Sentencing Law and Policy

Interesting new TRAC data on federal white-collar prosecutions

The Transactional Records Access Clearinghouse (TRAC) recently released this notable new report titled "Federal Prosecution of White-Collar Crimes Receiving Less and Less Attention."  The report captures all sort of data about federal white-collar prosecutions, and is worth a read in full.  Here are some snippets:

The latest government case-by-case records reveal that as of March 31, 2025, federal efforts to prosecute white-collar crimes have continued to decline – down more than 10 percent from FY 2024 in the last full year of the Biden administration....

This report is based on case-by-case records from the DOJ ordered released each month to TRAC after successful lengthy litigation under the Freedom of Information Act. Previous TRAC reports based on these data have covered the long-term decrease in white-collar prosecutions, even as court enforcement for immigration and drug offenses had increased,...

U.S. Attorney offices filed 4,332 prosecutions for white-collar crimes in FY 2024, less than half of the 10,269 prosecutions filed in FY 1994 three decades earlier. And FY 2025 is projected to fall even further to just 3,862....

In general, all prosecution rates except for immigration dropped substantially in the first half of FY 2025. In addition, compared with other program categories, prosecutors file prosecutions on criminal referrals at lower rates for white-collar offenses than almost all other program categories. Depending on the year, officials have filed prosecutions on between 30 and 50 percent of all cases referred to their office since FY 1986 until FY 2025 when it fell to just 24 percent.

Prez Trump continues to pardon array of white-collar offenders

I have flagged in prior posts (examples here and here and here) that persons convicted of various white-collar offenses are those now most likely to be getting the benefit of Prez Trump's clemency pen.  The last few days have demonstrated this reality again, as documented by these press pieces:

From CNN, "Trump announces pardon for former Virginia sheriff convicted of federal bribery charges"

From NBC News, "Trump to pardon Todd and Julie Chrisley, the reality TV couple convicted of fraud, tax evasion"

Supreme Court unanimously upholds broad reach of federal wire fraud prohibition

The Supreme Court handed down a unanimous opinion (with three interesting concurrences) this morning in Kousisis v. US, No. 23–909 (S. Ct. May 22, 2025) (available here).  Here is the accounting of the votes and opinon writing:

BARRETT, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, KAGAN, KAVANAUGH, and JACKSON, JJ., joined. THOMAS, J., filed a concurring opinion. GORSUCH, J., filed an opinion concurring in part and concurring in the judgment. SOTOMAYOR, J., filed an opinion concurring in the judgment.

Here is how Justice Barrett's opinion for the Court gets started:

Stamatios Kousisis and the industrial-painting company he helped manage, Alpha Painting and Construction Co., secured two government contracts for painting projects in Philadelphia.  Both contracts required the participation of a disadvantaged business—and in its bids for the projects, Alpha represented to the Pennsylvania Department of Transportation (PennDOT) that it would obtain its materials from a qualifying supplier.  See 49 CFR §§26.21(a), 26.5 (2024).  This promise turned out to be an empty one: In addition to using the supplier solely as a pass-through entity, Alpha and Kousisis submitted multiple false certifications to cover up their scheme.  So although Alpha’s paint work met expectations, its adherence to the disadvantaged- business requirement did not.

The Government charged Alpha and Kousisis with wire fraud, asserting that they had fraudulently induced PennDOT to award them the painting contracts. See 18 U. S. C. §1343. Under the fraudulent-inducement theory, a defendant commits federal fraud whenever he uses a material misstatement to trick a victim into a contract that requires handing over her money or property — regardless of whether the fraudster, who often provides something in return, seeks to cause the victim net pecuniary loss. We must decide whether this theory is consistent with §1343, which reaches only those schemes that target traditional money or property interests. See Ciminelli v. United States, 598 U.S. 306, 316 (2023). It is, so we affirm.

Criminal law fans will want to read all the opinions, especially because the concurrences collectively run longer than the majority. I will highlight here the start of Justice Sotomayor's separate opinion because she uses sports well to help capture the ruling:

The Court today rightly rejects petitioners’ request to graft an economic-loss requirement onto the federal wire fraud statute. When a defendant tricks a victim out of their money by promising one thing and delivering something materially different, it is no defense to say that the delivered items are of equal economic value. Statutory text, precedent, and history mandate that conclusion, as the majority explains.  See ante, at 7–16.  Common sense, unsurprisingly, points in the same direction.  A Yankees fan deceived into buying Mets tickets is no less defrauded simply because the Mets tickets happen to be worth the same amount as the promised Yankees ones.  That straightforward conclusion is all that is necessary to resolve this case, and I would go no further.  To the extent the majority appears to speak more broadly, I part ways from its approach.

"Lawyers Are Quoting $1 Million in Fees to Get Pardons to Trump"

The title of this post is the headline of this new Bloomberg Law article, which is worth reading in full.  Here are some extended excerpts:

The president “is effectively and responsibly using his constitutional authority,” White House spokesman Harrison Fields said. “Over the past four years, we have witnessed the weaponization of the justice system against the president’s allies. The president is committed to righting those wrongs and ending lawfare.” The Justice Department is “committed to timely and carefully reviewing” all clemency applications and making unbiased, consistent recommendations to the president, a spokeswoman said in a statement.

President Joe Biden set a record for granting clemency during his term, and was broadly criticized by Republicans and some Democrats for protecting his family members and allies. Trump has already shown a willingness to use the clemency power more regularly, with a soft spot for displays of loyalty and gripes about prosecutorial overreach. In his second term, the president has overseen a breakdown in the traditional vetting process for deciding who gets relief and supercharged a pardon economy unlike anything seen before.

Powerful people in business and finance are rushing pitches and stepping up lobbying, catering their appeals to Trump and hiring lawyers with connections to the administration. These defendants with means are spending big for a chance to clear their names, at least in official records if not in public perception. Interviews with about two dozen lawyers and pardon hopefuls, many of whom asked not to be identified discussing plans that weren’t public, have pulled back the curtain on the clemency process under Trump. Some outlined plans to spend at least tens of thousands of dollars on attorneys, lobbyists and consultants, while others say the costs will reach well north of $1 million to put cases together and get them in front of the White House.

“There’s a huge level of interest,” said Margaret Love , who served as the US pardon attorney in the 1990s and now specializes in clemency in private practice. “People think Trump is going to do something for them.”

Presidents from both parties have long used their authority to circumvent official process and dole out pardons to friends and supporters. The constitution puts almost no limits on the practice, though leaders typically wait until the end of their tenure to award clemency. Trump has announced clemency grants on a dozen occasions since he took office three months ago....

“It seems like ordinary people who don’t have the resources to hire a lobbyist or well-connected lawyer and don’t have political connections and access to the White House front door are not being considered for clemency at all,” said Liz Oyer , who was the Justice Department ’s top pardon attorney for three years. She said she was fired in March after refusing to recommend that Hollywood actor and Trump ally Mel Gibson have his gun rights restored despite a 2011 domestic violence conviction. Gibson’s gun rights were restored in April.

Fields, the White House spokesman, said Trump would work with the administration’s pardon czar, Alice Marie Johnson, to “continue to provide justice and redemption to countless deserving Americans.”

Some prior recent related posts covering only a portion of Prez Trump's clemency actions:

• Prez Trump grants 14 commutations and blanket pardons to all other Jan 6 defendants 
• Prez Trump formally announces Alice Marie Johnson will be his "pardon czar" 
• Wide praise, but uncertain plans, for Prez Trump's new pardon czar
• Prez Trump continuing to make robust use of his clemency pen (for white-collar offenders) 
• Prez Trump keeps using his clemency pen, building quite the clemency record

Noting a notable economic cost from white-collar pardoning

I have flagged in recent posts here and here and here that persons convicted of various white-collar offenses are now those most likely to be getting the benefit of Prez Trump's clemency pen.  And via this new Washington Post piece, headlined "Fired DOJ attorney says on TikTok that Trump pardons cost $1 billion," I see that former DOJ Pardon Attorney Liz Oyer is putting a notable pricetag on recent pardon practices.  Here are excerpts:

Liz Oyer, the Justice Department’s recently fired pardon attorney, made a staggering claim on social media this week: President Donald Trump’s pardons of people convicted of white-collar crimes have cost Americans $1 billion.

She arrived at the number by adding up all the money that people who were pardoned allegedly owed in restitution, based on how much they were convicted of stealing.  Some pardon recipients had not been sentenced, which means that a judge had not yet ruled on prosecutors’ calculations of what they owed back to their victims.  At least one pardon recipient had already started paying restitution and could attempt to get that money back.

Oyer, who has been outspoken against the Trump administration since her ouster, told The Washington Post that the $1 billion figure highlights the unusually high number of Republican allies convicted of fraud and pardoned by Trump before they served their sentences — a significant break from the traditional and often protracted pardon application process....

Much of the $1 billion Oyer cites comes from Trump’s pardon of Trevor Milton, the founder of an electric-truck company who was convicted of fraud in 2023.  Milton had been sentenced to four years in prison.  A judge had not yet determined the restitution he should pay; federal prosecutors told the judge in March that they believed Milton owed more than $680 million to defrauded shareholders, according to federal court records.

Trump’s pardons also wiped out a $100 million fine against a cryptocurrency exchange called HDR Global Trading Limited (BitMEX).  The company pleaded guilty to violating anti-money-laundering laws to boost revenue.  Trump also pardoned four company executives who pleaded guilty to financial crimes....

In one of her TikTok videos, Oyer said Trump’s pardon last week of Michele Fiore — a Republican politician and activist in Nevada — cost Americans $70,000.  Fiore was convicted last year of taking money meant to honor slain police officers and using it for plastic surgery, rent and her daughter’s wedding.

Fiore had not yet been sentenced when she received Trump’s pardon, but Oyer is assuming that a judge would have determined she owed at least $70,000 in restitution since that’s what she was convicted of stealing from Nevadans who donated to the fundraising campaign for the police officers.

Sentenced exactly to what federal prosecutors requested, former US Rep George Santos given 87 months in prison

As reported in this AP piece, "[d]isgraced former U.S. Rep. George Santos, who lied about his life story and defrauded donors, was sentenced Friday to over seven years in prison, sobbing as he heard his punishment." Here is more:

Santos, who pleaded guilty last summer to federal wire fraud and aggravated identity theft, appealed for mercy, telling a court through tears that he was “humbled” and “chastised” and realized he had betrayed his constituents’ trust. “I offer my deepest apologies,” he said, adding: “I cannot rewrite the past, but I can control the road ahead.”

U.S. District Court Judge Joanna Seybert evidently wasn’t convinced. “Where is your remorse? Where do I see it?” she asked as she sentenced him to 87 months behind bars. She said the former politician appeared to feel that “it’s always someone else’s fault.”

The New York Republican served in Congress barely a year before his House colleagues ousted him in 2023. He admitted to deceiving donors and stealing the identities of nearly a dozen people, including his family members, to fund his winning campaign. As part of a plea deal, Santos has agreed to pay roughly $580,000 in penalties....

The 36-year-old Santos is due to report to prison July 25. He didn’t respond to reporters’ shouted questions outside the courthouse, but he told The Associated Press on Thursday that he was resigned to his fate. “I’m doing as well as any human being would be doing given the circumstances,” Santos wrote in a text message, adding that he was “ready to face the music.”

Prosecutors sought the 87-month sentence, questioning Santos’ remorse in light of his recent social media posts casting himself as a victim of prosecutorial overreach. Prosecutor Ryan Harris told the judge that some of Santos’ victims were “extremely vulnerable,” including a woman with brain damage and two octogenarian men who have dementia. Santos has said in recent days that he has no intention of paying back victims promptly, Harris noted.

“People think of this as a victimless crime because it’s about money. There are many victims in this crime,” added New York Labor Commissioner Roberta Reardon. She addressed the court as a victim because, before running for office, Santos collected unemployment benefits while actually working for a Florida company. Once in Congress, he co-sponsored legislation intended to root out unemployment fraud.

Santos’ lawyers had called for a two-year prison stint, the mandatory minimum sentence for aggravated identity theft. Defense lawyer Andrew Mancilla portrayed the ex-congressman as a troubled figure forged by adversity. Santos grew up in a “broken house” and was subjected to bullying throughout his life, the attorney said....

Santos was elected in 2022, flipping a wealthy district representing parts of Queens and Long Island for the GOP. Soon after, it was revealed that the political unknown had fabricated much of his life story, painting himself as a successful business owner who worked at prestigious Wall Street firms and held a valuable real estate portfolio. In reality, Santos was struggling financially and even faced eviction. The revelations led to congressional and criminal inquiries into how he had funded his campaign. “He told lie after lie until it caught up with him — until we caught up with him and exposed him for what he truly was: an opportunist and a fraud,” Nassau County District Attorney Anne Donnelly, a Republican, said outside court Friday. Her office also investigated Santos.

Prior related posts:

• You be the federal judge: what sentence for former US Rep George Santos after his plea to fraud and identity theft?
• In sentencing memos, feds advocate for 7+ years in prison while George Santos' team urges statutory minimum of 2 years
• Spicy supplemental submissions as federal sentencing for George Santos approaches

Prez Trump grants another pardon to another person facing federal sentencing for fraud

As reported in this AP article, "President Donald Trump has pardoned a Nevada Republican politician who was awaiting sentencing on federal charges that she used money meant for a statue honoring a slain police officer for personal costs, including plastic surgery." Here is more:

Michele Fiore, a former Las Vegas city councilwoman and state lawmaker who ran unsuccessfully in 2022 for state treasurer, was found guilty in October of six counts of federal wire fraud and one count of conspiracy to commit wire fraud. She was out of custody ahead of her sentencing, which had been scheduled for next month.

