on the set of “Celebrity Apprentice” in 2010 while the former governor’s corruption case was winding through the courts.

Here’s what Trump said then: “It was good having him on. I found him to be, I can only speak for myself, I found him to be a very nice guy. Not sophisticated. Had little knowledge of computers and things and you know we found that out … We found him to be very nice,” Trump said. “Now, he was under a lot of pressure at that point.

“I think that’s an awfully tough sentence that he got for what supposedly he did,” Trump said. “Because what he did is what politicians do all the time and make deals.”

Boom. What politicians do all the time. That has been the most compelling defense of Blagojevich throughout his controversial arrest, double trial and convictions. The feds placed two bugs and six wiretaps on his home telephone, his campaign office phone and his cellphone, and also bugged his friends and chief of staff. How many other politicians would end up in prison if the government listened to their conversations?

Yes, at two trials Blagojevich was rightfully found guilty on a total of 18 corruption counts for, among other things, trying to trade an Illinois U.S. Senate seat appointment for personal gain. Blagojevich deserved to go to prison. He lied to the FBI about a firewall that he claimed existed between his campaign fund and his government responsibilities. He tried to shake down campaign donors by withholding legislation they sought from state government....

Blagojevich has served six years of a 14-year sentence. Isn’t that enough?

Trump could grant him clemency and consider time served as punishment enough for what Blagojevich plotted. Remember, prosecutors arrested him before any transactions occurred.  They got him primarily on intent, not completion.  They also indicted Blagojevich’s brother to squeeze him but dropped the charges for the second trial, an admission that perhaps they were overzealous in their pursuits....

Trump knows the swamp.  He was the real estate mogul with a fat checkbook before he was president of the United States.  Plenty of politicians courted him and vice versa.  Will he look sympathetically on a fellow swamp thing?  He might.  He should.

Some of many older related posts on the Blagojevich case:

• You make the sentencing call: What sentence should Blago get?
• Early buzz that feds think Rod Blagojevich's guideline range is 30 years to life in prison
• Feds asking for prison term of 15 to 20 years for Rod Blagojevich
• "Prison is too good for Blago"
• Bold (and misguided?) prediction of 20-25 years in the federal pen for Blago
• Do would-be white-collar offenders actually "get the message" from long sentences?
• Blagojevich sentencing and the failings (and limits?) of the federal sentencing guidelines
• "Ex-Gov. Rod Blagojevich sentenced to 14 years"
•  As federal prosecutors urged, former Gov Blagojevich resentenced to same 14-year prison term despite a few vacated convictions

Prez Trump reportedly to pardon Scooter Libby

According to this ABC News piece, "President Donald Trump is poised to pardon Scooter J. Libby, the former chief of staff to Vice President Dick Cheney, according to sources familiar with the president’s thinking." Here is more:

The president has already signed off on the pardon, which is something he has been considering for several months, sources told ABC News.

The move would mark another controversial pardon for Trump and could raise questions as an increasing number of the president’s political allies have landed themselves in legal jeopardy. The White House has repeatedly said that no pardons are currently on the table for people caught up in the Russia investigation....

Libby was convicted in 2007 of lying to the FBI and obstruction of justice in the investigation into the leak of the identity of Valerie Plame, a former covert CIA operative. Then-President George Bush commuted Libby's 30-month sentence, sparing him prison time, but didn't pardon him.

After Libby claimed that he couldn't have been the source of the leak, multiple people came forward to testify that they learned of Plame's identity from Libby prior to when Libby said he had first received the information. At trial, Libby claimed to have simply forgotten he actually learned about the identity from Cheney a month before he said he had.

Since the conviction, Libby has since had his law license restored and former Virginia Gov. Bob McDonnell restored his voting rights in 2013. Many conservatives have been urging a pardon for Libby, including attorneys Joe diGenova and his wife, Victoria Toensing.

I am sincerely not sure what to say about this news, other than that I am tempted to go back and read some of the article I helped assemble for this October 2007 issue of the Federal Sentencing Reporter titled "Learning from Libby." I suppose I should be excited by the efforts of Prez Trump to make old issues of FSR great again.

Former South Korean Prez gets 24 years in prison from three-judge sentencing panel

I do not usually cover many sentencing stories from other countries, but this news out of South Korea struck me as blogworthy: "Park Geun-hye, South Korea’s Ousted President, Gets 24 Years in Prison."  Here are some of the particulars, via the New York Times:

Park Geun-hye, South Korea’s impeached and ousted president, was sentenced on Friday to 24 years in prison on a variety of criminal charges, in a case that exposed the entrenched, collusive ties between South Korea’s government and huge conglomerates like Samsung.

A three-judge panel at the Seoul Central District Court also ordered Ms. Park to pay $17 million in fines, in a ruling that marked a climactic moment in an influence-peddling scandal that shook the country’s political and business worlds.

Ms. Park’s conviction on bribery, coercion, abuse of power and other charges was the first lower-court ruling on a criminal case to be broadcast live in South Korea.  She is the country’s first former leader to be arrested and convicted of crimes since two former military-backed presidents were found guilty of sedition and corruption in the 1990s.

Ms. Park did not appear in court for her case on Friday.  She has refused to attend any court hearings since October, staying in her solitary prison cell, complaining of poor health and insisting that she is the victim of a political conspiracy.

Although Ms. Park is expected to appeal her prison term, the sentencing is likely to bring a sense of closure to the corruption scandal that engulfed her.  Her supporters, mostly elderly South Koreans, have insisted on her innocence, and hundreds of them protested outside the courthouse Friday, demanding her release and calling her a victim of “political revenge.”...

At the center of the scandal that toppled Ms. Park’s government is the allegation that she and Choi Soon-sil, a longtime friend and confidant, collected or demanded large bribes from three big businesses, including Samsung, the country’s largest family-controlled conglomerate. Separately, the two women were accused of coercing 18 businesses into making donations worth $72 million to two foundations that Ms. Choi controlled.

The same court panel that handled Ms. Park’s case called her and Ms. Choi criminal co-conspirators when it sentenced Ms. Choi to 20 years in prison on Feb. 13 on bribery, extortion and other criminal charges.

Ms. Park has tearfully apologized to the public, cutting ties with Ms. Choi and insisting that she was not aware of many of her friend’s illegal activities.  Her lawyers also appealed for leniency, arguing that the money collected from big businesses was not used for her personal gain.  Some of the alleged bribes taken from Samsung were used to finance the equestrian pursuits of Ms. Choi’s daughter.

In Friday’s verdict, Ms. Park was convicted of collecting or demanding nearly $22 million in bribes from three of South Korea’s top business conglomerates, including Samsung, Lotte and SK.  Separately, she was found guilty of coercing the three companies — and 15 other businesses — into making donations worth $72 million to two foundations controlled by Ms. Choi.

After plea to lying to special counsel, attorney gets 30 days (within-guideline) federal sentence

As reported here via Politico, "Special counsel Robert Mueller obtained the first sentence in his high-profile investigation Tuesday, as a Dutch attorney who admitted to lying to investigators was ordered into federal custody for 30 days." Here is more with an emphasis on sentencing details:

Former Skadden Arps lawyer Alex van der Zwaan, 33, pleaded guilty in February to lying to FBI agents about his contacts with former Trump campaign official Rick Gates and Konstantin Kilimnik, a suspected Russian intelligence operative who worked closely with Gates and former Trump campaign chairman Paul Manafort.

Attorneys for van der Zwaan pleaded with U.S. District Court Judge Amy Berman Jackson to forgo any prison time, give him a fine and let him return to his London home by August, when his wife is due to give birth. However, the judge said some time in jail was appropriate given van der Zwaan's offense and the fact that he is a lawyer.

“We're not talking about a traffic ticket,” she said. “This was lying to a federal officer in the course of a criminal investigation...This was more than a mistake. This was more than a lapse or a misguided moment."

In addition to the 30-day sentence, Jackson also imposed a $20,000 fine and two months of probation, but she said she would permit van der Zwaan to reclaim his passport and leave the country as soon as his month in custody is completed. It's not immediately clear where or in what type of facility he will serve the 30 days....

Van der Zwaan's defense asked that he be permitted to serve at a Bureau of Prisons center in Allenwood, Pennsylvania. The judge said Tuesday that she would recommend that, but federal policies usually dictate that a sentence of less than six months be served at a halfway house or at the D.C. jail.

One of van der Zwaan's defense attorneys, William Schwartz, argued that leniency was appropriate given the impact of the episode on the Dutch lawyer's family and on his legal career.  He is likely to lose his license as a solicitor in the United Kingdom, Schwartz said.

But Jackson was largely unmoved by those arguments, noting that van der Zwaan came from an upbringing of privilege and lacked any hardship that could have mitigated his actions. Van der Zwaan is married to the daughter of a Ukrainian-Russian energy mogul, German Khan, whom Forbes ranks 138th on its list of billionaires, with a net worth of $9.3 billion.

"This glass was dropped on a very thick carpet, which has cushioned him," the judge said of the defendant. She credited him for supporting himself and his wife in recent years, although she noted that van der Zwaan's father-in-law has provided funds to the couple since the attorney was fired from his job....

The fact that prosecutors are not requiring future cooperation from van der Zwaan suggests that they don't see him as a crucial player in the Trump-Russia saga. Prosecutor Andrew Weissmann said the defendant's reason for lying remains murky. "To be candid, we don't know what was motivating the defendant," Weissmann said. "We count on people to tell us the truth. We count on people to turn over documents that are responsive."

Defense attorneys said he lied to Mueller's team because he feared being fired if Skadden found out he had recorded work-related conversations without permission, including at least one with former Obama White House Counsel Greg Craig, a Skadden partner who oversaw the Tymoshenko report. Van der Zwaan was ultimately fired by the firm late last year, after his inaccurate statements to the Mueller team.

Weissmann said that concern about the consequences at Skadden could have been part of the explanation, but there was "reason to doubt that is simply the sole motive." Mueller's team offered no specific recommendation to Jackson on an appropriate sentence in the case. Weissmann said that was the special counsel office's policy, which he also followed as a federal prosecutor in Brooklyn.

Van der Zwaan spoke to the court only briefly during the sentencing hearing at the federal courthouse near Capitol Hill. "Your honor, what I did was wrong and I apologize to the court for my conduct," he said. He also apologized to his family for his actions.

Later in the hearing, Jackson said she did not detect great remorse. "The expressions of remorse, even those made on his behalf, were somewhat muted to say the least," the judge declared shortly before she imposed the sentence.

Jackson also rebuffed Schwartz's argument that van der Zwaan's freedom was curtailed in recent months as he spent his days at a "residential hotel" awaiting legal proceedings. "I'm not really moved by the complaint that he is in his hotel room with nothing to do," the judge said, saying he was not in custody and could have been doing community service to keep busy.

"This glass was dropped on a very thick carpet" is a quote I am going to have to remember.  And though not mentioned in this article, I am pretty sure the calculated guideline range in this matter was 0 to 6 months, so perhaps we ought also remember that the first sentence imposed in this matter emerging from the special counsel was a within-guideline (and not-bottom-of-the-range) sentence.

Judge Jed Rakoff sentences rapper DMX to one year in federal prison for tax fraud

US District Court Judge Jed Rakoff has long been a vocal advocate against mass incarceration and other problems he seeing is the operation of the federal criminal justice system. But that view did not preclude him from thinking he needed to send a notable white-collar criminal to federal prison yesterday as reported in this local article (which provides a nice short review of the parties' sentencing arguments):

Embattled rapper DMX was sentenced Wednesday to one year in prison for tax fraud — but insisted he wasn’t “like a criminal in a comic book” trying to scheme against the government.  DMX, real name Earl Simmons, admitted in November to evading $1.7 million in taxes. He was also given three years of supervised release.

The 47-year-old performer, whose top songs include “Party Up (Up in Here),” stood accused of hiding money from the IRS from 2010 to 2016 — largely by maintaining a “cash lifestyle.” “I knew that taxes needed to be paid,” Simmons said shortly before Manhattan Federal Judge Jed Rakoff handed down his sentence. “I hired people but I didn’t follow up. I guess I really didn’t put too much concern into it.

“I never went to the level of tax evasion where I’d sit down and plot . . . like a criminal in a comic book,” said Simmons, who grew teary at points during the proceeding.

Prosecutors had pushed for Rakoff to hit Simmons with a sentence ranging from four years and nine months up to five years in prison. In their sentencing papers, prosecutors urged Rakoff to "use this sentencing to send the message to this defendant and others that star power does not entitle someone to a free pass, and individuals cannot shirk the duty to pay their fair share of taxes."

Simmons' lawyers, Murray and Stacey Richman, asked Rakoff for a sentence of in-patient rehab. With treatment — and strict supervision — Simmons could keep performing, allowing him to repay his whopping tax debt, they insisted. They also floated the idea Rakoff could appoint a trustee who would oversee Simmons' business dealings — making sure the tax man got paid. They maintained that Simmons' traumatic and impoverished upbringing led him astray as an adult, including toward addiction and bad financial decisions — but that he has a talent to "make beauty out of ugliness."

The Richmans played the music video for Simmons' 1998 song "Slippin'", claiming lyrics such as "If I'm strong enough I'll live long enough to see my kids/Doing something more constructive with their time than bids" indicate his search for redemption through art. "He is the American dream, and sometimes the American dream takes you to court," Stacey Richman said. "He has been able to raise himself from the ghetto."

Rakoff sympathized with Simmons, saying he was another example of how "the sins of the parents are visited upon their children" — but felt prison was necessary to deter would-be tax fraudsters....

Other performers have done time for tax raps.

Former Fugees singer Lauryn Hill got a three-month sentence in federal lockup for not paying taxes on $1.5 million in income from 2005 to 2007.

Fat Joe, whose legal name is Joseph Antonio Cartagena, got four months in federal prison after he didn't file tax returns on more than $3 million in income.

Ja Rule, who is legally named Jeffrey Atkins, received a 28-month sentence for not filing tax returns that ran concurrently with a two-year weapons sentence, according to reports.

Federal judges fives "Pharma Bro" Martin Shkreli (waaaaaay-below-guideline) sentence of 7 years

As reported in this AP piece, "Martin Shrkeli, the smirking “Pharma Bro” vilified for jacking up the price of a lifesaving drug, was sentenced Friday to seven years in prison for defrauding investors in two failed hedge funds."  Here is more on what seems like a pretty interesting sentencing hearing:

The self-promoting pharmaceutical executive notorious for trolling critics online was convicted in a securities fraud case last year unconnected to the price increase dispute.

Shkreli, his cocky persona nowhere to be found, cried as he told U.S. District Judge Kiyo Matsumoto he made many mistakes and apologized to investors. “I want the people who came her today to support me to understand one thing, the only person to blame for me being here today is me,” he said. “I took down Martin Shkreli.” He said that he hopes to make amends and learn from his mistakes and apologized to his investors. “I am terribly sorry I lost your trust,” he said. “You deserve far better.”

The judge insisted that the punishment was not about Shkreli’s online antics or raising the cost of the drug. “This case is not about Mr. Shkreli’s self-cultivated public persona ... nor his controversial statements about politics or culture,” the judge said, calling his crimes serious.  He was also fined $75,000 and received credit for the roughly six months he has been in prison.  The judge ruled earlier this week that Shkreli would have to forfeit more than $7.3 million in a brokerage account and personal assets including his one-of-a-kind Wu-Tang Clan album that he boasted he bought for $2 million.  The judge said the property would not be seized until Shkreli had a chance to appeal.

Prosecutors argued that the 34-year-old was a master manipulator who conned wealthy investors and deserved 15 years in prison.  His lawyers said he was a misunderstood eccentric who used unconventional means to make those same investors even wealthier.  Attorney Benjamin Brafman told Matsumoto Friday that he sometimes wants to hug Shkreli and sometimes wants to punch him in the face , but he said his outspokenness shouldn’t be held against him.  He said he deserved a sentence of 18 months or less because the investors got their money back and more from stock he gave them in a successful drug company.”...

Before sentencing him, the judge said that it was up to Congress to fix the issue of the HIV price-hike.  And she spoke about how his family and friends “state, almost universally, that he is kind and misunderstood” and willing to help others in need. S he said it was clear he is a “tremendously gifted individual who has the capacity for kindness.”

She quoted from letters talking about generous acts like counseling a rape victim, teaching inmates math and chess, and funding family members.  The defense had asked the judge to consider the letters in its case for leniency, including professionals he worked with who vouched for his credentials as a self-made contributor to pharmaceutical advances.

Other testimonials were as quirky as the defendant himself.  One woman described how she became an avid follower of Shkreli’s social media commentary about science, the pharmaceutical industry, but mostly, about himself.  She suggested that those who were annoyed by it were missing the point.  “I really appreciate the social media output, which I see on par with some form of performance art,” she wrote.

Another supporter said Shkreli’s soft side was demonstrated when he adopted a cat from a shelter — named Trashy — that became a fixture on his livestreams.  Another letter was from a man who said he met Shkreli while driving a cab and expressed his appreciation at how he ended up giving him an internship at one of his drug companies.

In court filings, prosecutors argued that Shkreli’s remorse about misleading his investors was not to be believed. “At its core, this case is about Shkreli’s deception of people who trusted him,” they wrote.

Prior related posts:

• You be the federal judge: what sentence for "Pharma Bro" after his fraud convictions?
• "Pharma Bro" Martin Shkreli, facing decades under guidelines, seeks prison sentence of 12-18 months
• Federal prosecutors seeking (way-below-guideline) sentence of 15 years for "Pharma Bro" Martin Shkreli

Federal prosecutors seeking (way-below-guideline) sentence of 15 years for "Pharma Bro" Martin Shkreli

As reported in this new Reuters piece, "U.S. prosecutors on Tuesday said former drug company executive Martin Shkreli should spend at least 15 years in prison after being convicted of fraud, saying his lack of remorse and respect for the law justified a long time behind bars." Here is more, with a final point stressed for commentary:

The request by the Department of Justice came three days before Shkreli’s scheduled sentencing by U.S. District Judge Kiyo Matsumoto in Brooklyn federal court. Prosecutors called Shkreli “a man who stands before this court without any showing of genuine remorse, a man who has consistently chosen to put profit and the cultivation of a public image before all else, and a man who believes the ends always justify the means.”

Shkreli, 34, had requested a 12-to-18-month term following his conviction last August for lying to investors about the performance of his hedge funds MSMB Capital and MSMB Healthcare, and conspiring to manipulate the stock price of the drug company Retrophin Inc. Known as “Pharma Bro,” in part for his ability to attract attention, Shkreli is perhaps best known for raising the price of the anti-parasitic drug Daraprim by more than 5,000 percent in 2015, while serving as chief executive of Turing Pharmaceuticals, now called Vyera Pharmaceuticals....

Shkreli has been in jail since September, when Matsumoto revoked his bail after he offered social media followers $5,000 for a hair from former U.S. presidential candidate Hillary Clinton. On Monday, Matsumoto ordered Shkreli to forfeit $7.36 million of ill-gotten gains. She said he may be forced to give up assets such as a Picasso painting and a one-of-a-kind Wu-Tang Clan album if he cannot find the money....

In a letter to the judge last week, Shkreli said he accepted that he had made “serious mistakes,” but still considered himself “a good person with much potential.”

But prosecutors said that while in jail, Shkreli has privately expressed disdain for his conviction and the judicial process, providing further evidence he does not deserve mercy. It cited a January email conversation where Shkreli allegedly wrote “fuck the feds” and expressed hope for a big tax refund because only his “liquid money” was affected by the forfeiture. “Shkreli’s email communications confirm that any remorse he may express publicly is a carefully constructed facade,” prosecutors said.

A 15-year term is shorter than the minimum 27 years recommended under federal guidelines. Brafman has called that length “draconian and offensive.”

There is much in this story and in this high-profile sentencing that merits commentary, but I am especially struck by the decision by federal prosecutors to request a sentence here that is more than a decade below the advisory guideline range.  Recall that the May 2017 Sessions Memo said federal prosecutors "should in all cases seek a reasonable sentence under the factors in 18 U.S.C. § 3553. In most cases, recommending a sentence within the advisory guideline range will be appropriate."  This high-profile case is still more proof that federal prosecutors recognize that the applicable federal sentencing guidelines for at least some fraud offenses are not reasonable and can be unreasonable extreme by more than a decade.

Prior related posts:

• You be the federal judge: what sentence for "Pharma Bro" after his fraud convictions?
• "Pharma Bro" Martin Shkreli, facing decades under guidelines, seeks prison sentence of 12-18 months

"The Politics of Prosecution: Examining the Policymaking Role of Prosecutors"

The title of this post is the title of this new paper available via SSRN authored by Abhinav Sekhri. Here is the abstract:

This short paper focuses on prosecutors in the federal setting and contributes to this growing field of scholarship.  Through the lens of Prosecutorial Agreements in the sphere of corporate criminal liability, I demonstrate that prosecutors engage in important policy making exercises.  I argue that this analysis helps better understand the constrains in which prosecutorial discretion is exercises, and here I suggest how such an analysis offers a more nuanced reading of the prosecutorial charging practices in corporate crime over the last two decades.  I conclude by suggesting that examining the policymaking potential of prosecutors merits great attention today, as the importance of these actors within the criminal justice system is being appreciated beyond legal spheres.

"Pharma Bro" Martin Shkreli, facing decades under guidelines, seeks prison sentence of 12-18 months

As reported in this Reuters article, "Martin Shkreli, the former drug company executive convicted of defrauding investors in two hedge funds he ran, has asked a federal judge to sentence him to 12 months to 18 months in prison, much less than suggested federal guidelines."  Here is more:

Shkreli, 34, has been in jail since September, when U.S. District Judge Kiyo Matsumoto revoked his bail after he offered a $5,000 bounty for a strand of Hillary Clinton’s hair in a Facebook post.  Matsumoto is scheduled to sentence him on March 9.

Shkreli’s lawyers said in a court filing on Tuesday that a sentence of 27 years or more calculated using federal guidelines would be “draconian and offensive.” The filing included a letter from Shkreli, asking the judge for leniency.  “I accept the fact that I made serious mistakes, but I still believe that I am a good person with much potential,” he said.

In addition to the prison sentence, they proposed Shkreli complete 2,000 hours of community service and undergo court-mandated therapy....

Shkreli, nicknamed “Pharma Bro,” raised the price of anti-infection drug Daraprim by over 5,000 percent in 2015 while he was chief executive officer of Turing Pharmaceuticals.  A jury found him guilty last August of unrelated securities fraud charges.  They determined that he lied to investors about the performance of his hedge funds, MSMB Capital and MSMB Healthcare.  He also was found guilty of conspiring to manipulate the stock price of a drug company he founded, Retrophin Inc.

Shkreli’s investors eventually came out ahead after he paid them in shares of Retrophin, and in some cases through settlement agreements and consulting contracts with the company, according to testimony at trial.  However, Matsumoto ruled Monday that he would still be held responsible for defrauding investors out of millions of dollars, because he secured their investments through fraud.

Shkreli’s lawyers said in the filing that he made mistakes when communicating with his investors not because he wanted to steal from them, but because he “could not bring himself to admit failure.”  They also tried to counter the view that Shkreli was the “greedy Pharma Bro.” They pointed to his work at Retrophin to develop a drug for a rare childhood degenerative disease called PKAN that was used to treat some patients in Cyprus, as well as online relationships he has maintained with patients.  Even the controversial Daraprim price hike was meant to fund research into rare diseases, they said.

The filing included dozens of letters supporting Shkreli, including from family members and a former Turing employee who praised his “altruistic passion.”

Prior related post:

• You be the federal judge: what sentence for "Pharma Bro" after his fraud convictions?

Interesting sentencing details as former Trump campaign official Rick Gates pleads guilty and faces significant prison time

In this post from October following their indictment, I highlighted that former campaign officials for Prez Trump, Paul Manifort and Rick Gates, could be facing very significant prison terms in light of the charges and potentially applicable sentencing guidelines. Today, as reported here by BuzzFeed News, "Rick Gates, a former Trump campaign aide and longtime associate of former Trump campaign chair Paul Manafort, pleaded guilty on Friday in the criminal case brought by special counsel Robert Mueller's office." And the BuzzFeed News report includes these interesting legal and practical sentencing particulars:

The two counts in the new criminal information each have a maximum penalty of five years in jail. According to Gates' plea agreement with the special counsel's office, he faces an estimated sentencing guidelines range of between 57 and 71 months in jail and a fine between $20,000 and $200,000; those numbers could change when the guidelines range is ultimately calculated, the judge noted.