In a lengthy statement Thursday on Facebook, the loyal Trump supporter expressed gratitude to the president while also accusing the U.S. government and “select media outlets” of a broad, decade-long conspiracy to “target and dismantle” her life. The White House confirmed Fiore had been pardoned but did not comment on the president’s decision.

The pardon, issued Wednesday, comes less than a week after Fiore lost a bid for a new trial.  She had been facing the possibility of decades in prison.  Federal prosecutors said at trial that Fiore, 54, had raised more than $70,000 for the statue of a Las Vegas police officer who was fatally shot in 2014 in the line of duty, but had instead spent some of it on cosmetic surgery, rent and her daughter’s wedding.  “Michele Fiore used a tragedy to line her pockets,” federal prosecutor Dahoud Askar said....

Fiore, who does not have a law degree, was appointed as a judge in deep-red Nye County in 2022 shortly after she lost her campaign for state treasurer.  She was elected last June to complete the unexpired term of a judge who died but had been suspended without pay amid her legal troubles.... In her statement Thursday, Fiore also said she plans to return to the bench next week.  Nye County said it is awaiting an update on Fiore’s current suspension from the state Commission on Judicial Discipline, which told The Associated Press in an email that it was aware that Fiore had been pardoned but that it didn’t have further comment on her situation.

As highlighted in posts here and here from last month, it seems that persons convicted of various white-collar offenses are now those most likely to get the benefit of Prez Trump's clemency pen.  This list at the Justice Depatment of "Clemency Grants by President Donald J. Trump (2025-Present)," details that the last dozen or so grants are all of white-collar defendants.  (In addition, that list includes an early March communtation of the sentences Jean Pinkard who was apparently convicted of opioid distributions and whose commulation received little press beyond small converage in this story.  I would guess that "Pardon Czar" Alice Marie Johnson may have had a role in the Pinkard commutation, but likely not all the more recent fraud grants.)

"Pardoning Corporations"

The title of this post is the title of this new article now available via SSRN authored by Brandon Stras.  Here is its abstract:

Though the Pardon Clause could be interpreted to include or exclude corporate offenses, overlooked history suggests the broader interpretation is the more plausible one.  The Clause codified a power that had existed for centuries in England. And corporations were often pardoned at common law — including the Massachusetts Bay Company.  This tradition lasted for hundreds of years, and it is the backdrop against which the Framers drafted the Pardon Clause. Even following the Founding, people continued to understand that the pardon power stretched to corporations. Since that time, however, institutional memory has faded.

The President could condition forgiveness on corporate compliance programs or on donations to his political campaign. He could offer pardons to foreign companies to sweeten relations with other countries.  He could effectively abolish corporate criminal liability during his terms, at least at the federal level, even for prosecutions initiated by independent agencies. He could pardon his own companies to protect them from prosecution.  Or he might even pardon companies that bribed him.  Given the sweeping pardon power in Article II, all these decisions fall within the President’s discretion.  He does not even need to wait for a company to apply.

Some of these consequences are startling, but Congress can limit the pardon power’s effects in two ways.  First, Congress can refuse to appropriate refunds of pardoned fines.  At the time of writing, Congress has not appropriated such refunds for individuals or companies. That decision denies people reprieve from the most common, and often most consequential, punishments imposed on companies.  Second, Congress can repeal statutes that impose corporate criminal liability and replace them with unpardonable civil infractions, depriving the President of offenses to pardon.

Some state constitutions might also include a power to pardon companies.  Though this account is more tentative, some attorneys could be more effective advocates if they encouraged their corporate clients to apply for pardons. Federal juries convict around 100 companies per year; states impose the rest of the corporate criminal liability.  In most states, there is little authority one way or the other, which creates opportunities for good lawyering.  This is important because, even if the President never pardons a company again, some state governments might consider doing so.  Alaska’s Governor already did, and that pardon is unlikely to be alone forever.

In sentencing memos, feds advocate for 7+ years in prison while George Santos' team urges statutory minimum of 2 years

In this post last August, I asked "what sentence for former US Rep George Santos after his plea to fraud and identity theft?". US District Judge Joanna Seybert is scheduled to provide the official answer to this question at George Santos' scheduled federal sentencing on April 25, 2025.  And yesterday the parties filed their sentencing memoranda, and the AP provides this accounting of the filings:

Prosecutors are seeking more than seven years in prison for disgraced former U.S. Rep. George Santos after he pleaded guilty to federal fraud and identity theft charges.

The U.S. Attorney for the Eastern District of New York argued in a court filing Friday that a significant sentence was warranted because the New York Republican’s “unparalleled crimes” had “made a mockery” of the country’s election system....

Prosecutors also argued that Santos had been “unrepentant and defiant” for years, dismissing the prosecution as a “witch hunt” and refusing to resign from Congress as his web of lies was debunked. They said his claims of remorse after pleading guilty “ring hollow” and suggested he has a “high likelihood of reoffending” given he has not forfeited any of his ill-gotten gains or repaid any of his victims....

In their own sentencing memo Friday, they rejected the notion that Santos will fall back into criminal behavior, noting he has no prior criminal record and also provides “crucial” support to his sister and her young daughter.

They argued for a two-year prison term, which is the mandatory minimum sentence for aggravated identity theft. The lawyers maintain such a sentence is in line with those handed to former U.S. Rep. Jesse Jackson Jr. and other political figures facing similar financial crimes.

They also touted Santos’ cooperation in a separate federal investigation into a Texas man who tried to dupe Santos out of nearly $1 million by posing as a political fixer offering to destroy evidence in his cases. “This sentence, coupled with the significant collateral consequences Mr. Santos has already suffered—including the loss of his congressional seat and public humiliation — would send a clear message that such conduct will not be tolerated,” the lawyers wrote.

The filed memoranda from the parties make for interesting reads. In many cases, the defense sentencing filing is much longer than the the filing by the prosecution. But, as one can discover from the links below, the feds here had a whole lot more to say:

Prosecutors' sentencing letter in United States v. Devolder Santos

Defendant's Sentencing Memorandum in United States v. Santos

Prez Trump continuing to make robust use of his clemency pen (for white-collar offenders)

Prez Trump made historic use of his clemency powers during his first few days in office this year, and he clearly continues to enjoy to exercising his broad executive authority to grant pardons and commutations.  Consider all this federal clemency action today:

"Trump pardons three founders of BitMEX cryptocurrency exchange convicted of money laundering"

"Convicted of bilking investors, Nikola founder and Trump donor gets a presidential pardon"

"Trump commutes sentence of Ozy Media founder Carlos Watson convicted of fraud"

Supreme Court unanimously limits reach of federal bank fraud statute to fraud in Thompson

This morning the US Supreme Court handed down a unanimous opinion in favor of a federal criminal defendant on a statutory issue in Thompson v. US, No. 23–1095 (S. Ct. March 21, 2025) (available here).  The opinion for the Court, authored by Chief Justice Roberts, begins and ends this way:

Patrick Thompson took out three loans totaling $219,000 from the same bank. Later, Thompson told the Federal Deposit Insurance Corporation (FDIC) that he had “borrowed . . . $110,000” from the bank. Thompson was indicted under 18 U.S.C. §1014 for making “false statement[s]” to the FDIC. Thompson argued that his statements were not false because he had in fact taken out a loan for $110,000 just as he said. Both the District Court and the Seventh Circuit held that they did not need to consider that argument. In their view, the prohibition in §1014 against “false statement[s]” extends to misleading ones as well, and Thompson’s statements were at least misleading in failing to mention the additional loans. The question presented is whether §1014 criminalizes statements that are misleading but not false....

In casual conversation, people use many overlapping words to describe shady statements: false, misleading, dishonest, deceptive, literally true, and more.  Only one of those words appears in the statute.  Section 1014 does not criminalize statements that are misleading but true. Under the statute, it is not enough that a statement is misleading.  It must be “false.”

The judgment of the Court of Appeals for the Seventh Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion. 

Justice Alito authored a four-page concurrence making a number of points, and primarily stressing that "in considering whether a statement is 'false,' judges and juries must view the statement in 'the context in which it is made'.”

Justice Jackson authored a one-page concurrence contending that, in this case, "the jury was properly instructed that it could find Thompson guilty only if the prosecution proved beyond a reasonable doubt that Thompson 'made the charged false statement[s]'.”

And the federal pardon news and intrigue keeps going on and on

It has become somewhat more common in recent times for a president to make considerable clemency news in his final few months in office.  But Prez Trump continues to make lots of clemency headlines in his first few months in office during his second term.  Here are some stories from just the last few days:

From ABC News, "DOJ pardon attorney says she was removed after dispute over Mel Gibson's gun rights"

From Cryptopolitan, "Crypto criminals and convicted politicians line up for Trump’s pardon"

From Politico, "Pleas on X, Biden dirt and attacks on the FBI: As Trump flexes his pardon powers, defendants angle for their get-out-of-jail free card"

From The Tennessean, "Ex-Tennessee Sen. Brian Kelsey reports receiving pardon from President Donald Trump"

From USA Today, "Donald Trump says he isn't considering pardoning Derek Chauvin in George Floyd's murder"

Justice Jackson expresses interest in seeing fraud sentencing guidelines "revisited"

This new Reuters article discusses (too) briefly Justice Jackson's comments today about the federal sentencing guidelines at the ABA's White Collar Crime Institute:

U.S. Supreme Court Justice Ketanji Brown Jackson said on Thursday she would support revisiting sentencing guidelines for white collar crime because the current framework leads to uneven punishments.

The amount of money involved has more sway than the level of culpability, Jackson noted at an American Bar Association conference in Miami. "Fairness requires that similarly situated defendants be treated similarly."

"I'd like to see the guidelines revisited as a whole," she said to applause from the audience largely composed of white collar criminal defense lawyers.

Jackson, an appointee of former Democratic President Joe Biden, previously served on the independent U.S. Sentencing Commission, which develops guidelines for judges to consider as they impose sentences.

During her time on the commission, she said the recommended sentences in white collar cases "ratcheted way, way up" because of the rising amount of money involved in fraud schemes.

Without a lot more details and context, it is hard to tell if Justice Jackson said something particularly provocative with these comments. But it does appear that she criticize the problematic structure and undo severity of the fraud guidelines.  

Ninth Circuit affirms convictions and sentences of Elizabeth Holmes and her co-defendant

As reported in this Bloomberg Law piece, "Elizabeth Holmes lost her last-ditch effort to overturn her 2022 fraud conviction when a federal appeals court on Monday upheld the judgment against the disgraced Theranos Inc founder.  A three-judge panel for the US Court of Appeals for the Ninth Circuit in San Francisco also upheld the conviction of her former business and romantic partner Ramesh 'Sunny' Balwani."  The full Ninth Circuit panel opinion in US v. Holmes and Balwani, No. 22-10312 (9th Cir. Feb. 24, 2025) (available here), runs 54 pages with the final eight pages discussing a few sentencing issues.

Interestingly, the sentencing issue that gets the most attention in this opinion is the "district court’s restitution order requiring Defendants to pay $452 million to fourteen victims under the MVRA."  This section of the panle opinion indicates that there was possible error in the district court's restitution findings, but that "any error by the district court was harmless because the district court’s factual findings compel the conclusion that the victims’ actual losses were equal to the total amount of their investments."  While others might find the substance of the discussion notable, the reference to the the district court’s factual findings" gets me to keep thinking about Justice Gorsuch's short opinion this morning (discussed here) questioning the constitutionality of a judge "order[ing] restitution in a criminal case based on his own factual findings, without the aid of a jury."

I suspect that neither of the Theranos defendants have preserved the issue of whether their restitution orders, based only on judicial fact-finding, violated their Sixth Amendment rights.  But the Ninth Circuit panel opinion suggests that, even if a district judge gets something wrong when deciding on criminal restitution amounts, the judgment will still be upheld if the judge's findings were "close enought for government work."

A few of many prior related posts:

• Elizabeth Holmes convicted on 4 of 11 fraud charges ... but now can be sentenced on all and more 
• Sentencing memos paint very different pictures of Elizabeth Holmes 
• Federal judge imposes (within guideline) sentence of 135 months on Theranos founder Elizabeth Holmes 
• In Ninth Circuit appeal, Elizabeth Holmes challenges convictions and also seeks resentencing

You be the judge: what federal sentence for prominent elderly state legislator convicted on 10 of 23 corruption counts?

The question in the title of this post is prompted by this lengthy Chicago Tribune article reporting on the results of a lengthy trial and jury deliberation under the headline "No sweep for either side, but Madigan jury’s split verdict still offers ‘historic’ corruption conviction." Here are a few details with a focus on a few legal particulars:

Illinois House Speaker Michael Madigan minced no words on the day Democratic Gov. Rod Blagojevich, his longtime political nemesis, was arrested on federal corruption charges in December 2008. “Today’s events are shocking and disappointing,” Madigan, the then-leader of the state Democratic Party, said on that infamous day 16 years ago. “It represents a new low for conduct by public officials.”

At the time, Blagojevich was the latest in a depressing array of governors, state legislators, county commissioners and aldermen accused of selling out the public’s trust for personal gain. On Wednesday, a federal jury added Madigan to that same, sad parade.

In a verdict sure to reverberate across the political landscape, the jury found Madigan, once the most powerful politician in the state, guilty of bribery conspiracy and other corruption charges alleging he used his public office to increase his power, line his own pockets and enrich a small circle of his most loyal associates.