Gates' lawyer Thomas Green told the judge that he reserved the right to argue for a lower sentence based on Gates' "disproportionate conduct" as compared to Manafort. Gates has agreed to cooperate with the special counsel's office. If prosecutors determine he has "provided substantial assistance," they have agreed to file a motion asking for a downward departure from the sentencing guidelines range. When Gates is sentenced, the government will dismiss the remaining counts in the original indictment as well as the new charges filed in Virginia.

As part of the plea deal, Gates agreed to delay his sentencing to give him time to cooperate. Asked how far out into the future the judge should set a deadline for the government to update the court on the status of the case, special counsel prosecutor Andrew Weissmann suggested three to four months. US District Judge Amy Berman Jackson set a deadline for a status report for May 14.

Gates spoke little during the plea hearing. He and Green declined to speak with reporters after the hearing as he exited the courthouse and got into a car.  He'll remain free pending sentencing, albeit subject to continued GPS monitoring and certain limits on his ability to travel beyond his home city of Richmond, Virginia.  He also had to agree to forfeit certain assets if he fled or failed to show up to court.

The folks at Lawfare have Gates's superseding criminal information and plea agreement now posted at this link. That agreement explains the ways in which the parties determine that "the applicable Guidelines Offense Level will be at least 25" which means the "estimated Sentencing Guidelines range is 57 months to 71." The plea agreement also speaks to potential departure arguments this way:

Your client agrees that, solely for the purposes of calculating the applicable range under the Sentencing Guidelines, a downward departure from the Estimated Guidelines Range set forth above is not warranted, subject to the paragraphs regarding cooperation below and the argument that the Guidelines do not adequately reflect the defendant's role in the offense.  Accordingly, you will not seek any departure or adjustment to the Estimated Guidelines Range set forth above, nor suggest that the Court consider such a departure or adjustment for any other reason other than those Specified above.  Your client also reserves the right to disagree with the Estimated Guideline Range calculated by the Office.  However, your client understands and acknowledges that the Estimated Guidelines Range agreed to by the Office is not binding on the Probation Office or the Court.  Should the Court or Probation Office determine that a different guidelines range is applicable, your client will not be permitted to withdraw his guilty plea on that basis, and the Government and your client will still be bound by this Agreement.

Special counsel Mueller subjects yet another low-level, non-violent offender to federal sentencing

The slightly cheeky title for this post is my gut reaction to the latest news emerging from the latest work by federal prosecutors working with special counsel Robert Mueller.  This BuzzFeed News piece, headlined "The Special Counsel's Office Has Charged A Lawyer Working For The Ukrainian Government With Lying To The FBI," reports the following (with links from original):

The special counsel's office has charged a lawyer who did work for the Ukrainian Ministry of Justice with lying to the FBI, according to court filings unsealed on Tuesday.

Alex van der Zwaan, an attorney, is accused of lying to investigators about his interactions with Rick Gates — the former Donald Trump campaign official and longtime associate of Paul Manafort who is also facing criminal charges in the special counsel's investigation — and an unidentified individual referred to in charging papers as "Person A."

Van der Zwaan is due in court on Tuesday afternoon for a plea hearing.  He is expected to plead guilty.

According to the criminal information filed by special counsel Robert Mueller's office, which is dated Feb. 16, investigators asked van der Zwaan in November about his work in 2012 for the Ukraine Ministry of Justice preparing a report on the trial on Yulia Tymoshenko, the former Ukrainian prime minister.

Van der Zwaan is accused of falsely telling investigators that his last communication with Gates was an "innocuous text message" in mid-August 2016, when he had spoken with Gates in September 2016 about the Tymoshenko report.

Prosecutors alleged that van der Zwaan falsely said that his last communication with Person A was a conversation in 2014 when they "discussed Person A's family," when he spoke with Person A in September 2016 about the Tymoshenko report.

Van der Zwaan is also accused of deleting and failing to produce emails to the special counsel's office and a law firm referred to as "Law Firm A," including email between him and Person A in September 2016.

Van der Zwaan's case is the sixth criminal matter made public by the special counsel's office. Prosecutors on Friday announced that a federal grand jury had indicted the Russian-based Internet Research Agency (IRA), two other Russian entities, and 13 Russian individuals, accusing them of interfering with the 2016 election. The special counsel's office also unsealed a criminal case against a California man who pleaded guilty to identity fraud.

The criminal information unsealed on Tuesday does not specify what law firm van der Zwaan worked for when he prepared the Tymoshenko report, but earlier news articles identified an Alex van der Zwaan as being part of a team from the law firm Skadden, Arps, Slate, Meagher & Flom that prepared a report about Tymoshenko for the Ministry of Justice in 2012.  Skadden released a statement Tuesday morning saying that the "firm terminated its employment of Alex van der Zwaan in 2017 and has been cooperating with authorities in connection with this matter."

Van der Zwaan's firm biography is no longer on Skadden's website, but the Internet Archive's Wayback Machine archived a version of it. The page stated that he served "as rule-of-law consultant to the Ministry of Justice of Ukraine" and wrote "a report on due process issues associated with a high-profile prosecution."

Van der Zwaan did not have a lawyer listed on the public court docket. Van der Zwaan is the son-in-law of German Khan, a Russian bank owner who is suing BuzzFeed News over the publication of an unverified dossier of information concerning President Donald Trump.

VW executive gets seven years in federal prison for emissions fraud

This Reuters article reports on today's notable white-collar sentencing in the Motor City.  Here are the sentencing basics:

A U.S.-based Volkswagen AG executive who oversaw emissions issues was sentenced to seven years in prison and fined $400,000 by a judge on Wednesday for his role in a diesel emissions scandal that has cost the German automaker as much as $30 billion.

The prison sentence and fine for the executive, Oliver Schmidt, were the maximum possible under a plea deal in August the German national made with prosecutors after admitting to charges of conspiring to mislead U.S regulators and violate clean-air laws.

“It is my opinion that you are a key conspirator in this scheme to defraud the United States,” U.S. District Judge Sean Cox of Detroit told Schmidt in court. “You saw this as your opportunity to shine ... and climb the corporate ladder at VW.”

Schmidt read a written statement in court acknowledging his guilt and broke down when discussing his family’s sacrifices on his behalf since his arrest in January. “I made bad decisions and for that I am sorry,” he said.

U.S. Department of Justice trial attorney Benjamin Singer argued in court that Schmidt was “part of the decision making process” at VW to hide a scheme to fake vehicle emissions results and had opportunities tell regulators the truth. “Every time he chose to lie,” Singer said.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles in order to elude emissions tests....

Schmidt was charged with 11 felony counts and federal prosecutors said he could have faced a maximum of up to 169 years in prison.  As part of his guilty plea, prosecutors agreed to drop most of the counts and Schmidt consented to be deported at the end of his prison sentence.

As one former member of Congress enjoys release from prison after five years, another one gets sentenced to five years in Florida federal court

I blog here over the weekend about the resentencing hearing on Friday that allowed former US Representative William Jefferson to officially put federal prison behind him after serving five years and five months. Today, as reported in this local article, another former member of Congress got sentenced to prison in another federal courthouse.  Here are the details:

Former U.S. Rep. Corrine Brown was sentenced Monday to five years in federal prison for fraud and tax crimes that included raising about $800,000 for a sham charity. Brown’s longtime chief of staff, Ronnie Simmons, was sentenced to 48 months in prison, and the charity’s founder, One Door for Education President Carla Wiley, was sentenced to 21 months.

U.S. District Judge Timothy Corrigan said he believed the Democrat used her position in Congress to achieve an “admirable record of service.”  However, he also said she abused the trust of that office in order carry out a criminal conspiracy.

“This is a sad day for everyone,” Corrigan told Brown shortly after sentencing her.  “I was impressed with all the outpouring of support for you, and I think it’s a tribute to all the work you’ve done over the years. That’s what makes this all the more tragic.”...

Corrigan ordered Brown to report to prison no earlier than Jan. 8 to an as-yet undetermined prison, but allowed her to remain free until then.  Brown’s attorney, James Smith of Orlando, argued for probation and said Brown would appeal the sentence.

An appeal may not keep the 12-term congresswoman from going behind bars, however. Federal rules say Brown should begin serving her time while the appeal is pending unless the judge finds the defense is raising substantial issues that are likely to result in a new trial or a sentence shorter than the time he’ll need to decide the appeal.

Prosecutors asked Corrigan for at least five years in prison during a sentencing hearing held last month.  A pre-sentencing report from courthouse staff, which the judge isn’t required to follow, recommended a prison term between seven years, three months and nine years.

That term was based on sentencing guidelines for Brown’s convictions on 18 counts at her May trial.  Jurors found her guilty of charges involving wire and mail fraud, conspiracy, concealing income and filing false tax returns.  Thirteen of the counts Brown was convicted of involved her fundraising efforts for One Door for Education, an organization she falsely described as being a tax-exempt nonprofit supporting projects to help children....

Between 2012 and the start of 2016, One Door received about $800,000 in donations, often from wealthy businesspeople who later said Brown personally approached them and told them One Door would use the money for kids’ causes.  In reality, jurors were told during Brown’s trial, only a tiny sliver of the money was spent on real charity, while more than $330,000 went into party-like events like outings to a Beyonce concert, a Jaguars-Redskins game in Washington and the invitational golf tournament One Door sponsored in Brown’s honor at TPC Sawgrass....

Prosecutors’ argument that the fraud had been significant was underscored by their requests for Corrigan to order the three to collectively forfeit more than $650,000 the government labeled as proceeds from the crime.  In addition, under a separate part of the law involving repaying crime victims for their losses, prosecutors asked for Brown and Simmons to be ordered to make restitution payments totaling $452,000 to donors who gave to One Door.  They also asked for an order making Brown pay $62,000 in restitution to the IRS for lying on her taxes, and an order for Simmons to pay another $91,000 in restitution for a charge involving him alone creating a ghost employee on Brown’s staff payroll....

If Corrigan’s sentence stands, Brown’s imprisonment will end a tumultuous but significant career in which Brown and two others, all elected in 1992, became the first African-Americans that Florida sent to Congress since the 19th century.

Thanks to SCOTUS McDonnell ruling, record-long sentence for Congress member reduced to (significant) time served

A little more than eight years ago, as detailed in this post, federal prosecutors were seeking a (within-guideline) sentence of 27 years or more years for former US Representative William Jefferson following his bribery convictions.  Jefferson’s attorneys urged a sentence of less than 10 years, noting that no member of Congress had ever previously been sentenced to more than 100 months in prison.  As reported in this post, US District Judge T.S. Ellis ultimately imposed a record-setting prison sentence of 13 years.

Fast forward to this press story from yesterday, and we learn the details of the notable final chapter in this particular federal white-collar sentencing saga:

Ex-New Orleans Congressman Bill Jefferson walked out of a suburban Washington courthouse Friday owing no further obligations to the United States government, aside from monthly check-ins with a federal parole officer.  The five years and five months Jefferson spent in prison, as well as the $189,215.42 the feds seized from his bank accounts, served as enough punishment for Jefferson’s corruption convictions, U.S. District Judge T.S. Ellis III ruled.

The judge signed off on an agreement between Jefferson’s attorneys and federal prosecutors letting the disgraced former lawmaker walk away from the public corruption case against him after serving less than half of his original prison sentence.  “So, Mr. Jefferson, this ends a long saga,” Ellis said as Jefferson, his balding head shaved smooth and shoulders stooped slightly, stood before him. “You have paid your debt."

The former nine-term Democratic congressman was toppled from power a decade ago amid high-profile FBI raids on his home and congressional offices. Agents had secretly recorded meetings between Jefferson and a wealthy Virginia businesswoman acting as an FBI informant, eventually capturing Jefferson on video accepting a suitcase with $100,000 in cash in a suburban hotel room.  Agents later found $90,000 of the money in Jefferson’s freezer, wrapped in tinfoil and stuffed inside frozen food boxes.  The raid garnered national headlines and left Jefferson’s reputation in tatters....

Ellis, who presided over Jefferson’s trial and originally sentenced him to 13 years in federal prison, threw out seven of the ten counts against Jefferson in October in light of a 2016 U.S. Supreme Court decision requiring federal prosecutors to do more to prove public officials had abused their positions in corruption cases. The decision, which vacated the corruption conviction of former Virginia Gov. Robert McDonnell, triggered a wave of appeals from other former public officials. The judge also ordered Jefferson to be released early from federal prison.

Jefferson, however, had faced the prospect of returning to prison. Ellis left three counts of the conviction standing, each of which carried a potential prison term well beyond the five years Jefferson spent locked up. At Friday’s hearing, Jefferson said little, instead letting his attorneys — both of whom represented him during his eight-week trial — do the talking....

Jefferson offered his gratitude to friends, relatives and supporters who’d stood by him over the years while speaking to reporters outside the courtroom.  The former politician said he plans to stay retired from public life but hopes to become involved in the community and his local church....  “I don’t have time to be angry with anything,” Jefferson said when asked if he harbored bitterness about his time in prison.  Jefferson maintained his innocence in the case even after his conviction but declined Friday morning to say whether he did anything wrong.

As part of the deal with prosecutors, Jefferson accepted his conviction on two federal conspiracy counts and agreed not to file any further appeals in the case.  Ellis, in signing off on the agreement, noted that federal sentencing guidelines recommend 8 to 10 years in prison on those two charges.  The judge called it a fair resolution for everyone involved.  Yet Ellis still castigated the ex-lawmaker’s actions as “venal” in handing down the lesser sentence.

Prior related posts from 2009:

• Prosecutors seeking long prison term for ex-Rep. William Jefferson
• Former congressman William Jefferson scheduled to learn sentencing fate today

With guilty plea entered, former national security director Michael Flynn now faces (easy?) sentencing

As reported here via the New York Times, "President Trump’s former national security adviser, Michael T. Flynn, pleaded guilty on Friday to lying to the F.B.I. about conversations with the Russian ambassador last December during the presidential transition."  Here are the most basic legal particulars:

Mr. Flynn, who appeared in federal court in Washington, acknowledged that he was cooperating with the investigation by the special counsel, Robert S. Mueller III, into Russian interference in the 2016 election. His plea agreement suggests that Mr. Flynn provided information to prosecutors, which may help advance the inquiry....

Mr. Flynn pleaded guilty to making false statements to F.B.I. agents about two discussions with the Russian ambassador to the United States, Sergey I. Kislyak. Lying to the F.B.I. carries a penalty of up to five years in prison.

Sentencing fans know, of course, that the statutory maximum for any federal offense of conviction typically matters much less than the applicable federal guideline sentencing range. For that reason and others, sentencing fans will want to check out Michael Flynn's "Plea Agreement" and "Statement of Offense" available here via the National Law Journal.  (The folks at Lawfare also have lots of Flynn docs at this link.)  Pages 2-3 of the plea agreement highlight the sentencing story (which serves as the basis for the "easy" adjective in this post title), and here is a snippet: 

A. Estimated Offense Level Under the Guidelines

The parties agree that the following Sentencing Guidelines sections apply:

U.S.S.G. Base Offense Level: 6

Total: 6

B. Acceptance of Responsibility

The Government agrees that a 2-level reduction will be appropriate, pursuant to U.S.S.G. 3E1.1, provided that your client clearly demonstrates acceptance of responsibility, to the satisfaction of the Government, through your client's allocution, adherence to every provision of this Agreement, and conduct between entry of the plea and imposition of sentence....

In accordance with the above, the applicable Guidelines Offense Level will be at least 4....

D. Estimated Applicable Guidelines Range

Based upon the agreed total offense level and the estimated criminal history category set forth above, your client's estimated Sentencing Guidelines range is zero months to six months' imprisonment (the "Estimated Guidelines Range")....

The parties agree that, solely for the purposes of calculating the applicable range under the Sentencing Guidelines, neither a downward nor upward departure from the Estimated Guidelines Range set forth above is warranted, subject to the paragraphs regarding cooperation below. Accordingly, neither party will seek any departure or adjustment to the Estimated Guidelines Range, nor will either party suggest that the Court consider such a departure or adjustment, except as provided in the preceding sentence.

"The Boom and Bust of American Imprisonment"

The title of this post is the title of this new paper available via SSRN authored by Brandon Garrett. Here is the abstract:

We are teetering at the edge of a mass incarceration binge.  Lawmakers are reconsidering overly harsh criminal punishments.  At the same time, eight years later, people are still furious that elite criminals and CEOs avoided criminal punishment in the wake of the last financial crisis.  Many have complained that no Wall Street bankers went to jail. What do these conflicting tendencies mean? In this book review, first, I discuss the new book by business professor Eugene Soltes titled "Why They Do It," which explores psychological research on risk-taking by corporate criminals.  Second, I discuss law professor Sam Buell's "Capital Offenses," an engaging book that examines why it is so challenging to punish business crimes due to the structure of the economy, corporations, and our federal criminal justice system.  Third, I turn to law professor Darryl Brown's "Free Market Criminal Justice," which explores the role of free market ideology in the divide in American criminal justice. 

I conclude by exploring the implications of these arguments and this research for mass incarceration as well as corporate accountability at the high and low ends of our criminal justice system — we are finally turning a corner on mass incarceration in this country, and the problems and solutions that these authors identify partly explain why and whether better things or new fears lie around that corner.  We are at a crossroads.  We need voices of reason like Soltes's, Buell's, and Brown's, today more than ever.

Interesting account of "Five myths about white collar crime"

I just saw this notable recent commentary authored by Nicolas Bourtin, a former federal prosecutor, published in the Washington Post outlook section. Here is how the lengthy commentary starts along with the myth headings and the section most focused on sentencing:

Bankers and government officials continue to feature prominently on our newspapers’ front pages — and not in a good way. Since the financial crisis of 2008, a string of political and corporate scandals has played out in our political and financial centers, and recent investigations of people close to President Trump, including Paul Manafort and Rick Gates, have produced indictments for money laundering and tax fraud. Corporate malfeasance, corruption and tax fraud are shrouded in misconceptions. Here are five enduring myths about white-collar crime.

MYTH NO. 1: Prosecutors fear prosecuting powerful defendants....

MYTH NO. 2 White-collar defendants never serve real time.

In the wake of the financial crisis, publications such as Fortune and the Nation have sought to answer why its architects don’t do hard time for their crimes. “Why does the Justice Department appear to have given up on putting white-collar criminals in jail?” Fortune asked. When academics began studying the subject in the 1970s, they noted that federal judges were typically lenient toward white-collar offenders.

Those days are over. Judicial discretion in sentencing was greatly limited by the adoption of the Federal Sentencing Guidelines in 1987, whose penalties for fraud were further enhanced after the Enron scandal broke in 2001. And although the Supreme Court held in 2005 that the guidelines were advisory and no longer mandatory for judges, sentences for white-collar defendants have been getting harsher, not more lenient.

According to the U.S. Sentencing Commission’s 2013 Report on Sentencing Trends, nearly 70 percent of all offenders sentenced under the guidelines for fraud received some prison time for their crimes in 2012. In 1985, that rate was about 40 percent. For crimes that caused a loss of at least $2.5 million, the same report revealed that offenders were sentenced under the guidelines to an average of nearly five to 17 years in prison in 2012. In 1985, by comparison, the average sentence for white-collar crimes was just 29 months.

MYTH NO. 3 Trump’s administration won’t enforce anti-corruption laws....

MYTH NO. 4 No one went to prison as a result of the financial crisis....

MYTH NO. 5 Financial crime is the same as robbery or theft....

Appreciating ugly sentencing realities facing Paul Manafort and Rick Gates after federal indictment

The big news in the political world this morning is the indictment of Paul Manafort, President Donald Trump’s former campaign chairman, which flows from special counsel Robert Mueller's investigation into Russian meddling in the 2016 election.  Along for the ride is another Trump campaign official, Rick Gates, who is also facing 12 federal criminal counts thanks to the work of a federal grand jury.  As is my tendency, I will be content to respond to this news with a few sentencing-related observations while leaving it to others to engage in political spin and other forms of legal speculation.

The full 31-page indictment of Manafort and Gates is available via this link, and the 12 federal criminal counts facing them are conspiracy against the United States (count 1), conspiracy to launder money (count 2), failure to file required reports (counts 3 to 9), being an unregistered agent of a foreign principal (count 10), false/misleading FARA statements (count 11) and false statements (count 12). Though a number of these counts, coupled with the narrative of the defendants' actions in the indictment, can sound quite ominous, it is ultimately the money laundering count that should send a Halloween chill down the spine of Manafort and Gates (and, presumably, their defense lawyers).

The money laundering count appears to carry the highest statutory sentencing range (20 years) of all the charges. In addition, because of the large amounts of money involved in these offenses — the indictment alleges Manafort laundered $18 million — the calculated guideline range for this offense is least a decade (and likely more).  In other words, if Manafort were convicted of just the money laundering allegations against him, the "starting point and the initial benchmark" for his sentencing is 10+ years in federal prison. (It is not clear from a quick review of the indictment whether the amounts involved for Gates would drive his guideline range up quite so high.)

Manafort, who is 68 years old, surely would like to avoid any prison time and he certainly does not want to risk spending the rest of his life in the federal pen.  He can, of course, choose to fight all the charges at trial, but I suspect Mueller and his team only moved forward with these indictment allegations after becoming confident they could prove them all beyond a reasonable doubt.  Moreover, thanks to the reality that federal judges can and often do consider "acquitted conduct" at sentencing, even an acquittal on most but not all of the counts may not significantly change these ugly sentencing realities for Manafort and Gates.

Of course, what can change these sentencing dynamics is a plea deal that locks in some favorable sentencing terms and/or a decision by the defendants to, in the language of 5K1.1 of the federal sentencing guidelines, "provide substantial assistance in the investigation or prosecution of another person who has committed an offense."  Those hoping that these indictments turn up the heat on current members of Team Trump can and should relish the reality that Manafort and Gates now have strong sentencing reasons to consider providing substantial assistance in the investigation of others.  What others they might have information about, and what others Mueller and his team are seeking information on, will sure keep folks inside the Beltway chattering in the coming weeks and months.

Big fine and community service, but no prison time, for law firm CFO convicted of fraud in NY state court

This Reuters article, headlined "Ex-Dewey & LeBoeuf executive avoids prison time after fraud conviction," report on the alternative sentence a notable lawyer received after a conviction for his law firm's notable problems. Here are the details:

The former chief financial officer of defunct law firm Dewey & LeBoeuf, whose collapse five years ago was the largest failure of a law firm in U.S. history, has avoided prison time after being convicted of defrauding the firm’s investors. Joel Sanders, 59, was sentenced on Tuesday by Justice Robert Stolz in Manhattan Supreme Court to pay a $1 million fine and perform 750 hours of community service.

The sentence was handed down five months after the firm’s former executive director, Stephen DiCarmine, was acquitted of the same charges, and 19 months after prosecutors dropped charges against its former chairman, Steven Davis.

“I‘m deeply sorry for anything I did or didn’t do that caused anybody harm,” Sanders said in court before being sentenced. His lawyer, Andrew Frisch, declined to comment on the sentence. Frisch said in May that he planned to appeal Sanders’ conviction.

The office of Manhattan District Attorney Cyrus Vance had sought up to four years in prison for Sanders. The criminal case against Dewey & LeBoeuf’s executives was one of the most significant white-collar prosecutions brought by Vance since he took office in 2010. “This case demonstrates the Office’s commitment to prosecuting those who sacrifice professional integrity for financial gain,” Vance said in a statement on Tuesday.

The law firm, which once had close to 1,400 lawyers, went bankrupt in May 2012, unable to pay for the lavish compensation packages it had promised to recruit star partners. Prosecutors said the executives used illegal accounting adjustments between 2008 and 2012 to conceal the firm’s financial difficulties from investors in its bonds, including Bank of America Corp and HSBC Holdings Plc.

Seven lower-level employees pleaded guilty to criminal charges in connection with Vance’s investigation.

The first trial for the three executives ended in a mistrial in October 2015 when jurors, after four months of testimony and a month of deliberations, declared themselves hopelessly deadlocked on most counts.

After that trial, Davis struck a deal with prosecutors to avoid a second trial, agreeing to a five-year ban from practicing law in New York. Justice Robert Stolz dismissed the most serious charge, grand larceny, against the other two men. The second trial for Sanders and DiCarmine began in February 2017 and lasted about three months.