But neither prosecutors nor Madigan could declare total victory. Jurors’ final verdict was overall mixed, deadlocking on several counts — including the marquee racketeering conspiracy charge — and acquitting Madigan on numerous others. Jurors also deadlocked on all six counts related to Madigan’s co-defendant, Michael McClain.

Jury foreman Tim Nessner told the Tribune late Wednesday that the panel was deadlocked 11-1 in favor of acquittal on the main racketeering charge as well as several other counts. He also said he felt much of the prosecution was “government overreach.”...

The split verdict does not avert the possibility of a significant sentence for Madigan, who turns 83 in April.  Several of the guilty counts carry a maximum of 20 years in prison, according to the U.S. attorney’s office.  No date has been set for Madigan’s sentencing.

It was a complicated conclusion to a complicated case, and leaves prosecutors to decide whether to go for a retrial. Speaking to reporters after the verdict, acting U.S. Attorney Morris Pasqual said it was too soon to make a decision on how to proceed. “We will obviously closely discuss the developments … and at the appropriate time we’ll make a decision about whether to seek a retrial,” Pasqual said....

Madigan was convicted on 10 of 23 counts, including one count of conspiracy related to a multipronged scheme to accept and solicit bribes from ComEd. Jurors also convicted him on two counts of bribery and one Travel Act violation related to payments funneled to Madigan associates for do-nothing ComEd subcontracts.

Madigan was also convicted on six out of seven counts — including wire fraud and Travel Act violations — regarding a plan to get ex-Ald. Daniel Solis, a key FBI mole who testified at length in the trial, appointed to a state board.

Jurors acquitted Madigan of one bribery count related to that plan. That charge specifically alleged Madigan took steps to find a board seat for Solis through the administration of incoming Democratic Gov. JB Pritzker.  One of the last pieces of evidence jurors heard before closing arguments was a stipulation that, if called to testify, Pritzker would say he has no recollection of discussing a Solis appointment with Madigan.

Jurors also acquitted Madigan of a bribery charge alleging he tried to have Juan Ochoa, a onetime political nemesis, put on the ComEd board. In addition, he was found not guilty of one Travel Act violation related to the ComEd scheme. And Madigan was acquitted of all four counts related to an alleged scheme to pressure developers of a West Loop high-rise into giving business to his law firm....

The verdict caps one of the most significant political corruption investigations in Chicago’s sordid history and cements an extraordinary personal fall for Madigan, the longest-serving state legislative leader in the nation’s history who for decades held an iron-tight grip on the House as well as the state Democratic Party.

There are a lot more details about Madigan and this trial in the full Tribune article, and many more details will surely be relevant to the determination of Madigan's advisory sentencing guideline range and at his eventual sentencing.  But, particulars aside, the foundational question at a forthcoming sentencing would seem to be whether and how much prison time would be fitting for a 83-year-old prominent career politicial convicted of some (but not a majority) of corruption charges.

Shohei Ohtani’s ex-interpreter gets (within-guideline) sentence of 57 months

In this post a few weeks ago, titled "You be the umpire: what sentence for Shohei Ohtani’s ex-interpreter?," I inquired what folks thought should be the federal sentence for Ippei Mizuhara, the former interpreter for LA Dodgers star Shohei Ohtani who admitted to stealing $17 million to help pay his gambling debts.  In that post, I noted that that Mizuhara sought a below-guideline sentence of 18 month while prosecutors sought a within-guideline sentence of 57 months.  This AP story reports on yesterday's sentencing:

The former interpreter for baseball star Shohei Ohtani was sentenced Thursday to nearly five years in prison for bank and tax fraud after he stole nearly $17 million from the Los Angeles Dodgers player’s bank account.

Ippei Mizuhara, who was supposed to bridge the gap between the Japanese athlete and his English-speaking teammates and fans, was sentenced in federal court in Santa Ana to four years and nine months after pleading guilty last year.

He was ordered Thursday to pay $18 million in restitution, with nearly $17 million going to Ohtani and the remainder to the IRS. He was also sentenced to three years’ supervised release on top of the prison sentence and ordered to surrender to authorities by March 24.

“The magnitude of the theft — $17 million — in my view, is shockingly high,” U.S. District Judge John W. Holcomb said upon issuing the sentence. Holcomb said most people don’t make that much money in their lifetime. “I hope that Mr. Mizuhara will be able to repay that sum,” Holcomb said. “That remains to be seen.”

Mizuhara addressed the court and apologized to Ohtani, the Los Angeles Dodgers, the government and his family.... Mizuhara has acknowledged using the money to cover his growing gambling bets and debts with an illegal bookmaker, in addition to $325,000 worth of baseball cards and his own dental bills....

Mizuhara’s attorney, Michael Freedman, had asked for a sentence of one and a half years. During the sentencing hearing, he asked that the judge consider his client’s gambling addiction was challenged by his connection to a bookie willing to credit him large sums of money because of who he worked for. “He was exposed to a world in which he was given a unique and unlimited credit to run up these kinds of numbers,” Freedman said.

Federal prosecutor Jeff Mitchell said the amount stolen by Mizuhara amounted to about half of what Ohtani earned from the Los Angeles Angels when he pitched for them, and the damage went even further. “The most significant harm to Mr. Ohtani is the reputational damage, which may never be fully repaired,” Mitchell said....

Last year, Ohtani and the Dodgers won the World Series, and the baseball star won his third Most Valuable Player award.

Prior related post:

• You be the umpire: what sentence for Shohei Ohtani’s ex-interpreter? 

Former Senator Bob Menendez given (below guidelines range) sentence of 11 years in prison

As reported in this CNN piece, "[f]ormer New Jersey Democratic Sen. Bob Menendez was sentenced Wednesday to 11 years in prison following his conviction on bribery and corruption charges after taking cash, a Mercedes Benz and gold bars as bribes in exchange for helping three businessmen and the Egyptian government."  Here is more:

“The public cannot be led to the belief that you can get away with bribery, fraud and betrayal,” said District Judge Sidney Stein. “I don’t know what led you to this – greed was certainly part of it,” Stein added. “But that can’t be it, I don’t think that explains everything. Hubris was part of it, I don’t know. You’ll have to try to figure that out yourself over time.”

Menendez teared up as he spoke in court. “You have before you a chastened man,” he told the judge. “Other than family, I have lost everything I ever cared about,” he added. “For someone who spent his entire life in public service, every day I’m awake is a punishment.”

But outside the court, Menendez railed against the prosecutors who brought the case and, while he didn’t publicly ask President Donald Trump for a pardon, appealed to the White House. “Only in the Southern District of New York would prosecutors allow a witness to walk away from over 10 criminal charges, including defrauding the United States government so that they can get him to lie on the stand. Welcome to the Southern District of New York, the wild west of political prosecutions,” Menendez said. “This process is political and it’s corrupted to the core,” he added. “I hope President Trump cleans up the cesspool and restores the integrity to the system.”...

Two others involved were also sentenced Wednesday. Real estate developer Fred Daibes was sentenced to seven years in prison while Wael Hana, who runs a halal certification business, received a sentence of eight years. Jose Uribe, who pleaded guilty and testified at trial against the three men, will be sentenced later this year.

Prosecutors with the US attorney’s office in Manhattan asked Stein to sentence Menendez to “at least 15 years” in prison and order him to pay millions of dollars in forfeiture and fines “to provide just punishment for this extraordinary abuse of power and betrayal of public trust.”...

The 71-year-old former lawmaker, who had adamantly maintained his innocence, submitted more than 100 letters of support, including from the former president of Cyprus, local New Jersey politicians, religious figures, and constituents. “We respectfully submit that, notwithstanding his conviction, Bob is deserving of mercy because of the penalties already imposed, his age, and the lack of a compelling need to impose a custodial sentence,” his lawyers wrote to the judge. “Until this conviction marred his reputation, his career and life has been celebrated mainly for his work on behalf of the powerless and downtrodden,” they added.

In this prior post following this convictions, I asked whether Senator Menendez was facing a "de facto life sentence."  I believe his guideline range was 20+ years, so he was certainly facing a recommended prison term than could have led to a de facto life sentence for someone aged 71.  But with an actual sentence of "just" 11 years, and with various potential good time and earned time credits available, Menendez could be out before he hits 80.  (And if his appeals to Prez Trump find a sympathetic ear, perhaps much sooner.) 

Prior related posts:

• Is Senator Bob Menendez now facing a de facto life sentence after being convicted by a jury on all 16 federal corruption counts? 
• Facing guidelines recommending decades in prison, former Senator Menendez requests "sentence that relies heavily on alternatives to incarceration"

The process is the punishment: Donald Trump receives sentence of "unconditional discharge" in New York state prosecution

I have just finished listening to today's hearing as part of the state court sentencing in Trump v. New York, at the end of which he received the expected sentence of "unconditional discharge."  The event was full of interesting elements and ironies (eg, Trump was given the sentence recommended by prosecution, and now can move forward with appeals).   If time and energy permits in the coming weeks, I may turn to the Sentencing Matters Substack for some longer commentary/reflection on this historic event. 

For now, I am just going to note that sentence imposed got me thinking about the title of a famous 1979 criminal justice book by Malcolm Feeley, "The Process is the Punishment: Handling Cases in a Lower Criminal Court."  One big theme of the book, as put in this linked summary, is that "the real costs to those accused of misdemeanors and lesser felonies are not the fines and prison sentences meted out by the court, but the costs incurred before the case even comes before the judge."  That theme came to mind when Trump began his statement to the court today by stating "This has been a very terrible experience."  I suspect that statement resonates with so many criminal defendants and their friends and family, and maybe even more than a few judges and prosecutors.   

Judge Merchan upholds Donand Trump's NY state convictions, suggests he will impose sentence of "unconditional discharge" next week

As reported in this AP piece, "a judge Friday set President-elect Donald Trump’s sentencing in his hush money criminal case for Jan. 10 — little over a week before he’s due to return to the White House — but indicated he wouldn’t be jailed." Here is more:

Manhattan Judge Juan M. Merchan, who presided over Trump’s trial, signaled in a written decision that he’d sentence the former and future president to what’s known as an unconditional discharge, in which a conviction stands but the case is closed without jail time, a fine or probation. Trump can appear virtually for sentencing, if he chooses.

Rejecting Trump’s push to dismiss the verdict and throw out the case on presidential immunity grounds and because of his impending second term, Merchan wrote that only “bringing finality to this matter” would serve the interests of justice.

He said he sought to balance Trump’s ability to govern, “unencumbered” by the case, against other interests: the U.S. Supreme Court’s July ruling on presidential immunity and the public’s expectation “that all are equal and no one is above the law,” and the importance of respecting a jury verdict. “This court is simply not persuaded that the first factor outweighs the others at this stage of the proceeding,” Merchan wrote in an 18-page decision.

Judge Merchan's full 18-page ruling, which is available at this link, is primarily concerned with rejecting the defense team's various arguments for dismissing all charges. As the very end, here is is how he explains his sentencing thoughts at the end of the decision:

While this Cout as a matter of law must not make any determination on sentencing prior to giving the parties and Defendant an opportunity to be heard, it seems proper at this juncture to make known the Court's inclination to not impose any sentence of incarcetation, a sentence authorized by the conviction but one the People concede they no longer view as a practicable recommendation.  As such, in balancing the aforementioned considerations in coniunction with the undetlying concerns of the Presidential Immunity doctrine, a sentence of an unconditional discharge appears to be the most viable solution to ensure finality and allow Defendant to pursue his appellate options.  Further, to assuage the Defendant's concerns regarding the mental and physical demands during this transition period as well as the considerations set forth in the 2000 OLC Memorandum, this Court will permit Defendant to exercise his right to appear virtually for this proceeding, if he so chooses.  People v. Reyes,72 Misc 3d 1133 [Sup Ct New York County 2011].

Facing guidelines recommending decades in prison, former Senator Menendez requests "sentence that relies heavily on alternatives to incarceration"

As reported in this New York Times piece, weeks "before Robert Menendez, New Jersey’s disgraced former U.S. senator, is scheduled to be sentenced for corruption, his lawyers submitted an emotion-laden appeal for leniency based on what they depicted as Mr. Menendez’s hardscrabble upbringing, life of service and devotion to family."  Here is more about the sentencing filing:

As they did during Mr. Menendez’s two-month bribery trial in Manhattan, [his lawyers] suggested that their client’s greatest failing was being led astray by a conniving wife. Nadine Menendez, the former senator’s wife, was charged with her husband with conspiring to trade his political influence for bribes of cash, gold bars and a Mercedes-Benz convertible. Her trial is expected to start next month....

“The evidence showed that Senator Menendez was unaware of activities that Nadine was undertaking, including the receipt and sale of gold bars by Nadine, and cash she stored in her locked closet and her safe deposit box,” the lawyers wrote in their filing.

And in a letter of support also filed on Thursday, Mr. Menendez’s daughter, Alicia Menendez, a high-profile anchor on the cable news network MSNBC, hinted at the sacrifices her father continued to make for his wife, who was being treated for breast cancer....

Her letter is among more than 120 filed on behalf of Mr. Menendez, part of an attempt to justify a prison term far shorter than the 12 years recommended by the court’s probation department. The U.S. attorney’s office for the Southern District of New York, which prosecuted Mr. Menendez, is expected to disclose the government’s sentencing recommendation in the coming weeks....

In Thursday’s filing, the former senator’s lawyers argued that the probation department’s recommendation of a 12-year prison term was “draconian — likely a life and death sentence for someone of Bob’s age and condition.” [The lawyers] suggested that the guidelines instead merited a sentence of no more than 27 months — and even that, they wrote, was too long. They urged Judge Stein to consider a period of imprisonment of less than 27 months paired with “at least two years’ rigorous community service.”

“He is certain never to commit future offenses,” the lawyers wrote about Mr. Menendez. “And his current state — stripped of office and living under a permanent shadow of disgrace and mockery — are more than sufficient to reflect the seriousness of the offenses and to promote respect for the law.”

The full 52-page sentencing filing is available at this link, and concludes with this paragraph:

For the foregoing reasons, the sentencing factors set out in Section 3553(a), as applied to the circumstances of this defendant and case, justify a substantially below-Guidelines sentence that credits Senator Menendez’s lifetime of good deeds and good character, his low likelihood of offending in the future, and the punishment he has already sustained due to his conviction.  As urged by a friend and former member of the Puerto Rican Senate Roberto L. Prats, “please consider that you are sentencing a good man who devoted his entire professional career to serving others. In doing so, he touched the heart and soul of many citizens, me included, asking for nothing in return.” Ex. U (Letter submitted by Roberto L. Prats, Esq.).  We respectfully submit that the Court should impose a sentence that relies heavily on alternatives to incarceration, as such a sentence is sufficient but not greater than necessary to accomplish the purposes of sentencing under 18 U.S.C. §3553(a).

Supreme Court perhaps poised to curtail reach of federal fraud statutes yet again

The Supreme Court heard oral argument yesterday in Kousisis v. US, which presented this question to the Justices as articulated in the petitioner's brief: "Whether a scheme to induce a transaction in property through deception, but which contemplates no harm to any property interest, constitutes a scheme to defraud under the federal wire fraud statute, 18 U.S.C. § 1343."  Though I have not listened to the full oral argument yet, this Washington Post account suggests Kousisis could become another case in which SCOTUS reigns in federal fraud prosecutions:

The Supreme Court on Monday appeared divided over whether to uphold the conviction of a government contractor found guilty of defrauding a state transportation program intended to promote diversity, with several conservative justices again expressing concern over how federal prosecutors combat white-collar fraud.

Chief Justice John G. Roberts Jr. suggested that such crimes were better handled by state prosecutors. Justice Neil M. Gorsuch worried that the federal government’s approach was so broad it could allow, hypothetically, for the prosecution of a babysitter for misleading an employer about how she planned to spend her wages. The court’s eventual ruling in the contracting case could affect how federal prosecutors pursue other fraud cases.

The justices were reviewing the case of Alpha Painting & Construction and a project manager, Stamatios Kousisis, who was convicted of fraud in 2018 and sentenced to 70 months in prison for obtaining a multimillion-dollar contract under false pretenses.  The company won a contract with the Pennsylvania Department of Transportation to make repairs in Philadelphia to a Schuylkill River bridge and to the 30th Street Train Station that was contingent on the company teaming up with a disadvantaged business for a small percentage of the work to increase diversity in contracting. But according to court filings and the defendant’s admissions, the minority contractor did not do any work on the projects or supply materials. Instead, the minority firm acted as a pass-through.  The company submitted fake documentation to the government as part of the scheme, the filings state.

Among the questions for the justices in the case known as Kousisis v. U.S. is whether the company’s deceit rises to the level of wire fraud and just how broadly prosecutors can use that criminal statute to obtain a fraud conviction....

The Supreme Court has repeatedly expressed skepticism of federal prosecutions for too broadly applying criminal statutes to combat public corruption and other white-collar crimes. Last year, the court unanimously overturned the fraud conviction of business executive Louis Ciminelli and others who relied on inside information to win a $750 million development contract as part of former New York governor Andrew M. Cuomo (D)’s Buffalo Billion revitalization project. In 2020, a unanimous court overturned the convictions of two allies of former New Jersey governor Chris Christie (R) who plotted to cause traffic snarls in a town leading to the George Washington Bridge to punish one of the governor’s rivals.

Justice Samuel A. Alito Jr. suggested Monday that those rulings had sent a signal that “the court really doesn’t like the federalization of white-collar prosecutions and wants that to be done in state court and is really hostile to this whole enterprise.” Roberts echoed those concerns when he said “a lot of these things could be dealt with under state law, and you don’t have to federalize every jot and tittle in a large contract? And that it’s a matter of concern that we’ve expressed in many precedents.”

Deputy solicitor general Eric J. Feigin said Congress intentionally crafted the statute to give prosecutors latitude to pursue fraud cases. “It wrote them broadly because frauds are very inventive. There are any number of ways you can defraud people,” Feigin said. He warned that reversing the conviction in this case would make it harder for the government to go after those who defraud programs aimed at helping veterans or charity groups.

During the discussion of the babysitter hypothetical on Monday, Gorsuch and Justice Brett M. Kavanaugh got the government’s lawyer to concede that under its theory, a babysitter could be prosecuted for fraud if she knew she got the job after telling the family she would use the money for college tuition, but instead blew it all on a trip to Cancún.

While Feigin acknowledged the hypothetical babysitter could be charged, he added, “I think the sentencing guidelines would be pretty low.”

“That’s comforting,” Gorsuch quipped.

George Santos, AG Garland's charging memo, Pam Bondi, oh my

My post title not only reflects my Ozian mood, but also my effort to get extra attention for this last banger post by Jonathan Wroblewski over at the Sentencing Matters substack.  The post lurks under the sly simple query in its title: "What Ever Happened to Attorney General Garland’s Charging and Sentencing Policy?".  What follow is a kittle something for everyone at this particular moment of Justice Department reflection, especially as it relates to charging/plea practices and mandatory minimums.  I highly recommend the post in full, and here are just a few tastes: 

The fact that the U.S. Attorney insisted on [George] Santos pleading guilty to a charge carrying a mandatory minimum imprisonment sentence – and that he proudly proclaimed it publicly – was a bit puzzling, to me anyway. You see at the beginning of the Biden Administration, my job in the bureaucracy was to lead a Department working group that examined a whole host of sentencing and corrections policies and recommended changes to many of those policies for the new Administration....

As part of that work, the working group teed up for Attorney General Merrick Garland a new charging policy, actually several different drafts. And after many months of deliberation, in December 2022, Attorney General Garland issued a new policy. If you are not familiar with it, you can read it for yourself here. Out in the open for all to see. It told federal prosecutors not to charge statutes carrying mandatory minimum imprisonment terms except in limited circumstances....

Of course, we know why the U.S. Attorney charged the aggravated identity theft counts, and we know why he insisted that one of those counts be part of the plea agreement. The U.S. Attorney stood up at a podium and told us why. He wanted to be certain that George Santos would spend at least two years in prison. He wanted to take some sentencing options out of the hands of the presiding judge....

Of course, now, with the election of President Trump and the soon-to-be-nomination of Matt Gaetz Pam Bondi to be Attorney General, the policy ritual [for developing a new DOJ charging memo] is sure to begin again. Maybe seeing his friend and sex party companion charged with child sex trafficking, a charge carrying a mandatory minimum term of imprisonment, will lead Gaetz to think twice before reinstating the Sessions’ memo. Notably, back in 2018, the year President Trump signed the First Step Act into law, Bondi led a bipartisan group of 38 state attorneys general supporting criminal justice reform in the federal prison system. So maybe she’ll think twice before reinstating the Sessions’ memo. We’ll see. And maybe Trump will pardon George Santos. I hear there’s still an opening for several Assistant Attorneys General.

One last point – the Garland memo also made a promise –

The Department will develop and implement a software program that enables real-time, trackable reporting by districts and litigating divisions of all charges brought by the Department that include mandatory minimum sentences. Until that time, each United States Attorney’s Office and litigating division must report semi-annually to the Executive Office for United States Attorneys the number and percentage of charging documents and plea agreements in which it has included mandatory minimum charges.

The memo has been in place for about two years now. I don’t recall seeing any data from the Department on the implementation of the new policy. Have you? Did the Department ever develop and implement a software program that enables real-time, trackable reporting by districts and litigating divisions of all charges brought by the Department that include mandatory minimum sentences? Did it ever ask each United States Attorney’s Office and litigating division to report semi-annually to the Executive Office for United States Attorneys the number and percentage of charging documents and plea agreements in which it has included mandatory minimum charges?

"How Does Judges' Personal Exposure to Financial Fraud Affect White-Collar Sentencing?"

The title of this post is the title of this new paper now available via SSRN authored by Trung Nguyen, Aneesh Raghunandan and Alexandra Scherf. Here is its abstract:

We study whether federal judges' personal exposure to financial fraud affects their professional behavior, in the form of sentencing outcomes in white-collar cases.  Following the methodology outlined in our registered report, we construct a novel measure of financial fraud exposure based on judges' direct shareholdings in firms that commit financial fraud. Using this measure, we exploit the random assignment of cases to judges to examine whether judges exposed to fraud in one firm (i) are less likely to rule in favor of defendants in white-collar cases involving other firms and (ii) less likely to grant favorable pre-trial motions to defendants.  We find minimal evidence in support of either (i) or (ii), concluding that for all but the most serious frauds, judges are unlikely to let their personal victimhood experience affect their professional sentencing behavior with respect to related cases.  Our study broadens our understanding of the spillover effects of financial fraud enforcement and contributes to the literature on how judges' personal experiences can shape judicial decision-making.

Thanks to cooperation, former FTX executive avoids prison time even though Guidelines recommended LWOP

As reported in this CNBC article, "[f]ormer FTX executive Nishad Singh was sentenced to time served and three years of supervised release on Wednesday, becoming the fourth ex-employee of the collapsed crypto exchange to be punished. Singh was also ordered to forfeit $11 billion."  Here is more:

Singh faced a maximum sentence of 75 years but New York Judge Lewis Kaplan noted his cooperation with the government as “remarkable” and said he was entirely persuaded that Singh’s involvement with the fraud was far more limited than that of FTX founder Sam Bankman-Fried or Caroline Ellison, the former CEO of sister hedge fund Alameda Research.

Ellison was the star witness in the prosecution of Bankman-Fried and recently received a two-year prison sentence.

Singh, who was FTX’s head of engineering, pleaded guilty early last year to six criminal charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws.

On Wednesday, Singh delivered a statement to the Court and said in a soft voice that he had strayed from his values and didn’t expect forgiveness. He said that assisting in the government’s investigation gave him purpose....

FTX spiraled into bankruptcy in Nov. 2022, after the crypto exchange couldn’t meet customers’ withdrawal demands and allegedly stole $8 billion in client funds. In March, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion....

Prosecutors noted that they met with Singh on at least 24 occasions for multiple hours and that he demonstrated “earnest remorse and eagerness to assist,” as well as “brought to the Government’s attention criminal conduct that the Government was not aware of and, in some cases, may have never discovered but for Singh’s cooperation.”

Nicolas Roos, one of the prosecutors in the trial, noted that the campaign finance scheme was “totally unknown” by the government and that Singh “exclusively brought” details of the arrangement to the government....  Roos told Judge Kaplan that leniency “would send an important message.” In Kaplan’s reading of the sentencing, he told the defendant, “You did the right thing.”

Notably, this report on Singh's sentencing makes no mention of his recommended federal sentencing guideline range, no doubt because nobody gave it any mind.  But, as this government sentencing filing noted, for Singh, the "Probation Office calculate[d] the otherwise applicable Guidelines sentence to be life imprisonment, based on an offense level of 43" because of the amount of money involved in the FTX frauds.  Even for someone with no criminal history, that offense level means a recommended guideline sentence of life in prison (and the federal system has no parole).  To move from a recommendation of life in prison without parole to an actual sentence without any prison time is the sentencing magic that cooperating with the government can conjure for some.   

A few prior related posts:

• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
• Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds
• For executive connected to FTX collapse (and Sam Bankman-Fried's girlfriend), federal guidelines call for LWOP, but probation office recommends time served
• Feds praise Caroline Ellison's cooperation while refusing to suggest any specific sentence when federal guidelines recommend LWOP
• Caroline Ellison sentenced to two years in prison for her role in FTX collapse 

A deep dive into sentencing patterns for NY felony crime of falsifying business records

This week the New York Times published this lengthy article, headlined "Will Trump Get Jail Time? We Looked at Similar Cases to Find Out," while provides some statistical context regarding sentences in New York for the crimes that Donald Trump will be sentenced for next month.  Here are excerpts from the piece:

The former president’s unruly behavior at the New York trial makes him a candidate for jail time, as does his felony crime of falsifying business records: Over the past decade in Manhattan, more than a third of these convictions resulted in defendants spending time behind bars, The Times’s examination found. Across New York State, the proportion is even higher — about 42 percent of those convictions led to jail or prison time....

Over the past decade or so, the most likely punishment for someone in New York State convicted on a top charge of felony falsification of business records was jail or prison time, according to data from the New York State Division of Criminal Justice Services. The data shows that 204 people ended up behind bars for that crime, while 174 received probation and no jail time.

The Times review of false records convictions in Manhattan alone — which was based on data from state and local agencies and verified by case files retrieved from the clerk’s office — similarly supports the notion that Mr. Trump could spend a few weeks or months in jail.

The Times found 30 cases in Manhattan since 2014 in which a person was convicted and sentenced on a top charge of felony falsification of business records. Of those cases, only five resulted in probation and no jail time, while 11 involved incarceration.

Defendants in nine of the 11 cases were first-time felony offenders like Mr. Trump and received sentences between one week and 364 days in jail, with the most frequent jail sentence being six months. The other two defendants, both of whom had been previously convicted of felonies, received more than a year in prison.

All but one of the other defendants received a so-called conditional discharge, a sentence that allows them to avoid probation or jail if they follow certain conditions, such as maintaining employment or paying restitution. The remaining man received only community service and a fine.