Interesting look at what prison consultants advise as elites head to prison

This MarketWatch article, headlined "When the rich get sent to prison, they call these wise guys first," provides an interesting little looking into an interesting little segment of the "prison-industrial complex." Here is how the article gets started:

Former congressman Anthony Weiner cried when a judge sentenced him to 21 months in prison last week for sexting with a 15-year-old girl. Prison is tough and most felons have no idea what to expect. For a few thousand dollars, however, high-profile felons like Weiner can hire a “prison consultant” to help smooth the transition to life behind bars.

For non-violent criminals like Weiner and “pharma bro” Martin Shkreli — who’s now behind bars in a Brooklyn jail — prison “is a totally different environment than they’ve ever been, it’s crazy in there,” said Michael Frantz, director of Jail Time Consulting, who served 36 months in a federal facility for tax evasion.

“They come from a world where there’s order,” Frantz said. “They have people under them and tell them what to do. When you get into federal prison, you have no control whatsoever. In the real world, there’s order and rational thinking. In the Bureau of Prisons there’s absolutely no rational thinking.”

Weiner’s attorney didn’t respond to a question on whether he’s using a prison consultant, and neither did the lawyer for Shkreli, who was recently sent to a Brooklyn detention center while he awaits sentencing on fraud charges. But Weiner and Shkreli are just the type of convicts who typically use prison consultants. They’ve already helped the likes of Bernie Madoff and Martha Stewart.

What do these prison preppers do? A combination hand-holder, shoulder-to-cry-on, and red tape slicer, prison consultants prep future inmates for life behind bars, teach them how to make the best use of their time “on the inside,” and can even help inmates shave time off their sentences. Many of the consultants have been to prison themselves and know from personal experience how to navigate the Bureau of Prisons bureaucracy.

Prices for their services range from $500 for advocating for better medical care in prison to $20,000 for comprehensive post-prison consulting to help ex-inmates rebuild their lives by starting new businesses — in fields they’re not legally barred from working in — or writing books.

Marketwatch talked to prison consultants to find out how they would advise Weiner and Shkreli. The best part? Many of these tips work for non-criminals too.

For what it is worth, I think "absolutely no rational thinking" is big part of the reason Anthony Weiner is headed to prison.

Deputy AG Rosenstein hints at possible changes to federal corporate-crime prosecution policies

As reported in this Politico piece, the "Justice Department's No. 2 official indicated Thursday that the federal government's policy on prosecuting corporate crime is under review and he suggested that changes to the department's stance on the issue are coming." Here is more:

"It’s under review and I anticipate that there may be some change to the policy on corporate prosecutions," Deputy Attorney General Rod Rosenstein said Thursday during a question-and-answer session following a speech at the conservative Heritage Foundation in Washington. "I don’t have any announcement about that today, but I do anticipate that we may in the near future make an announcement about what changes we’re going to make to corporate fraud principles."

The department's current policy, announced by Deputy Attorney General Sally Yates in September 2015, aimed to increase prosecutions of individuals responsible for criminal acts committed during work for corporations. The so-called Yates memo was seen in part as a reaction to criticism of the anemic number of prosecutions of individuals on Wall Street or at big banks for crimes related to the economic meltdown in 2008.

Rosenstein did not indicate what portions of the Yates memo are likely to be overhauled or halted. He also said that he favors prosecutions of individuals in appropriate cases. "Corporations, of course, don’t go to prison. They do pay a fine," Rosenstein said. "The issue is can you effectively deter corporate crime by prosecuting corporations or do you in some circumstances need to prosecute individuals. I think you do."

DAG Rosenstein also talked a bit about possible changes to DOJ policies on marijuana enforcement, and I cover those comments here over at Marijuana Law, Policy and Reform.

"White-Collar Showdown"

The title of this post is the title of this essay recently posted to SSRN and authored by Mihailis Evangelos Diamantis. Here is the abstract:

The Sentencing Commission and the judiciary do not see eye to eye when it comes to punishing white-collar fraudsters.  Recent survey data collected by Judge Bennett and his co-authors confirms that judges prefer to sentence fraudsters at or below the minimum of the Sentencing Guidelines range.  This article asks whether that data should give the Sentencing Commission pause.  The survey results might just substantiate the Sentencing Commission's worry that judges are prone to cognitive bias in favor of white-collar defendants, with whom they often overlap demographically.

After suggesting that judges have no particular insight into the factors relevant to fraud sentencing, the article assesses the matter from criminal theory first principles: deterrence, rehabilitation, and retribution. It concludes — contrary to the apparent views of most judges and many white-collar criminal law scholars — that we should not be so quick to dismiss the guidelines as too harsh.

You be the federal judge: what sentence for "Pharma Bro" after his fraud convictions?

As regular readers know, I enjoy following up news of a high-profile conviction by asking what sentence readers think fitting for the high-profile convicted offender.  As detailed in this MSNBC report, headlined "'Pharma bro' Martin Shkreli found guilty of 3 of 8 charges, including securities fraud," the high-profile offender this time around is a notorious pharmaceutical executive. Here are the basics about his crime:

A federal jury Friday found notorious "Pharma bro" Martin Shkreli guilty of three counts of securities fraud — but acquitted him of five other criminal counts related to hedge funds investors and a drug company he founded. The split verdict in Shkreli's trial came at about 2:37 p.m. on the fifth day of jury deliberations, after a more-than-month-long trial in Brooklyn, New York, federal court.

At that trial, prosecutors claimed Shkreli had defrauded multiple investors in his two hedge funds out of millions of dollars, only to repay them with stock and cash that he looted from a the biotech company he created, Retrophin. While the seven-woman, five-man jury clearly accepted some of the prosecution's evidence, it rejected other parts of their argument.

The mixed decision perplexed many in the courtroom, including the 34-year-old Shkreli, who first drew widespread public scorn in 2015 for raising the price of a lifesaving drug by more than 5,000 percent. He looked over quizzically at one of this lawyers, Marc Agnifilo, each of the three times that Judge Kiyo Matsumoto interrupted a set of "not guilty" announcements she was reading off of the jury's verdict sheet with a "guilty" one.

A juror who was quoted anonymously by the New York Times, said "In some of the counts at least we couldn't find that he intentionally stole from them and the reasoning was to hurt them."...

Shkreli, who remains free on $5 million bail, faces a maximum sentence of 20 years in prison. But he is sure to receive a far-less-severe punishment than that, given his lack of a criminal record, and other factors.

"I think we are delighted in many ways," said Shkreli said outside of the courthouse. "This was a witch hunt of epic proportions and maybe they found one or two broomsticks but at the end of the day we've been acquitted of the most important charges in this case." He almost immediately afterward used his new Twitter account, @samthemanTP, to comment on the outcome of the case, and also started a livestream on YouTube from his apartment.

Shkreli's lead lawyer, Benjamin Brafman, told a group of journalists, "I hope tomorrow's reports inform the public that Martin Shkreli went to trial and despite being Martin Shkreli he won more than he lost."

But acting United States Attorney Bridget Rohde, whose office prosecuted Shkreli, said, "We're gratified as we stand here today at the jury's verdict."

"Justice has been served," said Rohde, whose prosecution team next plans to try Shkreli's co-defendant and former business lawyer Evan Greebel this fall.

Brafman said the amount of money Shkreli could be made to surrender would have been much higher if he had been found guilty of ripping off Retrophin, to repay swindled hedge-fund investors. But Shkreli was acquitted of that charge, conspiracy to commit wire fraud, which Brafman referred to as "the money count."

Brafman said that because the jury found that any loss suffered by Retrophin was either low, or non-existent, as the defense claims, the sentence recommended for Shkreli will be light. "I think we would love to have a complete sweep but five out of eight counts, not guilty, is in our view a very good verdict especially since count seven, the main count that impacts on the loss in this case, that was the most important count in the case from our perspective," Brafman said. "And for Martin to be found not guilty of that count is a very, very good result as far as we are concerned," Brafman said....

The charges against Shkreli were unrelated to his decision, while CEO of Turing Pharmaceuticals, to raise the price of the drug Daraprim from $13.50 per pill to $750 per pill in 2015. The price increase came as he was being investigated for the case that led to his trial.

Prosecutors said a mountain of testimony and evidence at that trial showed that Shkreli duped multiple investors into putting millions of dollars into two hedge funds he ran, MSMB Capital and MSMB Healthcare, by falsely claiming to have an excellent record of running such funds, and by falsely stating his investment strategy had a low level of risk.

After getting their money, prosecutor said, Shkreli quickly lost much of it, and also used some of it to capitalize his infant company Retrophin even as he continued sending out financial statements to investors claiming positive returns. And when investors asked for their money to be redeemed to them in cash, Shkreli brushed them off for months or more, inventing excuses and suggesting alternative ways to pay them back, according to the prosecution's case.

Two of the securities fraud counts for which Shkreli was convicted related to those hedge funds. Prosecutors said that he then improperly used Retrophin stock and cash from the young firm to pay off the the funds' investors. While Shkreli was acquitted of on Retrophin-related count, he was convicted of conspiracy to commit securities fraud in connection with Retrophin.

This Reuters article, headlined "Shkreli sentence turns on antics, investor impact of crime," highlights that this case may be the relatively rare white-collar case in which the calculated guideline range is rather low but personal factors may prompt a judge to want to sentence above the range:

Benjamin Brafman, Shkreli's lawyer, said because the hedge fund investors ultimately profited, his client's sentencing range should be zero to six months, which allows for probation in lieu of prison.

Brafman in an email on Saturday acknowledged Shkreli's social media habits are "not helpful" and hoped the court would focus on the facts of the case and the law. "My hope is that the court will ignore the childish and compulsive tweeting of Mr. Shkreli that‎ is his right to do," Brafman said.

Shkreli could benefit from steps he took to repay investors before he caught the attention of authorities. "As long as the investors were paid back before he knew there was a criminal investigation that is subtracted from any loss figure," said Sarah Walters, a lawyer at the law firm McDermott Will & Emery.

Prosecutors are expected to argue the intended losses of the fraud were much higher, noting the millions of dollars that investors lost before they were repaid, according to the law enforcement source, who requested anonymity to discuss the case. That could allow for a lengthier sentence, as under federal sentencing guidelines, judges are to consider the actual or intended loss, whichever is higher.

Legal experts also said prosecutors could argue for a lengthier sentence by asking U.S. District Judge Kiyo Matsumoto to factor in the conduct involving Retrophin despite the acquittals. While juries must find wrongdoing under the high standard of proof beyond a reasonable doubt, judges at sentencing may consider facts proven by the lower standard of preponderance of the evidence.

The guidelines are advisory only, and Matsumoto can factor in other issues, including Shkreli's trash-talking habits. "In this case, I imagine they will focus more on that he is a liar, he disparages people, he is a disruptive force and he has a complete lack of remorse," said John Zach, a lawyer at Boies, Schiller & Flexner.

Amish farmer sentenced to six year in federal prison for regulatory offenses and obstruction

This local article reports on a notable federal sentencing that seemed driven, at least in part, by the defendant's disinclination to respect the federal government. The article is headlined "Amish farmer sold herbal health products. He’s going to prison for 6 years." Here are some of the details:

An Amish man was sentenced Friday to six years in prison for obstructing a federal agency and for making and selling herbal health products that were not adequately labeled as required by federal law. Samuel A. Girod of Bath County, a member of the Old Order Amish faith, was convicted in March on 13 charges, including threatening a person in an attempt to stop him from providing information to a grand jury.

U.S. District Judge Danny Reeves repeatedly asked Girod in court if he wished to make a statement but Girod refused. Girod, who represented himself, does not acknowledge that the court has jurisdiction. “I do not waive my immunity to this court,” Girod told the judge. “I do not consent.”

Girod has become a cause for some who see him as a victim of the federal government. More than 27,000 people have signed an online petition seeking to have him released from jail. About 75 supporters of Girod, including many Amish, gathered near the federal courthouse on Barr Street in downtown Lexington before and after the sentencing.

“We still have a country where people still come together to help each other,” said Emanuel Schlabach, 27, an Amish man from Logan County. As assistant U.S. attorneys left the courthouse after the sentencing, Girod supporters jeered them. “Shame on you!” shouted one supporter.

One non-Amish supporter, Richard Mack of Arizona, said after the sentencing that, “This is a national disgrace and outrage. ... He is being punished for being stubborn.” Mack, a former Arizona sheriff and political activist, said he and others will ask President Donald Trump to issue a pardon to Girod. Mack said he has used Girod’s chickweed salve with no ill effects.