Caroline Ellison sentenced to two years in prison for her role in FTX collapse

As reported in this CNBC article, "Caroline Ellison, the star witness in the prosecution of her former boyfriend, FTX founder Sam Bankman-Fried, was sentenced Tuesday in New York federal court to two years in prison and ordered to forfeit $11 billion for her role in the massive fraud and conspiracy that doomed the cryptocurrency exchange once valued at $32 billion."  Here is more about her sentencing:

The prison term was significantly stiffer than the recommendation by the federal Probation Department that Judge Lewis Kaplan sentence Ellison to three years of supervised release, with no time at all behind bars.

Defense lawyers also had requested a no-prison sentence for Ellison, who had run the hedge fund Alameda Research, which had received much of the $8 billion in customer funds looted by Bankman-Fried from FTX.  The stolen money was used for Alameda’s trading operation and other purposes.

While Kaplan praised Ellison for her extensive cooperation with prosecutors — which led to the conviction of Bankman-Fried — the judge said her criminal sentence needed to deter other potential bad actors from committing fraud.

The judge said that the FTX case is probably the greatest financial fraud perpetrated in the history of the United States, and because of that a “literal get-out-of-jail-free card I can’t agree to,” Kaplan said in U.S. District Court in Manhattan, where Ellison’s parents and two sisters looked on from the courtroom’s gallery.

“I’ve seen a lot of cooperators over the years and I’ve never seen one quite like Miss Ellison,” said Kaplan, who also said he believed that Ellison was genuinely remorseful for her crimes and that her cooperation carried a steep price for her emotionally....

Ellison read from a statement in a shaky voice while crying at times as she apologized to the people she had hurt and said she was deeply ashamed. She also said she was sorry for being brave enough to walk away from FTX and Bankman-Fried....

Ellison reached a plea deal with prosecutors in December 2022, a month after FTX spiraled into bankruptcy. She pleaded guilty to conspiracy and financial fraud charges. Bankman-Fried, in contrast, chose to stand trial and was convicted of all seven criminal fraud charges against him in the same courthouse where she was sentenced.

He was sentenced to 25 years in prison in March and also was ordered to pay $11 billion in forfeiture by Kaplan. Bankman-Fried since then has appealed his conviction, and requested a new trial and a different judge, arguing that Kaplan was biased against him.

Two other former FTX executives, Gary Wang and Nishad Singh, are scheduled to be sentenced later this year. Like Ellison, they pleaded guilty instead of standing trial....

On Tuesday, before sentencing Ellison, Kaplan contrasted her conduct after she was charged with that of Bankman-Fried.  While the FTX founder had denied criminal conduct, she cooperated with authorities, Kaplan noted.  “It didn’t work out so well” for Bankman-Fried, in part because of Ellison’s cooperation, the judge said.

Both Bankman-Fried and Ellison had faced the same statutory maximum sentence of about 110 years in prison for their crimes. But defendants in criminal cases who cooperate with prosecutors instead of fighting the charges particularly in white-collar cases such as FTX, often receive leniency when they are sentenced.

A few prior related posts:

• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
• Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds
• For executive connected to FTX collapse (and Sam Bankman-Fried's girlfriend), federal guidelines call for LWOP, but probation office recommends time served
• Feds praise Caroline Ellison's cooperation while refusing to suggest any specific sentence when federal guidelines recommend LWOP

Feds praise Caroline Ellison's cooperation while refusing to suggest any specific sentence when federal guidelines recommend LWOP

In this recent post, I flagged the upcoming sentencing of Caroline Ellison as an interesting high-profile case in which the federal sentencing guidelines call for an LWOP sentence, but the presentencing report recommended only "time served with three years of supervised release."   Yesterday the feds weighed in without a specific sentencing recommendation, but signaling her cooperation called for quite a sentencing reward.  This New York Times piece provides these details:

Caroline Ellison, a close colleague of the disgraced cryptocurrency mogul Sam Bankman-Fried, provided “extraordinary cooperation” to the government, federal prosecutors said on Tuesday, signaling that she should receive a lenient sentence for her role in the sweeping fraud that led to the collapse of the FTX crypto exchange.

Ms. Ellison, 29, who was also Mr. Bankman-Fried’s on-and-off girlfriend, pleaded guilty to fraud shortly after FTX collapsed in November 2022, alongside two other members of his inner circle. In a court filing this month, Ms. Ellison’s defense lawyers asked the judge overseeing the case, Lewis A. Kaplan, to sentence her to three years of supervised release, with no prison time.

In the government’s filing on Tuesday, prosecutors did not recommend a specific sentence to the judge but pointed out that her cooperation was “not only substantial, but exemplary.” Ms. Ellison was the star witness at Mr. Bankman-Fried’s trial last fall in federal court, where she spent nearly three days on the stand.  She described an incriminating spreadsheet that Mr. Bankman-Fried had used to mislead business partners and recounted the final days of FTX, holding back tears as she delivered some of the trial’s most emotional testimony.

Mr. Bankman-Fried was convicted of a sophisticated fraud that siphoned $8 billion from customer accounts to finance venture investments, political donations and other spending. He was sentenced to 25 years in prison in March.  Judge Kaplan is set to decide Ms. Ellison’s sentence in federal court in Manhattan on Sept. 24.

“In her many meetings with the government, Ellison approached her cooperation with remarkable candor, remorse and seriousness,” the prosecutors wrote in their 14-page memo to Judge Kaplan.  “And she persevered despite harsh media and public scrutiny and Bankman-Fried’s efforts to publicly weaponize her personal writings to discredit and intimidate her.”...

In their sentencing memo, Ms. Ellison’s lawyers detailed the often-stormy romantic relationship between their client and Mr. Bankman-Fried.  For years, they wrote, Ms. Ellison was effectively in his thrall, living in a social “bubble” centered on Mr. Bankman-Fried. At his suggestion, Ms. Ellison started taking Adderall so that she could work longer hours, the memo said. Mr. Bankman-Fried initially “suggested their liaison would develop into a full relationship,” the lawyers wrote.  “But after a few weeks, he would ‘ghost’ Caroline without explanation.”...

Since pleading guilty, Ms. Ellison has struggled to find paying work, according to her lawyers’ memo. She was turned down for a job with a charity that promoted math education for young women.  At one point, she secured a position helping low-income families prepare tax returns; a couple of weeks later, she was asked to leave after the employer realized who she was, according to a letter from her aunt that was filed with the sentencing memo.

Ms. Ellison has volunteered for more than 700 hours with community organizations, teaching adult literacy classes and fostering rescue dogs, the memo said.  She is working with her parents, who both teach at the Massachusetts Institute of Technology, on a math enrichment textbook for advanced high school students, and has written a novella set in Edwardian England.

A few prior related posts:

• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
• Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds
• For executive connected to FTX collapse (and Sam Bankman-Fried's girlfriend), federal guidelines call for LWOP, but probation office recommends time served

For executive connected to FTX collapse (and Sam Bankman-Fried's girlfriend), federal guidelines call for LWOP, but probation office recommends time served

If anyone wants a good example of the federal sentencing guidelines not doing an effective job of guiding a federal sentencing judge, consider the specifics of the upcoming high-profile sentencing of Caroline Ellison.  This CNBC story about a sentencing filing provides some of the background, as well as helpful links to some key court documents:

Lawyers for Caroline Ellison, the star witness in the prosecution of FTX founder Sam Bankman-Fried, are recommending no prison time for their client’s role in the implosion of the crypto empire that was run by her former boss and ex-boyfriend.

In a court filing Tuesday night, the attorneys said that, at most, Ellison should be sentenced to time served and supervised release because of her swift return to the U.S. from FTX’s Bahamas headquarters in 2022 and her choice to voluntarily cooperate with the U.S. attorney’s office and financial regulators in helping them understand what went wrong at FTX and sister hedge fund Alameda Research. 

Judge Lewis Kaplan, who presided over Bankman-Fried’s case, cited Ellison’s testimony when he decided in March to sentence the FTX founder to 25 years behind bars.  Ellison, who ran Alameda Research, agreed to a plea deal in December 2022, a month after FTX spiraled into bankruptcy. Unlike Bankman-Fried, who was convicted of all seven criminal fraud charges against him, Ellison pleaded guilty to conspiracy and financial fraud charges, rather than go to trial.

The Tuesday filing also refers to the recommendation of the court’s Probation Department that Ellison be given a sentence of “time served with three years of supervised release” as a credit to her “extraordinary cooperation with the government” and “her otherwise unblemished record.”  Lawyers added that the department’s presentence report, which referenced numerous character testimonials speaking to Ellison’s ethics and integrity, also recommended that she not be fined.  “Caroline poses no risk of recidivism and presents no threat to public safety,” the filing says. “It would therefore promote respect for the law to grant leniency in recognition of Caroline’s early disclosure of the crimes, her unmitigated acceptance of responsibility for them, and — most importantly — her extensive cooperation with the government.”

In the filing, FTX CEO John Ray, who has been guiding the crypto firm through bankruptcy proceedings, describes Ellison’s cooperation as “valuable” in helping his team protect and preserve “hundreds of millions of dollars” in assets.  He added that she has worked with his advisors to provide information regarding private keys to cryptocurrency wallets that contain “estate assets, DeFi positions, FTX exchange internal account information, the use of third-party exchanges for pre-petition trading, and pre-petition auditing practices.”

The 67-page document describe large swaths of Ellison’s life, starting from her earliest days in Boston and stretching into her protracted and troubled romance with Bankman-Fried. In that time, she “moved around the globe at his direction, first to Hong Kong and later the Bahamas,” and “worked long, stressful, Adderall-fueled hours,” the filing says.  Bankman-Fried forced Ellison into a sort-of isolation, culminating in her moral compass being “warped,” the lawyers say. At his direction, Ellison helped “steal billions,” all while living “in dread, knowing that a disastrous collapse was likely, but fearing that disentangling herself would only hasten that collapse.”

“Bankman-Fried convinced her to stay, telling her she was essential to the survival of the business, and that he loved her,” all “while also perversely demonstrating that he considered her not good enough to be seen in public with him at high-profile events,” the filing says.

Though I have only had a chance to briefly scan Ellison's sentencing memorandum, I noticed it included no objection to the calculated guideline range, which produced "the Guidelines sentence of life imprisonment, reduced to the statutory maximum of 1,320 months" (110 years).  As guideline mavens know, the massive "loss" in this case drove Ellison’s guideline calculation to produce a recommended LWOP sentence; as federal sentencing mavens know, pleading guilty and providing "extraordinary cooperation with the government" is one critical way a defendant can seek to get a judge to ignore the guidelines at sentencing.

It will be interesting to see if the feds ask for any prison time here, but I am quite sure they will not be urging Judge Kaplan to follow the guidelines.  After all, the feds urged a sentence well below LWOP even for Sam Bankman-Fried even though his guideline calculation was literally "off the grid" and had the highest calculated offense level I had ever seen.  White-collar prosecutors and defense attorneys have long known, of course, that guideline calculations in high-dollar, white-collar cases often amount to a kind of Kabuki theater amounting to little of real substance.  That reality is surely on display, yet again, in the FTX sentencings.

Some prior related posts about SBF's sentencing

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 
• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
• Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds

"Recidivist Organizational Offenders and the Organizational Sentencing Guidelines"

The title of this post is the title of this new article now available via SSRN authored by Kaleb Byars. Here is its abstract:

Despite recent Congressional hearings and public attention, the question of how to fairly and efficiently punish recidivist organizational offenders remains unresolved.  Any discussion regarding the most optimal legal response to recidivist organizational crime is incomplete without a solution accounting for the use of organizational deferred prosecution agreements ("DPAs") and non-prosecution agreements ("NPAs").  These tools allow criminal defendants to resolve charges without sustaining convictions that attach to the defendants' criminal records, and they are used often in the organizational context.

This Article is the first to recognize that the federal sentencing scheme fails to promote deterrence and fairness in the context of organizational sentencing and is the first to offer a practical solution to this problem.  The federal sentencing scheme currently does not require an increase in an organizational defendant's sentence when the defendant previously executed DPAs or NPAs before its subsequent criminal conduct.  Yet the federal sentencing guidelines do require an increase in an individual defendant's sentence if the individual previously executed a DPA. Meanwhile, the existence of prior DPAs and NPAs is a hallmark of organizational recidivism that demonstrates an organization is more culpable than other organizational defendants.  Accordingly, this Article recommends that the Sentencing Commission amend the federal sentencing guidelines to require sentencing courts to increase organizations’ sentences based on prior DPAs and NPAs.  This Article offers specific amendments for consideration. Finally, until the sentencing guidelines are amended, sentencing courts can use tools already in place to begin imposing more fair organizational sentences.

On morning of scheduled federal trial, Hunter Biden attempts to enter an Alford plea

As reported here in the Washington Post, "President Joe Biden’s son Hunter tried to resolve his federal tax case Thursday as jury selection was about to begin, offering an Alford plea in which he maintains he is innocent but acknowledges that the prosecution’s evidence would likely result in a guilty verdict." Here is more:

Prosecutors objected to the proposal, which they had not been told of in advance.  U.S. District Judge Mark Scarsi is expected to decide this afternoon whether to adjourn the proceedings until Friday or give the two sides more time to come to agreement.

“I want to make crystal clear: the U.S. opposes an Alford plea ... Hunter Biden is not innocent, he is guilty," Leo Wise, an attorney working for special counsel David Weiss, told the judge. "We came to court to try this case.”

Biden’s attorney, Abbe Lowell, noted that Alford pleas are an option available to all criminal defendants — even though such plea agreements are relatively rare. “All over the U.S. people do this,” Lowell said.  "It’s not that [Hunter Biden] seeks special treatment, but that he gets the same rights as everyone who is charged.”