Girod operated a business in Bath County that made products to be used for skin disorders, sinus infections and cancer. One product called TO-MOR-GONE contained an extract of bloodroot that had a caustic, corrosive effect on human skin, according to an indictment.

A federal court in Missouri had barred Girod from distributing the products until he met certain conditions, including letting the U.S. Food and Drug Administration inspect his business. But when two agents tried to inspect the plant in November 2013, Girod and others blocked them and made them leave, the indictment charged. Federal prosecutors said in a sentencing memorandum that Girod knowingly and intentionally sold misbranded products to customers and did not tell any of them about the injunction.

At trial, customers testified that they would not have purchased his products if they had known about the injunction. Girod argued that his products weren’t subject to Federal Drug Administration oversight because they were herbal remedies, not drugs. He also argued that requiring FDA approval of his products infringed on his religious freedom. Old Order Amish seek to insulate themselves from the modern world, including modern pharmaceuticals, he said.

Federal jurors rejected Girod’s defense, convicting him of conspiring to impede federal officers; obstructing a proceeding before a federal agency; failing to register with the FDA as required; tampering with a witness; failing to appear before a hearing; and distributing misbranded drugs....

In documents filed June 19, Girod argued that the charges in the indictment “do not apply to me.” “I am not a creation of state/government, as such I am not within its jurisdiction,” Girod wrote. He added later: “The proceedings of the ‘United States District Court’ cannot be applied within the jurisdiction of the ‘State of Kentucky.’”

Girod’s supporters outside the courthouse said his case is an example of overreach by the federal government. “I don’t need the FDA to protect me from an Amish farmer,” read a sign held by T.J. Roberts, a Transylvania University student from Boone County. “I feel what happened here is an example of judges making the law,” Roberts said. “What the FDA did here is an example of executive overreach in which they are choosing what Americans can put in or on their own bodies. I struggle to find where the victim is in this and where the crime was committed.”

But Judge Reeves said Girod brought the trouble on himself “because he steadfastly refused to follow the law.” To Girod, Reeves said, “You refused to follow anyone but yourself.”

I always have a negative reaction to any use of prison time in response to what seem like non-violent regulatory offenses by a person who would appear to present no genuine threat to public safety.  And this case especially caught my eye not only because a lot of federal prison time was imposed, but also because this critical report about the sentencing from a political blog indicates that the applicable federal guideline range here was 63-78 months.  In other words, the sentencing judge here though the defendant needed and deserved a sentence significantly above the bottom of the applicable guideline range in this case.  Also of note, the judge who decided a six year prison term was necessary in this case, U.S. District Judge Danny Reeves, happens to be the newest member of the US Sentencing Commission.

Dance Mom star Abby Lee Miller gets "a year and a day" for bankruptcy fraud

Today's celebrity federal sentencing news involves former "Dance Moms" reality TV star Abby Lee Miller, whose case is covered in hard-hitting fashion here via E! Online: 

Two years after her indictment, Abby Lee Miller has officially learned her legal fate.  The reality star, who rose to fame on the Lifetime series Dance Moms, was sentenced to one year and one day in prison followed by two years of supervised release on Tuesday, according to several reporters in the court room.  She was also reportedly fined $40,000 and ordered to pay a $120,000 judgment. She has 45 days to report to prison.

"It's a very serious situation when someone who files for bankruptcy isn't truthful with the court," Judge Joy Flowers Conti told the reality star in court.

The 50-year-old dance instructor was initially indicted in 2015 on 20 charges of bankruptcy fraud, concealment of bankruptcy assets and false bankruptcy declarations after the FBI, IRS and postal inspectors conducted an investigation.  She allegedly hid more than $755,000 in other bank accounts, income reportedly stemming from appearances on the show in 2012 and 2013....

In June 2016, Lee Miller pleaded guilty to concealing bankruptcy assets, as confirmed to E! News. Miller also pleaded guilty to one count of not reporting an international monetary transaction. In March, she also announced she was walking away from the longtime TV series.

While appearing in court Tuesday, she told the judge she was ashamed to be meeting this way and that she wished the judge could have taken her class. Lee Miller ultimately got teary eyed as she expressed regret for her actions. "I am very sorry for what I've done," she said, according to reporters. "My name has been dragged through the mud."

Prior related post:

• You be the judge: what federal sentence for "Dance Mom" star after her guilty plea to financial crimes?

An empirical dive into federal "Health Care Fraud Sentencing"

The quoted title of this post is the title of this notable new Note authored by Kyle Crawford. Here is the abstract:

Health care fraud convictions are on the rise, but little is known about how health fraud offenders are sentenced.  This Note offers the first comprehensive empirical account of sentencing decisions in health fraud cases based on a new dataset constructed from United States Sentencing Commission data.  This analysis shows that there is a large disparity in how health fraud offenders are sentenced compared to other white collar offenders and general crimes offenders.  Between 2006 and 2014, health fraud offenders received fewer Guidelines-range sentences and more below-Guidelines sentences than other offenders.  This is because: (1) health fraud offenders are older, whiter, more educated, and less likely to have a criminal record than other offenders, which are demographic characteristics associated with lighter sentences; (2) judges are dissatisfied with the loss table, which is used to sentence most health fraud offenders; and (3) judges view the collateral consequences of sentencing health fraud offenders — many of whom are health professionals — as a mitigating factor.

This analysis also shows a stark difference in the number of health fraud cases brought in districts across the country.  The ten districts with the highest proportion of health fraud convictions account for nearly a quarter of all health fraud convictions. In addition, health fraud offenders go to trial more often than other offenders.  This results from the threat of severe collateral consequences — exclusion from Medicare and Medicaid and possible loss of a medical license.  These offenders have a larger incentive to go to trial than other offenders, especially because pleading guilty does not allow health fraud offenders to avoid these collateral consequences.

Federal prosecutors seeking 3-year prison terms for "Bridgegate" defendants

I have covered in a few prior posts the convictions and coming sentencing of Gov Chris Christie staffers who are now felons thanks to federal prosecutions in the wake of the so-called Briedgegate scandal.  This local article, headlined "Bridgegate: Feds seek 'meaningful' jail term for former Christie allies," reports on final filings as sentencing approaches:

Calling their crimes a "stunningly brazen and vindictive abuse of power," federal prosecutors urged a federal judge to sentence both Bill Baroni and Bridget Kelly, convicted last year in the Bridgegate scandal, to a "meaningful term of imprisonment."

But in a pre-sentence report filed Monday, the U.S. Attorney's office did not ask for the maximum term. Instead, they recommended a sentence for the two Bridgegate defendants to be "at the bottom or modestly below" the federal sentencing guidelines of between 37 to 46 months in prison.

Such a term, though, would still stand in stark sentence to the year of home confinement handed down earlier this month to David Samson, the former chairman of the Port Authority of New York and New Jersey, after he pleaded guilty to bribery in connection with the shakedown of United Airlines so he could get a more convenient flight to his country estate in South Carolina. Facing two years in jail, the former Port Authority chairman, David Samson, instead was sentenced to probation after attorneys, calling his actions a one-time lapse in judgment, asked the court to grant leniency for the ailing 77-year-old attorney, who was Christie's mentor.

Indirectly referencing the Samson ruling, the prosecutors said a sentence that could be perceived as a mere "slap on the wrist" would "send precisely the wrong message to the public, as well as to thousands and thousands of New Jersey public officials, elected and appointed."

Defense attorneys challenged the sentencing guidelines, which call for far longer prison terms than the typical corruption case, in large part because the Bridgegate convictions included charges of civil rights violations. "This sentencing is not about how much hyperbole the government can use in its sentencing brief," said Baroni's attorneys in a brief, also filed Monday. "Indeed, Bill accepts full responsibility for his actions and failure to act at a critically significant moment in his life. He will bear that cross forever, no matter (how) the court impose(s) sentence." But they asked the judge as well to "exercise the most leniency possible when tailoring a sentence based upon Bill's dedication to the altruistic service of others."

Both Baroni and Kelly are seeking a probationary sentences. "A non-custodial sentence including probation, home confinement and community service as punishment, is an appropriate sentence for Bridget Kelly," said her attorney, Michael Critchley.

Prosecutors said the defense challenges should be denied. "Defendants like Baroni and Kelly, who have had the opportunity to do good work and build relationships with influential people, are not entitled to a get-out-of-jail-free card, particularly for serious crimes," they wrote.

The two former members of Gov. Chris Christie's inner circle are scheduled to be sentenced on Wednesday....

"Baroni and Kelly took all of these actions for the pettiest of reasons: to punish a local mayor and send him a nasty political message because he did not endorse Gov. Christie for re-election," wrote assistant U.S. attorneys Vikas Khanna, Lee Cortes Jr. and David Feder in a 55-page brief. "Nothing about Baroni's and Kelly's actions or motivations in committing these crimes mitigates their conduct." At the same time, they cited the "complete lack of remorse for their wrongful conduct."

The self-admitted architect of the scheme, David Wildstein, a former political blogger and friend of the governor who landed a patronage job at the Port Authority, testified against Baroni and Kelly. He pleaded guilty and is awaiting sentencing.

Prior related posts:

• "Bridgegate" now a federal sentencing story after two former New Jersey officials convicted on all federal counts after lengthy jury deliberations
• Is the likely federal sentencing guideline range for "Bridgegate" defendants convicted last week at least 3 to 4 years in federal prison?
• You be the federal sentencing judge: how long a prison term for convicted "Bridgegate" defendants?

You be the federal sentencing judge: how long a prison term for convicted "Bridgegate" defendants?

As I have often said in this space, I find I find high-profile, white-collar sentencing cases to be among the most interesting and dynamic because they often require a judge (and others) to balance and calibrate competing punishment theories and goals.  Because most white-collar offenders are not violent and often had a successful/productive life before getting into trouble, the need for severe punishment to incapacitate or specifically deter an offender from committing future crimes is often diminished.  But because potential white-collar offenders are likely influenced by the deterrent impact emerging from the punishment of others like them, and also because white-collar offenders typically have had a relatively advantaged background, one can reasonably believe that crime control and just punishment concerns justify throwing the book at any and all serious white-collar offenders.  

Against that backdrop, I am eager to hear various perspective on the upcoming federal sentencing of the two defendants discussed in this local New Jersey article headlined "What's at stake this week when Bridgegate defendants are sentenced." Here are the basics:

On paper, they could face up to 20 years in prison. Bill Baroni and Bridget Anne Kelly, once members of Gov. Chris Christie's inner circle who were convicted in November of conspiracy and fraud in connection with the Bridgegate scandal, are due to return to court Wednesday morning for sentencing.

While neither is expected to serve anywhere near the 20-year statutory maximum term under federal sentencing guidelines, the unusual nature of the charges in the case, including civil rights violations for interfering with the ability to travel, could have both looking at nearly four years in prison, say legal experts.

Baroni, 44, the Port Authority's former deputy executive director, and Kelly, also 44, a one-time deputy chief of staff to Gov. Chris Christie, were charged with helping orchestrate the shutdown of several local toll lanes at the George Washington Bridge in 2013 in a scheme of political retribution targeting the mayor of Fort Lee over his refusal to endorse the governor for re-election. After a seven-week trial, the two were found guilty.

Prosecutors, however, not only charged the two with conspiracy and fraud, but with violating the civil rights of those stuck in the massive traffic jams they created--which left Fort Lee frozen in gridlock for days. Those civil rights violations are now driving what could be an unusually harsh sentence, according to legal experts.

"Civil rights violations have always been treated severely by federal courts since historically they were used by the federal government to prosecute crimes that states were either unwilling or unable to prosecute," noted Robert Mintz, former deputy chief of the Organized Crime Strike Force of the U.S. Attorney's Office in New Jersey and a criminal defense attorney at McCarter & English.

The U.S. Attorney's office would not disclose the proposed sentencing range in Bridgegate case and attorneys for both Baroni and Kelly also declined comment, but the federal sentencing guidelines suggest both face upwards of 46 months, in large part due to the civil rights violations. U.S. District Judge Susan Wigenton, who presided over the Bridgegate trial, has sole discretion to set punishment.