Weiss charged Biden last year on nine tax-related counts, accusing him of failing to pay at least $1.4 million in federal taxes from 2016 through 2019.  Three charges were felonies and six were misdemeanors.  They include failing to file and pay taxes, tax evasion and filing false tax returns. Weiss separately charged Biden last year with three felony gun counts in Delaware.  A jury convicted Biden on all three charges in June, and he is scheduled for sentencing in November.

The indictments came after a lengthy investigation into Biden’s business dealings while his father was vice president, which Republican lawmakers and former president Donald Trump have tried to use as evidence of corruption within the Biden family. No evidence has surfaced publicly to suggest any wrongdoing by Joe Biden.

The younger Biden has said he has undergone treatment for addiction and is no longer using drugs. While his addiction to crack cocaine was a central theme of his gun trial, the Los Angeles case is expected to delve into Biden’s lavish spending and sex life during that period — much of which he chronicled in his 2021 memoir. Among the accusations laid out in the nine-count indictment is that Biden wrote off money he paid sex workers as business expenses on his tax forms.

An Alford plea, named after a case North Carolina v. Alford, is a way for a defendant to register a formal admission of guilt toward charges they are facing while simultaneously maintaining their innocence. United States attorneys are only able to consent to Alford pleas “in the most unusual of circumstances” and consult with top officials at the Department of Justice before doing so, according to federal prosecution guidelines....

The president, who has made clear he thinks the criminal charges against his son are politically motivated, has said emphatically that he does not plan to pardon Hunter Biden’s criminal convictions. Some of Hunter Biden’s allies hope he will change his mind, however, and issue a pardon after the November election.

Just as Hunter Biden was beginning the day in court, the president was leaving the White House to travel to La Crosse, Wis., for an event touting his administration’s economic policies. From Air Force One, White House press secretary Karine Jean-Pierre reiterated that the president would not pardon or commute Hunter Biden’s sentence. “No," she told reporters on Air Force One. "It is still very much a no.”

UPDATE: This Politico article reports that Hunter Biden's guilty plea was entered this afternoon, though it appears it was just a standard open plea to the charges rather than an Alford plea:

Hunter Biden pleaded guilty Thursday to tax evasion and other tax crimes in an 11th-hour about-face that surprised prosecutors as a trial was about to begin....

The only remaining question now is how much prison time, if any, Biden will face. Shortly after Biden entered his guilty plea, U.S. District Judge Mark Scarsi scheduled his sentencing on the tax charges for Dec. 16. Biden is scheduled to be sentenced in the gun case in November.

Biden faces up to 17 years in prison for the tax charges, though experts say lighter sentences in similar cases are more common. Scarsi will consider Biden’s admission of guilt when he sentences him....

The plea was not part of a plea deal, meaning prosecutors did not promise to recommend a reduced prison sentence....  After Scarsi questioned the Alford arrangement and signaled he might seek further legal arguments on whether he should accept it, Biden conferred with his lawyers and entered a straightforward guilty plea.

<P>As Scarsi questioned Biden about the plea in open court, the judge stressed that he still had the authority to hand down a hefty sentence.  “With regard to sentencing, there’s no guarantees. You understand that?” Scarsi, an appointee of Donald Trump, asked....

Biden is scheduled to be sentenced on Nov. 13 in the gun case, where federal sentencing guidelines recommend up to 21 months in prison, though Biden could receive much less or even no prison time at all.  In the tax case, prosecutors alleged that Biden earned more than $7 million during the years in question and later plotted to fraudulently lower the taxes he owed on that income by falsely labeling trips and other luxury purchases as business expenses. They said he used the money to fund a lavish lifestyle filled with drugs, strippers and sports cars.

US Sentencing Commission releases more updated "Quick Facts" publications on more economic offenses

The US Sentencing Commission is continuing to release new sets of its "Quick Facts" publications with updates drawing on the USSC's full fiscal year 2023 data. I have flagged these new updated Quick Facts in recent posts  here and here, and the USSC just this week released these additional "Quick Facts"  on additional economic offenses:

• NEW Tax Fraud (August 2024)
• NEW Health Care Fraud (August 2024)
• NEW Government Benefits Fraud (August 2024)
• NEW Credit Card and Other Financial Instrument Fraud (August 2024)

Lots of notable front page sentencing issues in next week's sentencing of Backpage

I have not closely followed the legal sagas that have surrounded the website Backpage, which was the huge classified advertising website shut down and seized by federal law enforcement in April 2018.  But next week the Backpage saga has a federal sentencing stage, and this Law360 piece provides a flavor for just some of the issues raised:

Prosecutors asked an Arizona federal judge Monday to sentence two former executives of the defunct classifieds service Backpage.com and the site's co-founder to 20 years in prison after they were found guilty of several counts over an alleged $500 million prostitution scheme.

In a sentencing memorandum, prosecutors said the crimes former executives Scott Spear and John Brunst and Backpage co-founder Michael Lacey were convicted of caused extraordinary harm and amounted to "one of the internet's largest and longest-running criminal empires."

Prosecutors say the website facilitated prostitution through ads. Spear and Brunst were convicted of multiple counts after a 28-day trial in November while two other executives were acquitted. Lacey was found guilty of one count of money laundering; the jury was deadlocked on dozens of other charges against him. The mixed verdict ended a sprawling case that saw its first trial end in a mistrial in 2021....

In April, U.S. District Judge Diane J. Humetewa rejected some of the jury's findings, tossing nearly three dozen transactional money laundering charges, as well as Travel Act charges against Lacey, but kept the rest of the verdict intact. Sentencing is scheduled for Aug. 27 and 28. Prosecutors said Monday they were "unaware of any mitigating circumstances" for the purposes of sentencing. Spear, Brunst and Lacey showed no remorse following their convictions, prosecutors said.... The prosecutors argued that victim impact statements submitted to the court don't fully encapsulate the harm Backpage inflicted, saying some trafficking victims were killed by perpetrators who found them on the site.

Lacey, Spear and Brunst all requested probation in their own sentencing memorandums filed Monday, arguing that they never intentionally broke the law. Lacey claimed that his only felony conviction was for a "financial crime that he purportedly committed upon the idea and advice of two credentialed lawyers, wherein all reporting rules were followed."....

Spear similarly said in his memorandum that his actions were in line with a law-abiding life.... Brunst said he was never employed by Backpage, but rather worked for Village Voice Media Holdings starting in 1992 and later at Medalist Holdings, a successor entity after VVMH sold its newspapers.

Over at Reason, the arguments surrounding one defendant get extra attention in a piece here headlined "Feds Seek 20-Year Sentence for Backpage Co-Founder Michael Lacey; It's an insane ask for someone convicted of just one nonviolent offense." Here is an excerpt:

Lacey was charged — along with other former Backpage executives — of using Backpage to knowingly facilitate prostitution, in violation of the U.S. Travel Act.  Two of the defendants were acquitted of all such offenses and two of the defendants were found guilty of some of them. But the jury could not reach a conclusion when it came to Lacey. U.S. District Judge Diane Humetewa found there was insufficient evidence to sustain most of the remaining 84 counts against him.

Now, prosecutors want the judge to simply act, for sentencing purposes, as if those charges are all true. Federal prosecutors are also putting Lacey on trial for these charges again — which means that if he is eventually convicted, he could wind up being sentenced twice for the same conduct.

This case and these defendants have many more notable elements, and I found reviewing some of the sentencing memoranda fascinating — eg, the government's memo reports that the PSR recommended 1080 months (90 years) for Spear, who is 73 years old.  Here, thanks to Law360, are the sentencing submissions:

•  US Memo
•  Spear Memo
•  Lacey Memo
•  Brunst Memo

You be the federal judge: what sentence for former US Rep George Santos after his plea to fraud and identity theft?

The remearkable saga of former US Congressman George Santos closed one chapter in the same manner as many federal criminal prosecutions, namely with a guilty plea to a few of many charged counts.  But what sentence should shape the next chapter of the Santos saga?  This press release from the U.S. Attorney's Office in the Eastern District of New York, headed "Former Congressman George Santos Pleads Guilty to Wire Fraud and Aggravated Identity Theft," provides all sorts of details about Santos's misdeeds and starts with these basics:

Santos Admits He Filed Fraudulent FEC Reports, Embezzled Funds from Campaign Donors, Charged Credit Cards Without Authorization, Stole Identities, Obtained Unemployment Benefits Through Fraud, and Lied in Report to the House of Representatives

Earlier today, in federal court in Central Islip, former Congressman George Anthony Devolder Santos pleaded guilty to committing wire fraud and aggravated identity theft.  The proceeding was held before United States District Judge Joanna Seybert.   When sentenced, Santos faces a minimum sentence of two years’ imprisonment and a maximum sentence of 22 years’ imprisonment. As part of the plea Santos will pay restitution of $373,749.97 and forfeiture of $205,002.97.  Santos was initially charged in May 2023, and a superseding indictment charging Santos with additional crimes was returned in October 2023.

This USA Today article provides some context and more sentencing details:

Former Rep. George Santos, R-N.Y., who was expelled from the House of Representatives after being indicted on 23 federal counts including fraud and misusing campaign funds, pleaded guilty Monday in federal court to two of the charges.

The Long Island Republican faces a mandatory two-year minimum sentence after pleading guilty to wire fraud and aggravated identity theft.  But Judge Joanna Seybert estimated the term could range from six to eight years behind bars when he is sentenced on Feb. 7, 2025.  Santos also agreed to pay nearly $374,000 in restitution and to forfeit $205,000.

Santos had faced trial in September on charges including laundering campaign funds to pay for his personal expenses, charging donors' credit cards without their consent, and receiving unemployment benefits while he was employed. "I deeply regret my conduct and the harm it has caused and accept full responsibility for my actions," Santos said in a shaky voice in court.

Prosecutors said Santos told the truth about his criminal schemes for what seemed like the first time since campaigning for Congress. “He admitted to lying, stealing and conning people,” U.S. Attorney Breon Peace said in a statement. “His flagrant and disgraceful conduct has been exposed and will be punished."...

"Moving forward, I am dedicated to making amends for the wrongs I have committed," Santos told reporters outside the courthouse. "This plea is not just an admission of guilt, it is an acknowledgment that I need to be held accountable, like any other American that breaks the law."

So, dear readers, Santos himself says he needs "to be held accountable." How would you punish him to hold him accountable?

Is Senator Bob Menendez now facing a de facto life sentence after being convicted by a jury on all 16 federal corruption counts?

The question in the title of this post is prompted by this news via Bloomberg Law: " US Senator Bob Menendez, the powerful New Jersey Democrat, was found guilty of corruption charges related to the FBI seizure of 13 gold bars, nearly $500,000 in cash and a Mercedes-Benz at his home.  Menendez was convicted on all 16 counts Tuesday after a two-month trial in New York, where prosecutors argued the lawmaker had sold his influence to protect businessmen and to promote Egypt’s interests."  Here is more: 

The government alleged Menendez’s wife, Nadine, was a go-between who collected bribes and set up meetings with the businessmen and Egyptian officials. She was also charged, but will face a later trial.

After the verdict was read out, one of Menendez’s lawyers patted the senator on the shoulder. The judge set a sentencing date for Oct. 29 for Menendez and his two co-defendants. Menendez is certain to appeal.

The three-term senator was the first member of Congress charged with being a public official acting as a foreign agent. In all, Menendez was convicted of charges including bribery, extortion, conspiracy, honest services wire fraud and obstruction of justice.

Menendez, the senior Hispanic lawmaker in Congress, saw his political support evaporate in Washington and New Jersey amid the publicity of the cash, gold and convertible seized by agents from his home in 2022. After his indictment, he resigned as chairman of the Senate Foreign Relations Committee. He could face expulsion from the Senate, where Democrats hold a 52-48 advantage.

The bribes began when Menendez, 70, started dating Nadine Arslanian in 2018, just after an earlier corruption trial against him ended in a hung jury, prosecutors said. They wed in 2020.  During the latest criminal trial, jurors held gold bars stashed in the Menendez house, heard about their tumultuous relationship, and watched a secret FBI video of the couple dining at a Morton’s steakhouse with an Egyptian intelligence official.

Menendez was tried with Fred Daibes, a real estate developer in Edgewater, New Jersey, and Wael Hana, who secured an Egyptian monopoly to certify US meat bound for Egypt as compliant with halal standards. Daibes and Hana also were convicted of bribery and wire fraud charges.  A third businessman, former insurance broker Jose Uribe, pleaded guilty and testified he bribed Arslanian with a Mercedes.

Prosecutors said Menendez corruptly helped Egypt secure US military aid and sensitive information; urged a US agriculture undersecretary to stop questioning Hana’s halal monopoly; weighed appointing a US attorney in New Jersey who would influence a 2018 fraud indictment of Daibes; contacted the New Jersey attorney general to disrupt New Jersey criminal probes of two people close to Uribe; and helped Daibes arrange financing from Qatari investment fund for a real estate project.

Menendez didn’t testify but denied wrongdoing. His lawyers said he took no bribes or official actions to advance any quid-pro-quo schemes. His attorney Adam Fee derided the US case as “painfully thin,” woven from “fantasy” speculation and misguided inferences.  “The prosecutors are going to continue to tell you, in excited tones, that Senator Menendez is a crook, is corrupt, took a bunch of bribes,” Fee said in his summation. “His actions were lawful, normal, and good for his constituents, and this country.”