While crimes carry statutory maximum penalties, federal judges for the most part follow set guidelines that outline a uniform sentencing policy for those convicted in the federal courts, so that individuals convicted of similar crimes generally serve the same sentence no matter where they were tried. "The guidelines are advisory only. But a lot of judges follow them very rigidly," observed Alan Ellis, a former president of the National Association of Criminal Defense Lawyers and a San Francisco attorney who specializes in sentencing and post-conviction matters.

Yet sometimes judges agree to significant departures from those guidelines. At sentencing last Monday, David Samson, the former Port Authority of New York and New Jersey chairman, faced up to 24 months in prison for bribery in connection with a shakedown of United Airlines. Instead, he walked out of court with just a year of house arrest.... Samson's guilty plea earned him a downward adjustment from the sentencing guidelines for his "acceptance of responsibility." A negotiated plea deal with the U.S. Attorney's office further limited the maximum term he faced.

"These two people went to trial," said Ellis of Baroni and Kelly. Those who go to trial are said to "pay rent on the courtroom," because they receive no downward adjustment at sentencing if they are found guilty....

For Baroni and Kelly, who wrote the now-infamous "time for traffic problems" message that served as a smoking gun to prosecutors, the civil rights violations will represent the most serious violations to be addressed at sentencing. "In this case, the facts are so unique that it doesn't fit the typical pattern of these type of violations so it is hard to predict how the court will factor in that violation," said Mintz. "In the end, the sentence that these defendants receive will likely turn more on how the judge views the criminal conspiracy--whether the conduct was a calculated scheme that truly endangered the public or was merely a misguided act of political retribution that went horribly awry."

Whatever the sentence, defense attorneys have already said the plan to appeal the case.

Prior related post:

• "Bridgegate" now a federal sentencing story after two former New Jersey officials convicted on all federal counts after lengthy jury deliberations
• Is the likely federal sentencing guideline range for "Bridgegate" defendants convicted last week at least 3 to 4 years in federal prison?

More interesting new Quick Facts on fraud sentencing from the US Sentencing Commission

I noted in this post earlier this week that the US Sentencing Commission had released the first of a new series of Quick Facts covering federal fraud sentencing with a focus on health care fraud cases. (As the USSC explains, "Quick Facts" are publications that "give readers basic facts about a single area of federal crime in an easy-to-read, two-page format.")  I have now just noticed that the USSC released a number of other fraud-focused Quick Facts this week, and here are links to them:

• Government Benefits Fraud

• Credit Card Fraud

• Mortgage Fraud

• Securities & Investment Fraud

Hard-core federal sentencing fans might make a parlor game of trying to guess which type of fraud has the most and which has the least sentences imposed within the calculated guideline ranges.

Interesting new Quick Facts on federal health care fraud sentencing from the US Sentencing Commission

The US Sentencing Commission has released this notable new Quick Facts covering federal sentencing in health care fraud cases. (As the USSC explains, "Quick Facts" are publications that "give readers basic facts about a single area of federal crime in an easy-to-read, two-page format.")  Here are a few of the intriguing data details from the the publication highlighting that within-guideline sentencing is actually the exception rather than the norm in these cases:

During the past three years, the rate of within range sentences for health care fraud offenders has decreased from 43.6% in fiscal year 2013 to 32.9% in fiscal year 2015.

In each of the past three years, approximately one-fifth to one-third of health care fraud offenders received a sentence below the applicable guideline range because the government sponsored the below range sentence....

In each of the past three years, approximately 34 percent of health care fraud offenders received a non-government sponsored below range sentence.

Major Ponzi schemer gets major break from guidelines ... but still subject to major prison time

This local article, headlined "Lexington Ponzi scheme founder, 70, gets nearly 15-year prison term for ZeekRewards," reports on a notable white-collar sentence handed down this morning in a North Carolina federal courthouse.  Here are some details:

A federal judge Monday handed Paul Burks, founder of ZeekRewards.com, a prison sentence of 14 years and eight months for his lead role in the Lexington Ponzi scheme. Judge Max Cogburn Jr. agreed with U.S. attorneys' "fair and generous" sentencing recommendation, a minimum 15 years and eight months and a maximum 19 years and seven months for the 70-year-old Burks.  Burks could have been sentenced to up to 59 years under federal sentencing guidelines.

ZeekRewards.com, founded in 2010, was one of the largest Ponzi schemes in U.S. history at $939 million, according to federal regulatory officials and prosecutors.  The Lexington companies, which debuted in January 2011, were shut down and their assets frozen in August 2012. There were more than 800,000 victims worldwide.

Cogburn dropped Burks' sentencing by a year so that it would be about double the 90-month prison term handed to Dawn Wright-Olivares. Wright-Olivares and her stepson, Daniel Olivares, pleaded guilty in February 2014 to fraud charges after reaching agreements in December 2013 with the U.S. Attorney’s Office for the Western District of N.C. Wright-Olivares cooperated with the federal government in its case against Burks.  Wright-Olivares served as ZeekRewards' chief operating officer, while Olivares was senior technology officer. Olivares received a two-year prison term.

On July 21, a federal jury found Burks, of Lexington, guilty of wire and mail-fraud conspiracy, wire fraud, mail fraud and tax-fraud conspiracy. Burks has been free on bond for the past 4 ½ years.  The wire and mail-fraud conspiracy charge, the mail-fraud charge and the wire-fraud charge each carry a maximum prison term of 20 years and a $250,000 fine.  The tax-fraud conspiracy charge carries a maximum prison term of five years and a $250,000 fine.

Burks opted not to speak on his behalf except to say he approved of the case being presented by his attorney, Noell Tin.... U.S. attorneys, citing Burks’ health and his role as caregiver to his wife, Susan, who has breast cancer, recommended 15.5 years to just short of 20 years. Tin asked Cogburn to set a sentence of no more than 11.5 years, also in consideration for the Burks’ health.

Cogburn and Kenneth Bell, the receiver for ZeekRewards, responded to Tin’s request by saying the U.S. attorneys’ sentencing recommendation was “fair and generous” given the level of crime involved in the Ponzi scheme. “This is a huge amount of money, which is why the sentencing guidelines run to such a large extent,” Cogburn said. “He is essentially facing a life sentencing given his health conditions.”

Tin said that among the health issues affecting Burks are hypertension, diabetes, heart illness, chronic renal failure, prostate cancer, the removal of his esophagus and mild dementia. Burks appeared in good health at the sentencing, though he walked with a slight limp.... The likely [prison] facility [for Burks] could be Butner, where fellow Ponzi scheme felony Bernie Madoff resides....

Cogburn and Bell cited the enormity of the Ponzi scheme and how Burks and other ZeekRewards officials misled and mispresented how the company generated money and how it paid “winners.” Cogburn compared Burks’ marketing strategy of capturing hundreds of millions of dollars to the Biblical story of Jesus of turning loaves and fishes into enough food to feed at least 5,000 individuals. “The scheme got out of hand, more than Mr. Burks may have thought was going to happen,” Cogburn said. “But anyone could have seen what was going to occur outside himself and his (marketing) cheerleaders.”

Former Deputy AG Phil Heymann makes full-throated pitch for Justice Department to address Rubashkin case

Last month via this Wall Street Journal commentary, two former Justice Department officials Charles Renfrew and James Reynolds advocated for clemency for Sholom Rubashkin in a piece headlined "Obama Should Pardon This Iowa Kosher-Food Executive: Prosecutors overstepped, interfered with the process of bankruptcy and then solicited false testimony."  This week via this Washington Post commentary, LawProf and former Deputy AG Philip Heymann is making the case for Rubashkin while calling out the Justice Department's failure to address these matters.  The piece is headlined "107 former Justice officials think this case was handled unjustly.  DOJ must act."  Here are excerpts:

“You don’t just try to hammer everybody for as long as you can, because you can,” Deputy Attorney General Sally Yates told the New York Times. That is the right attitude for someone tasked with the fair administration of justice.  Unfortunately, Yates and Attorney General Loretta E. Lynch have, for the past year, rebuffed efforts by me and many other former senior Justice Department officials to even discuss another prosecution in which justice fell far short: the case of Sholom Rubashkin, a Brooklyn-born rabbi who was sentenced to 27 years for bank fraud.

Rubashkin, a 57-year-old father of 10, has already served seven years for the crime, which ordinarily merits no more than three years.  Worse, his sentence was based on perjured testimony and prosecutorial misconduct.

If even a few highly respected prosecutors think a particular case was handled unjustly, resulting in a vastly excessive sentence, the department’s representatives should be prepared at least to discuss the reasons.  In Rubashkin’s case, 107 former Justice Department officials, including five former attorneys general, six former deputy attorneys general (myself included), two former FBI directors, 30 former federal judges and other leading jurists, have sought to meet with senior officials of the department we once served.  The only response: a form letter from an assistant attorney general stating that no meeting could take place while Rubashkin was also pursuing his case in court.

Meanwhile, Kevin Techau, the U.S. attorney in Iowa (where Rubashkin was prosecuted), has suggested that Rubashkin used his financial resources to buy the support of so many prominent justice officials. Not only has Rubashkin lost everything he owned in this case, his wife and children now depend heavily on the support of their community for their needs.  Moreover, all 107 of us are working on this pro bono.  Among other things, former deputy attorneys general Larry Thompson, Charles Renfrew and I have traveled to distant meetings and volunteered considerable time to this matter, all on our own nickel.

The facts are clear: Rubashkin was vice president of Agriprocessors, a kosher meatpacking plant based in Postville, Iowa.  In May 2008, more than 500 federal immigration agents raided the plant and arrested hundreds of undocumented workers.  The raid resulted in the company declaring bankruptcy.  Rubashkin was arrested a short time later and charged with bank fraud.  And this is where things went terribly wrong.  The sentence for bank fraud depends on the amount of the loss to creditors. In this case, the prosecution deliberately increased the amount of the loss — and thus the length of Rubashkin’s sentence....

I am saddened by the unwillingness of the department’s senior leaders to even discuss the injustice that more than 100 of their predecessors and former judges find evident in the Rubashkin case.  Experienced former prosecutors and career Justice Department officials view this case as a stain on an institution created to uphold the law.  If the department’s leadership refuses to act, I hope President Obama pardons Rubashkin and ends this tragedy. The alternative is a display of either blind self-righteousness or frightened defensiveness that is inconsistent with the Justice Department we all have served and respected.

Another unanimous SCOTUS win for feds in bank fraud case

Last week, as blogged here, the Supreme Court handed down its first significant criminal justice ruling of the Term via a unanimous decision against a white-collar defendant in Salman v. US, No. 15-628 (S. Ct. Dec. 6, 2016) (available here).  Today, brought another such ruling in Shaw v. US, No. 15-5991 (S. Ct. Dec. 12, 2016) (available here), which gets started this way:

A federal statute makes it a crime “knowingly [to] execut[e] a scheme . . . to defraud a financial institution,” 18 U.S.C. §1344(1), for example, a federally insured bank,18 U. S. C. §20. The petitioner, Lawrence Shaw, was convicted of violating this provision. He argues here that the provision does not apply to him because he intended tocheat only a bank depositor, not a bank. We do not accept his arguments.

Here is part of the substantive heart of the opinion for the Court and its closing flourish via Justice Breyer:

[F]or purposes of the bank fraud statute, a scheme fraudulently to obtain funds from a bank depositor’s account normally is also a scheme fraudulently to obtain property from a “financial institution,” at least where, as here, the defendant knew that the bank held the deposits, the funds obtained came from the deposit account, and the defendant misled the bank in order to obtain those funds....

The statute is clear enough that we need not rely on the rule of lenity.  As we have said, a deposit account at a bank counts as bank property for purposes of subsection (1). Supra, at 2–3.  The defendant, in circumstances such as those present here, need not know that the deposit account is, as a legal matter, characterized as bank property. Supra, at 4–5.  Moreover, in those circumstances, the Government need not prove that the defendant intended that the bank ultimately suffer monetary loss.  Supra, at 3–4. Finally, the statute asapplied here requires a state of mind equivalent to knowledge, not purpose. Supra, at 5–6.

You be the federal sentencing judge: how long a prison term for convicted Philly US Representative? UPDATE: He got 10 years!