Defense lawyers sought to defuse the explosive heart of the case — gold bars and cash stuffed in closets, boots, jackets, a safe and a shopping bag. Using fingerprints and DNA evidence, prosecutors traced $82,500 of cash-stuffed envelopes to Daibes.  Serial numbers on two one-kilogram gold bars, valued at about $60,000 each, matched those on a list Daibes kept. Daibes, who grew up in a Palestinian refugee camp, gave other kilogram bars to Nadine Menendez, who sold all but two before the FBI raid, the US said. Defense lawyers said she inherited gold bars from her Lebanese family, and there’s no proof the gold she sold came from Daibes.

Fee said Menendez’s Cuban immigrant parents hoarded cash, and that the senator routinely withdrew $400 for decades from a bank account. He also argued Daibes had been friends with Menendez for 30 years, and he gave gifts out of friendship, not corrupt intent.

Because I am not familiar with all the offense details, I am disinclined to guess the precise guideline range that Senator Menendez will be facing. But the basics suggest to me he might easily be looking at an offense level over 35, meaning a guideline range of perhaps at least 15-18 years. It will be quite interesting to see how this sentencing unfolds and whether the Senator gets bail pending the inevitable appeal.

SCOTUS grants cert to address fraudulent inducement theory of federal criminal fraud

As explained here at SCOTUSblog, the Justice via a new order list has filled in a bit more of its still light docket for next Term:

The justices on Monday morning added four new cases to their docket for the 2024-25 term. In a list of orders from the justices’ private conference last week, the court agreed to tackle issues ranging from the burden of proof for an employer hoping to rely on an exemption from the Fair Labor Standards Act to the pleading standards for cases under the Private Securities Litigation Reform Act.

One of the four cases taken up by SCOTUS today is a criminal fraud case: Kousisis v. US.  Here is how the cert petition in this case presented  the questions to the Court:

The circuits are split 6-5 on the validity of the fraudulent inducement theory of mail and wire fraud. The Questions Presented are:

Whether deception to induce a commercial exchange can constitute mail or wire fraud, even if inflicting economic harm on the alleged victim was not the object of the scheme.

Whether a sovereign’s statutory, regulatory, or policy interest is a property interest when compliance is a material term of payment for goods or services.

Whether all contract rights are “property.”

Some sentencing basics after former President Donald Trump's convictions on 34 felony New York counts

I am not an expert on New York sentencing law and practice, though I expect a whole lot of folks will soon be opining on these topics now that former President Donald Trump has been convicted by a jury on 34 New York felony counts.  This CBS News piece seems to review some sentencing basics pretty well:

Trump was convicted by the jury Thursday on 34 felony counts for falsifying business records to conceal a $130,000 payment to adult film star Stormy Daniels to buy her silence before the 2016 presidential election.  The jury in Manhattan returned a guilty verdict after a trial that stretched six weeks and featured more than 20 witnesses.

Each of the 34 felony charges carries up to a $5,000 fine and four-year prison sentence.  But whether Trump will go to prison is another question — one that's up to the judge at sentencing.  The judge set a July 11 date for sentencing following the jury's verdict on Thursday.

The timing is in line with similar white-collar felony cases, where sentencing often takes place anywhere from three to eight weeks after conviction, according to Dan Horwitz, a defense lawyer who formerly prosecuted white-collar cases for the Manhattan District Attorney's office.  The sentencing will happen four days before the start of the Republican National Convention.

The minimum sentence for falsifying business records in the first degree is zero, so Trump could receive probation or conditional discharge, a sentence of no jail or up to four years for each offense.  Trump would likely be ordered to serve the prison time concurrently for each count, so up to four years, total.

"The judge could sentence him to anything between zero and the max," Horwitz said. "So he could sentence him to a period of months in jail, he could sentence him to a period of weeks in jail, he could sentence him to a sentence where he is required, for example, to go to jail every weekend for a period of time and then serve the rest of the sentence on probation."

In an analysis of comparable cases brought by the Manhattan district attorney's office, Norm Eisen, who has written a book about Trump's 2020 election-related federal indictment and served as special counsel in the first impeachment of the former president, found that about 10% resulted in imprisonment.  But the circumstances surrounding the case make any across-the-board comparison difficult.

Trump could also be sentenced to home detention, where he would wear an ankle bracelet and be monitored rather than going to jail.  Horwitz suggested that a home detention sentence, which walks a middle ground between no punishment and a stint in state prison, might be the most likely outcome.  It would also satisfy Trump's unusual security and political situation.

A home detention sentence would also make it possible for Trump to continue campaigning — albeit virtually — with the ability to hold news conferences and remain active on social media....

There are a number of factors that the court can take into consideration for sentencing, including the nature and extent of the conduct, who was hurt, whether there are victims, and acceptance of responsibility, Horwitz said.  Trump has repeatedly denied any guilt in the case....

A defendant's conduct during the trial may also play a role, so Trump's repeated violation of Merchan's gag order may be a significant factor in his sentencing. During the trial, Trump was accused over a dozen times of violating a gag order preventing him from making public comments about likely witnesses, jurors, attorneys and court staff involved in the case.

Whatever Trump's formal sentence, he is certain to endure any number of formal and informal collateral consequences as a result of his convictions.  This Politico article flags an interesting one in its headline: "There’s a real possibility Trump can’t vote in November."

Though I suspect lots of folks may be eager to discuss lots of issues beyond the specifics of Trump's upcoming NY sentencing, I would be eager to hear as much discussion of sentencing law and practice as possible in the comments.  I say that in part because there are so many interesting and intricate sentencing issues that arise in this historic and controversial case.  For example, should state prosecutors assert that, and should Merchan consider, Trump's other alleged criminal behaviors as detailed in three other pending criminal indictments are aggravating factors calling for a more severe sentence?    

"Regressive White-Collar Crime"

The title of this post is the title of this new article authored by Stephanie Holmes Didwania available via SSRN. Here is its abstract:

Fraud is one of the most prosecuted crimes in the United States, yet scholarly and journalistic discourse about fraud and other financial crimes tends to focus on the absence of so-called “white-collar” prosecutions against wealthy executives.  This Article complicates that familiar narrative. It contains the first nationwide account of how the United States actually prosecutes financial crime.  It shows — contrary to dominant academic and public discourse — that the government prosecutes an enormous number of people for financial crimes and that these prosecutions disproportionately involve the least advantaged U.S. residents accused of low-level offenses.  This empirical account directly contradicts the aspiration advanced by the FBI and Department of Justice that federal prosecution ought to be reserved for only the most egregious and sophisticated financial crimes.  This Articles argues, in other words, that the term “white-collar crime” is a misnomer.

To build this empirical foundation, the Article uses comprehensive data of the roughly two million federal criminal cases prosecuted over the last three decades matched to county-level population data from the U.S. Census.  It demonstrates the history, geography, and inequality that characterize federal financial crime cases, which include myriad crimes such as identity theft, mail and wire fraud, public benefits fraud, and tax fraud, to name just a few.  It shows that financial crime defendants are disproportionately low-income and Black, and that this overrepresentation is not only a nationwide pattern, but also a pattern in nearly every federal district in the United States.  What’s more, the financial crimes prosecuted against these overrepresented defendants are on average the least serious.  This Article ends by exploring how formal law and policy, structural incentives, and individual biases could easily create a prosecutorial regime for financial crime that reinforces inequality based on race, gender, and wealth.

A much different federal sentence for a different crypto criminal

The trial and sentencing of Sam Bankman-Fried to 25 years in federal prison for his crypto criminality garnered a whole lot of attention earlier this years.  The plea and sentencing of another crypto criminal got a whole lot less attention, perhaps in part because his crimes and sentence were different in kind.  This press article, headlined "Binance founder Changpeng ‘CZ’ Zhao sentenced to 4 months, will enter prison as country’s richest inmate," provides some of the interestingly different details (with links from the original):

Changpeng “CZ” Zhao once sat atop the crypto industry as the founder and CEO of Binance, the world’s leading crypto exchange.  On Tuesday, a judge in Seattle federal court sentenced Zhao to four months in prison as part of a plea deal — but the multibillionaire will still retain most of his wealth.

After two years marked by the stunning collapse of crypto companies including Sam Bankman-Fried’s FTX, the Justice Department brought criminal charges against Binance and its CEO in November, though the exchange remained operational.  Unlike the DOJ’s case against Bankman-Fried, or other alleged crypto criminals such as Terraform Labs’ Do Kwon, Zhao and Binance reached a settlement with prosecutors, along with a slew federal agencies including the Treasury Department and Commodity Futures Trading Commission.

Zhao’s sentencing marks the conclusion of the process, with Judge Richard Jones ruling that the crypto entrepreneur — estimated to be worth around $43 billion, making him the richest inmate to serve time in the U.S. — must pay a $50 million personal fine in addition to his time behind bars.  In court, Zhao expressed contrition for his “mistakes” as CEO, though he noted that Binance implemented a compliance program. “In my mind, I wanted to do everything possible before stepping down as CEO,” he said before Jones.

The judge argued that Zhao’s “better to ask forgiveness than permission” philosophy was troubling, but ultimately decided on a lesser sentence than the 36 months requested by prosecutors. “Everything I see about your history and characteristics are of a mitigating nature and a positive nature,” Jones said, citing Zhao’s dedication to Binance and low likelihood to re-offend.

Zhao founded Binance in 2017, and it became the largest crypto exchange in just six months. Amid its meteoric growth, however, Binance struggled to implement effective “know your customer” and anti–money-laundering regimes — an embarrassing reality laid bare in complaints filed by the CFTC and Securities and Exchange Commission in 2023, including internal messages revealing that executives were aware of widespread compliance violations.  Despite — or perhaps owing to — Binance’s wildcat approach, Zhao became a global icon for the crypto industry, appearing at conferences from Portugal to the United Arab Emirates, which he made his de facto headquarters.  Still, as U.S. authorities circled around the world’s leading crypto companies, reports emerged that the DOJ was building a case against Binance....

In November, Attorney General Merrick Garland announced that the DOJ, along with the CFTC and Treasury Department, had reached a settlement with Binance and Zhao on charges related to money-laundering violations at the exchange.  The company agreed to pay $4.3 billion in fines spread among the agencies, which represented the largest enforcement action in Treasury Department history.  Notably, the settlement did not include fraud charges, and the SEC did not participate in the joint action. The agency continues to litigate its case against Binance in the U.S. District Court for the District of Columbia, where a judge recently held a hearing on Binance’s motion to dismiss the lawsuit.  The lack of more serious charges, along with the relatively light slap on the wrist for Zhao, led watchdog groups such as Better Markets to argue the settlement represented a “miscarriage of justice.”...

While Zhao’s plea deal laid out a potential sentence of 18 months in prison, prosecutors filed a memo last week requesting he serve 36 months, citing the “magnitude of Zhao’s willful violation of U.S. law and its consequences” and arguing that it would “not just send a message to Zhao but also to the world.”  In a concurrent filing, Zhao’s lawyers wrote that he “deeply regrets his offense” and asked for no time in prison, suggesting instead he be sentenced to house arrest. The request included letters from more than 160 friends and business associates, including members of the ruling families in the UAE and former U.S. ambassador to China Max Baucus, a former U.S. senator who serves on Binance’s advisory board.  Ultimately, Jones sided in part with Zhao’s team during Tuesday’s hearing, arguing against the prosecution’s proposed extended sentence given the lack of evidence that Zhao knew of illegal activity.

Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds

As reported in this Wall Street Journal piece, "FTX founder Sam Bankman-Fried was sentenced Thursday to 25 years in prison for fraud tied to the collapse of his digital exchange, capping his meteoric rise and fall." Here is more:

Less than two years ago, Bankman-Fried was the crypto king. The moptop millennial hobnobbed with heads of state, soaked up Caribbean views from his $30 million penthouse and vowed to use his wealth to better humanity.

Last year, a jury found the 32-year-old guilty of stealing billions of dollars from FTX customers and defrauding investors and lenders to his crypto investment firm Alameda Research.

Bankman-Fried, standing with his hands clasped, told the judge before sentencing Thursday that he was haunted every day by what he had thrown away. “I was responsible for FTX, and its collapse is on me,” he said during a 20-minute statement. A lot of people were let down, he said, adding, “I’m sorry about that.”

Federal prosecutors said Bankman-Fried committed one of the greatest financial frauds in U.S. history. Fueled by greed and hubris, he used other people’s money to fund his lavish lifestyle, make risky investments and pursue his political agenda, according to prosecutors. Prosecutors asked U.S. District Judge Lewis Kaplan to sentence Bankman-Fried to 40 to 50 years in prison. Without a lengthy sentence, Bankman-Fried could commit more crimes, Assistant U.S. Attorney Nicolas Roos told the court. “If Mr. Bankman-Fried thought that mathematics would justify it, he would do it again,” Roos said.

Bankman-Fried’s lawyers argued a sentence of no more than six years in prison was more appropriate, saying he still had much to offer to society. They pointed to his autism, his deep remorse and his charitable works as reasons for a lenient sentence. Marc Mukasey, his lawyer, told the judge that Bankman-Fried wasn’t a “ruthless financial serial killer” who sought to hurt people. “Sam Bankman-Fried does not make decisions with malice in his heart,” said Mukasey. “He makes decisions with math in his head.”...

During a monthlong trial in the fall, jurors heard testimony from three of Bankman-Fried’s top lieutenants, including his ex-girlfriend, who said the FTX founder directed them to commit crimes alongside him. Bankman-Fried took the unusual step of testifying in his own defense. He told jurors that he never committed fraud, yet he struggled under cross examination, saying dozens of times that he didn’t recall specifics.

Kaplan said Thursday that Bankman-Fried committed perjury during his testimony, including when he told jurors that until fall 2022, he had no knowledge that Alameda had spent FTX customer deposits.