I find high-profile, white-collar sentencing cases to be among the most interesting and dynamic because they often require a judge (and others) to balance and calibrate competing punishment theories and goals.  Because most white-collar offenders are not violent and often had a successful/productive life before getting into trouble, the need for severe punishment to incapacitate or specifically deter an offender from committing future crimes is often diminished.  But because potential white-collar offenders are likely influenced by the deterrent impact emerging from the punishment of others like them, and also because white-collar offenders typically have had a relatively advantaged background, one can reasonably believe that crime control and just punishment concerns justify always throwing the book at any and all serious white-collar offenders.  

With that backdrop, I am not surprised to have seen this past week a pair of articles reporting on lawyers are fiercely debating the federal sentences for a convicted politician from the City of Brotherly Love.  The sentencing of Chaka Fattah takes place this Monday, and these two local articles, linked here and with their introductions, provide the basics for any wanna-be federal sentencing judge:

"Feds recommend 17-22 years in prison for Fattah"

Chaka Fattah could spend the next two decades in prison if federal prosecutors get their way at the former congressman's sentencing hearing next week. In a memo filed with the court late Monday, government lawyers described the Philadelphia Democrat as "self-serving" and utterly unremorseful and urged U.S. District Judge Harvey Bartle III to sentence him within a range of 17 to 22 years in prison.

"Fattah understood the power and trust given to elected officials and that corruption benefits the few at the expense of the many," Special Assistant U.S. Attorney Eric Gibson wrote. "He chose to violate the trust of his constituents and the taxpayers to line his pockets and advance his personal and professional goals at their expense."

That punishment, if imposed, would far exceed those received by other Philadelphia-area politicians who ran afoul of federal corruption cases. State Sen. Vincent Fumo received five years after his 2009 conviction on 137 counts including conspiracy and fraud. But prosecutors noted that their recommended sentence for Fattah fell well within the federal sentencing guidelines for his crimes. What's more, they said, it tracks with other recent sentences for corrupt politicians, including former New Orleans Mayor Ray Nagin and former Detroit Mayor Kwame Kilpatrick, convicted of similar crimes.

"Fattah lawyers: A 17-to-22 year sentence for ex-congressman would be 'unnecessarily harsh'"

Chaka Fattah's lawyers pushed back against prosecutors Thursday, calling the two-decade-long sentence they recommended for the former congressman "extreme" and "unnecessarily harsh." Such a punishment, they said in a court filing, would be the longest prison term ever received by a member of Congress for corruption.

Instead, the defense urged U.S. District Judge Harvey Bartle III to consider a far shorter term and argued that the Philadelphia Democrat's misdeeds hardly compared to those of politicians found guilty in more serious cases.  "While it is true that Chaka Fattah now stands before this court convicted of serious crimes, he is also a man that has dedicated his entire life to the service of others," defense lawyer Mark Lee wrote.  "As a legislator, he made the education of disadvantaged youth his life's work.  And as a mentor and role model, Chaka Fattah inspired countless young men and women to service and self-improvement."

The defense's sentencing recommendation followed one filed Monday by prosecutors, who argued that Fattah deserves a sentence of between 17 and 22 years under federal sentencing guidelines. Fattah's team, in its filing, countered that the correct guideline range was 11 to 14 years — and suggested a far shorter term than that.

Their back-and-forth set up what is likely to be a contentious court battle Monday when Fattah, 60, will become the first member of Pennsylvania's congressional delegation to be sentenced in a federal corruption case since 1996, when Pittsburgh-area Rep. Joseph P. Kolter was sentenced to six months for covering up his theft of thousands of dollars in taxpayer funds with vouchers that claimed he used the money to buy stamps for his office.

My own punishment views in these kinds of white-collar cases, which may be influenced both by my ivory-tower history and my past work for certain white-collar defendants, lead me to believe that a few years in federal prison (plus a big financial sanction) will usually be sufficient to achieve utilitarian and retributivist goals. Stated slightly differently and in terms of the key directive of federal sentencing law, I tend to view any prison sentence of more than a few years when the defendant poses no real continuing threat to public safety to be "greater than necessary" to achieve congressional punishment purposes.

UPDATE:  This Politico article completes the sentencing story in its headline: "Fattah sentenced to 10 years in prison."

Second Circuit hints that sentence reduction might well be justified whenever guideline range is increased "significantly by a loss enhancement"

I am grateful to Harry Sandick for alerting me to this seemingly little (and easily overlooked) opinion handed down by a unanimous Second Circuit panel late last week.  Stephanie Teplin and Harry Sandick discuss the case in this thoughtful blog posting, and here are key passages from their coverage:

In United States v. Algahaim, No. 15-2024(L), the Second Circuit (Newman, Winters, Cabranes) upheld the conviction of two defendants for misconduct involving the Supplemental Nutrition Assistance Program (“SNAP”), but remanded to the district court for consideration of a below-Guidelines sentence.  The Court, in an opinion by Judge Newman, held that the outsize effect of the loss amount enhancement on the defendant’s base offense level — a sentencing scheme for fraud that is “unknown to other sentencing systems” — required the district court to reconsider whether a non-Guidelines sentence was warranted....

Judge Newman acknowledged that it was within the Sentencing Commission’s authority to construct a sentencing scheme that “use[s] loss amount as the predominant determination of the adjusted offense level for monetary offenses.”  However, he observed that “the Commission could have approached monetary offenses quite differently.  For example, it could have started the Guidelines calculation for fraud offenses by selecting a base level that realistically reflected the seriousness of a typical fraud offense and then permitted adjustments up or down to reflect especially large or small amounts of loss.”

The “unusualness” of the Guidelines system, the Court held, can be considered by a sentencing judge under Kimbrough v. United States.  “Where the Commission has assigned a rather low base offense level to a crime and then increased it significantly by a loss enhancement, that combination of circumstances entitles a sentencing judge to consider a non-Guidelines sentence.”  The Court did not hold that the sentences were in error, but remanded for the district court’s reconsideration of the sentences....

Judge Newman has long been a skeptic of the Guidelines approach to sentencing.  In this short opinion, he cites the pre-Booker decision in United States v. Lauersen, 348 F.2d 329 (2d Cir. 2003), an opinion he authored at a time when the Guidelines were mandatory, except for downward departures.  Lauersen held that where the cumulative impact of overlapping Guidelines enhancements (in that case, for loss amount and for defrauding a financial institution of more than $1 million) resulted in an overly long sentence, the district court could downwardly depart.... 

In Algahaim, Judge Newman carries this concept forward to the more open-ended sentencing regime given to us by Booker, Gall and Kimbrough.  Many judges have stated that the Guidelines are not helpful in white-collar cases and that their emphasis on loss can lead to results that are “patently unreasonable.”  E.g., United States v. Adelson, 441 F. Supp. 2d 506, 509 (S.D.N.Y. 2006) (Rakoff, J.).  Practitioners have also advocated for shorter sentences in cases involving relatively low loss amounts or where the defendant had no prior record.  See ABA Criminal Justice Section, “A Report on Behalf of the ABA Criminal Justice Section Task Force on the Reform of Federal Sentencing for Economic Crimes” (November 10, 2014) (last visited December 1, 2016).  To the extent that district judges needed any further encouragement, Judge Newman’s decision lets district judges know that a Guidelines sentence need not be imposed where the “significant effect of the loss enhancement” leads to an unduly long sentence.

Because Judge Jon O. Newman was my very first boss as a lawyer (I served as his law clerk from 1993-94 starting just months after my graduation from law school), I am always partial to his opinions and especially as to his opinions about sentencing issues. And, as regular readers know, I am always partial to judicial opinions that thoughtfully explain whether and when the federal sentencing guidelines should or should not be followed. And so, perhaps my partiality is going to bubble over when I assert that Judge Newman is being especially astute and shrewd in his pro-discretion sentencing work in United States v. Algahaim, in part because the particulars of the loss enhancement in Algahaim are actually not all that major.

Specifically, in Algahaim, the two defendants who were appealing their convictions and sentences were subject to offense-level increases for loss of "only" 10 and 12 points  under USSG § 2B1.1(b)(1).  Though such loss enhancements certainly appear significant when added to a base offense level of 6, in many other fraud cases the loss enhancement under 2B1.1(b) can commonly add 16 or 20 or 24 or even up to 30 points.  Despite those realities, the Second Circuit in Algahaim has now called just a 10-level loss enhancement in a fraud case "significant" and also has said this enhancement is alone large enough to merit serious consideration of a below-guideline sentence.  For that reason, I would now expect lots of astute and shrewd future white-collar defendants throughout New York and elsewhere to be citing to Algahaim to bolster arguments for below-guideline sentences whenever the guideline range is moved up a lot by loss calculations.

Making the case that the next Administration needs to demonstrate that "laws are not just for the little people"

Writing here in the National Review under the headline "A Memo for Attorney General Jeff Sessions," former Justice Department officials Robert Delahunty and John Yoo share some interesting advice for the likely next AG.  I recommend the lengthy piece in full, and here is just a taste:

Hillary Clinton’s alleged criminality was a centerpiece of the last election and may well have cost her the presidency. It was not very long ago that crowds at Trump rallies were chanting “Lock her up!” We can think of no earlier presidential contest in which a candidate’s alleged criminal wrongdoing was so central an issue in the voters’ decision-making. This is truly an unprecedented case.

Unless President Obama acts first to pardon Clinton, the task of balancing these considerations will be left to the new president and his attorney general. Our view is that President Trump should offer her a pardon. Just as with President Gerald Ford’s pardon of Richard Nixon, Clinton’s acceptance of that offer would be widely understood as a tacit admission, if not perhaps of proven criminal guilt, then at least of wrongdoing sufficient to justify prosecution. We think that the matter should rest there.

But even if that were to happen, there are, apparently, more ongoing criminal investigations into the affairs of the Clintons and their inner circle. The investigation that Comey suspended concerned Clinton’s use of a private server to transact governmental business involving classified materials. Media reports have indicated that there are no fewer than five other investigations under way. These include at least one investigation into whether the Clinton Foundation has committed financial crimes or been sullied by influence-peddling.

We believe that those investigations — which were begun under the Obama administration — should be pursued. And if in the end, the findings of those investigations justify bringing criminal charges against the vast network of Clinton helpers and aides, those charges should be brought and tried.... Trump is right to express a desire not to harm the Clintons: The criminal process should never be turned into a political vendetta or even appear to be one. But no one, and certainly not the powerful and politically connected, should be above the law — the Clintons included. Trump’s campaign pledges on that issue resonated with the American public. The law is not just for the little people, and the little people are watching....

Jeff Sessions will take the helm of a Justice Department that has been terribly compromised in other respects. He must act decisively to change its culture. Again, the Clinton “reverse Midas” touch — transforming gold into dross — was at work. Candidate Clinton publicly offered to retain Attorney General Lynch in office if she were elected, even while Lynch at the time was charged with overseeing criminal investigations into the Clinton e-mail and Foundation scandals. By not publicly declining that offer — in effect, a bribe — Lynch tainted the integrity of the investigations as well as the office of attorney general.

President Obama also undermined public confidence in the Justice Department. He maintained that he had learned of Clinton’s private server only when everyone else had. Yet later leaks revealed that he in fact had corresponded numerous times with Clinton through her off-the-record system. Obama also proclaimed Clinton not guilty of wrongdoing even while the investigation into the use of her private server was still open....

These incidents came towards the end of an eight-year period in which the honor of the Justice Department had been badly tarnished. Much of the damage occurred during the five-year stint of former attorney general Eric Holder, the first and only attorney general to be held in contempt of Congress. (Holder’s conduct was so egregious that even most House Democrats declined to vote against the contempt resolution.) Under Holder, the DOJ became thoroughly politicized, taking positions that were, frankly, absurd — on legal issues such as congressional voting representation for the District of Columbia, presidential recess-appointment power, or the War Powers Resolution. Holder’s Justice Department brought cases not on their legal merits but in order to target the administration’s perceived political or ideological opponents....

This election was about the place of law in American public life. The voters were rightly repelled by the performance of public figures, above all Hillary Clinton and her entourage, who acted as if they were above the law. Voters resented President Obama’s chronic refusal to enforce the law — whether in health care or immigration — when he found that it did not suit his political purposes. They seem to have forgiven Donald Trump for his alleged manipulation of the tax code because, even if dodgy, his actions were not illegal.

As president, Donald Trump owes it to his voters and to the American people as a whole to restore the public’s trust in its government. He must repair the contract between the people and its agents that his rival and his predecessor have shattered. And Attorney General Jeff Sessions needs to be a strong and stalwart presence at his right hand as the new president makes this happen.