In the weeks before the sentencing, Bankman-Fried’s supporters wrote letters to the judge, saying that his struggles with depression, autism and anhedonia — the inability to feel happiness — weigh in favor of a lighter sentence....

Kaplan said Thursday that in determining the sentence, he wasn’t weighing whether customers would get their money back. “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence,” the judge said.

Prior related posts (in some of which I set the over/under at 25 years):

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 
• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Some notable developments and commentary on Sam Bankman-Fried's coming sentencing
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
• Rounding up a few sentencing speculations a few days before Sam Bankman-Fried's sentencing

Texas justice?: how should deal cut by special prosecutors to end felony charges against Texas AG be described?

I have not followed closely any of the legal cases and dramas surrounding Texas Attorney General Ken Paxton, but the news of a deal to end long-running state criminal charges against him caught my eye in part because I am not quite sure how to describe it.  As detailed in this local article, headlined "Ken Paxton agrees to community service, paying restitution to avoid trial in securities fraud case," the resolution is not a plea deal because AG Paxton is not pleading guilty to anything.  And yet, AG Paxton is agreeing to serve a kind of sentence functionally and to being under the yoke of prosecutors for an extended period:

Prosecutors on Tuesday agreed to drop the securities fraud charges facing Attorney General Ken Paxton if he performs 100 hours of community service and fulfills other conditions of a pretrial agreement, bringing an abrupt end to the nearly nine-year-old felony case that has loomed over the embattled Republican since his early days in office.

The deal, which landed three weeks before Paxton is set to face trial, also requires him to take 15 hours of legal ethics courses and pay restitution to those he is accused of defrauding more than a decade ago when he allegedly solicited investors in a McKinney technology company without disclosing that the firm was paying him to promote its stock. The amount of restitution totals about $271,000, prosecutor Brian Wice said.

Paxton, who will not have to enter a plea under the terms of the agreement, faced the prospect of decades in prison if he had been convicted of fraud. His status as a felon, based in part on an opinion he issued himself, would have likely barred him from running for office in the future. Paxton attorney Dan Cogdell said the prosecutors “approached us” and Paxton was “happy to agree to the terms of the dismissal.”

“But let me be clear, at no time was he going to enter any plea bargain agreement or admit to conduct that simply did not occur,” Cogdell said in a statement. “There is no admission of any wrongdoing on Ken’s part in the agreement because there was no wrongdoing on his part.”

The deal is the second major win for Paxton in roughly the last six months, after the Republican-controlled Texas Senate acquitted him last fall of 16 impeachment charges centered on allegations that he accepted bribes and abused the authority of his office to help a wealthy friend and campaign donor....

Two of the charges — first-degree felonies — stemmed from allegations that Paxton persuaded investors, including a then-GOP state lawmaker, to buy at least $100,000 worth of stock in a tech startup, Servergy, without disclosing that he would be compensated for it. Paxton will have 18 months, the length of the pretrial deal period, to pay restitution to the former lawmaker, Byron Cook, and the estate of Joel Hochberg, a Florida businessman who died last year. Wice said he is “not necessarily opposed" to dropping the charges before the 18 months are up if Paxton makes the payments sooner. He said Paxton cannot use campaign funds to pay restitution....

Wice said he had been “besieged by a torrent of phone calls” from people who have “expressed their monumental displeasure with the fact that these cases are being resolved with a pretrial intervention.” Touting the restitution Paxton now owes to his alleged victims, Wice said it was more important to secure justice for them than to pursue prison time for Paxton, which he said should only be a priority if the defendant poses a threat to public safety....

Paxton will perform community service in Collin County, where he resides, with an "entity or organization" agreed upon by both sides, Wice said — likely a "food pantry or soup kitchen." He will also be required to check in with prosecutors every 60 days to ensure he is fulfilling the terms of the deal. The case could still resume and head to trial if Paxton fails to comply.

I think it would be fair to label this resolution a deferred prosecution agreement or maybe a non-prosecution agreement, though it appears the special prosecutor calls this a "pretrial intervention."  Whatever the right label, I wonder if this arrangement is unusual in Texas criminal justice arenas.  I also wonder whether folks view this resolution as true Texas justice or a kind of special Texas justice.

Rounding up a few sentencing speculations a few days before Sam Bankman-Fried's sentencing

Though we are still a few days from the high-profile sentencing of former FTX CEO Sam Bankman-Fried, I have already seen some lengthy press pieces discussing the sentencing filings and speculating about how US District Judge Lewis Kaplan with weigh competiting arguments.  Here is a round up:

From Business Insider, "FTX's victims may get all their money back. The judge sentencing Sam Bankman-Fried might not care."

From CoinDesk, "U.S. Government's Legal Precedents Don't Support Lengthy Prison Term, Bankman-Fried's Defense Argues"

From Inc., "Is Sam Bankman-Fried a 'Super-Villain' or Just a Bad Trader?"

From Unchained, "SBF’s Prison Sentencing Is Coming Up. How Many Years Will He Get?"

I remain inclined to put the over/under for an imprisonment term here at 25 years, in part because I ccan readily imagine the sentence being somewhat shorter or somewhat longer. 

Prior related posts:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 
• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Some notable developments and commentary on Sam Bankman-Fried's coming sentencing
• Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried

Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried

The federal court in the Southern District of New York is scheduled, in less than two week, to sentence Sam Bankman-Fried following his trial conviction on multiple fraud charnges.  A few weeks ago, as noted here, SBF's lawyers submitted a lengthy sentencing memo arguing that his advisory guideline range is 63-78 months that that "a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing."  

Unsurprisingly, federal prosecutors have a different sentencing perspective.  And, in the run-up to the March 28 sentencing, it has not filled this even longer sentencing memorandum.  The argue that SBF's guideline range is literally off the charts:

Based on the foregoing, the adjusted offense subtotal is 60.  Because any offense level in excess of 43 is treated as an offense level of 43, 43 is the total applicable offense level. (PSR ¶ 89).  The defendant’s criminal history score is zero, which puts him in Criminal History Category I. (PSR ¶ 92).  Based upon these calculations, Bankman-Fried’s advisory Guidelines imprisonment range is life. (PSR ¶ 129).  However, because the statutorily authorized maximum sentence is 110 years’ imprisonment, which is less than life imprisonment, the applicable Guidelines sentence is 110 years’ (1,320 months) imprisonment. U.S.S.G. §§ 5G1.1(a), 5G1.2(d)

Notably, though, federal prosecutors do not ultimately advocate for a sentence of imprisonment for 110 years for SBF.  As explained at the end of its preliminary statement, the feds think that less than half of this term will do the trick:

The scope, duration, nature, and sheer number of Bankman-Fried’s crimes, the resulting harm they have caused, the willful disregard of the rule of law, and the absence of countervailing mitigating circumstances render him exceptionally deserving of a sentence that is sufficiently severe to provide justice for the defendant’s crimes and to dissuade others from committing similar crimes, and that will permit the defendant to return to liberty only after society can be assured that he will not have the opportunity to turn back to fraud and deceit.  Although it is unlikely (but not impossible) that the defendant will work in finance again, and will likely forfeit all of his ill-gotten gains, justice requires that he receive a prison sentence commensurate with the extraordinary dimensions of his crimes.  For these reasons, the legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment.

Because a "split the difference" approach often serves as a reasonable first guess for a contested sentencing outcome, I am tempted to put the over/under for an imprisonment term here at 25 years.  I am not familiar enough with Judge Lewis Kaplan's sentencing history to make a bolder prediction; folks in the comments are certainly welcome to do so.

Prior related posts:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 
• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
• Some notable developments and commentary on Sam Bankman-Fried's coming sentencing

Some notable developments and commentary on Sam Bankman-Fried's coming sentencing

Sam Bankman-Fried is scheduled to be sentenced three weeks from today, and his sentencing memo filed last week has already generated considerable comments (some covered here).  As we await the government's filing next week, I have seen a few recent notable developments and commentary that seemed worth flagging here (with links from the original):

From CoinPedia, "Sam Bankman-Fried Fights for Leniency: Will He Face 100 Years in Prison?".  An excerpt:

In an unexpected turn, a compelling letter has been submitted, urging Judge Kaplan to take a firm stance against leniency for Sam Bankman-Fried (SBF), co-founder of FTX. Emotions run high as the letter passionately argues against what it sees as “intellectual dishonesty” in pleas for leniency, especially regarding possible reimbursements for account holders.  The letter, written by a CBOE member on behalf of a market maker firm, sharply criticizes SBF’s alleged financial misconduct, describing a situation where funds are claimed to be stolen, gambled, and only partially recovered.

From Puck, "S.B.F.’s Sentencing Game Theory: Bankman-Fried’s lawyers appear to be setting the stage to appeal his sentence—and potentially redefine the definition of fraud, itself."  An excerpt:

Even if the six-year bid doesn’t sway Kaplan himself, its real purpose is likely to set the appellate stage — where Bankman-Fried will argue he was denied a fair trial when Kaplan prevented him from presenting his honest intentions with FTX.  As a fallback, he’ll attempt to convince the higher-ups to take a “textualist” approach to criminal sentencing.

From Slate, "The FTX Saga Twist That Might Save SBF in Sentencing: He could still get up to a century in prison."

So, to recap: In Bankman-Fried’s favor, it looks like his crimes may not wind up wiping out thousands of investors. But working against him is a long pattern of behavior that seems designed in a lab to infuriate a judge, who may also choose to lean on a presentencing report that says to throw the book at Bankman-Fried. “I think it’s hard to predict, but I’d be surprised if it weren’t a significant sentence,” [former AUSA Rachel] Maimin said.  Bankman-Fried is in danger of learning that there isn’t exactly a good way to come up for sentencing on seven federal felonies."

Prior related posts:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 
• Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"

Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"

For a number of reasons, I always find white-collar sentencings to be fasciniating, and the scheduled sentencing next month of Sam Bankman-Fried is already fitting that characterization.  The latest development in the run-up to the March 28 sentencing comes in the form of SBF's lawyers submitting late yesterday this 90-page sentencing memo.  This document assails many aspects of how the probation office calculated the applicable guideline range and makes an array of arguments based on all the 3553(a) sentencing factors.  This lengthy document concludes with this paragraph that is titled "Sam Bankman-Fried's Sentencing Request":

Sam Bankman-Fried respectfully submits that, for the reasons set forth above, an appropriate method of arriving at a just sentence would be to consider the Adjusted Offense Level (Subtotal) of 56, reduced by 30 levels based on zero loss, which yields an advisory Guidelines range of 63-78 months.  When the § 3553(a) factors are considered, including Sam’s charitable works and demonstrated commitment to others, a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing.

Here are a variety of press accounts of this sentencing filing and some related SBF activity:

From Business Insider, "Sam Bankman-Fried's lawyer says sentencing the FTX founder to a 100-year prison term would be 'grotesque' and 'barbaric'"

From CoinPedia, "SBF Fights for Crypto Fraud Leniency: 6 Years vs. 110?"

From the New York Times, "Sam Bankman-Fried Makes His Last Stand: Since the disgraced crypto mogul was convicted of fraud, his supporters have maneuvered to secure a lenient sentence, with his lawyers recommending he serve no longer than 6.5 years in prison"

From the Wall Street Journal, "Sam Bankman-Fried Calls for Shorter Prison Sentence, Citing Autism: Lawyers for the FTX founder say he wasn’t motivated by greed but by a desire to better the world through philanthropic giving"

Prior related posts:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 
• Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried? 

Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried?

The question in the title of this post is prompted by this new CoinDesk article headlined "Sam Bankman-Fried's Sentence Might Be Lighter Than You'd Expect."  Here are excerpts:

Former FTX boss Sam Bankman-Fried (SBF) may be handed a lighter sentence than otherwise when he faces District Judge Lewis A. Kaplan next month because customers of the bankrupt exchange will probably be made whole thanks to a bounce in crypto markets and the buoyancy of certain investments held by the estate.

Bankman-Fried was found guilty of fraud in November 2023, about a year after his crypto trading empire collapsed. During the bankruptcy process, the crypto market has risen sharply -- CoinDesk Indices' CD20 gauge has gained more than 130% -- meaning many thousands of hapless creditors are going to receive all the funds they had locked in, albeit at November 2022 prices.  In July last year, the bankruptcy team said customers were owed $8.7 billion.

The jump in crypto markets matters because restitution can be taken into account for sentencing.  For example, for low losses, the guidelines suggest a range of 24-30 months.  A high-loss amount, in contrast, could lead to a draconian range of upwards of 20 years’ imprisonment, or even life, according to Jordan Estes, a partner at the New York City office of law firm Kramer Levin. “I would expect the loss amount to be hotly contested at sentencing,” said Estes, a former assistant U.S. attorney who co-led the general crimes unit in the Southern District of New York, where the trial took place.  “In particular, the defense may argue for a substantially lower loss amount, or even a loss amount of $0, if all customers and creditors will be made whole,” she told CoinDesk via email.

That said, the U.S. sentencing guidelines that give defendants credit for amounts returned to victims apply only when the return took place before the offense was detected.  In this case, it’s clearly not SBF who is giving the money back, and the payments come well after discovery of the offense.  A possible parallel is the case of fraudulent financier Bernie Madoff, who died in prison at the age of 82 while serving a series of consecutive sentences that ran to 150 years. In Madoff's case, the bankruptcy trustee also recovered large sums of stolen money, but he didn't receive any credit for that.

Prior related post:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts? 
• Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing 

UPDATE: In the comments, Professor Todd Haugh flagged his recent LinedIn posting discussing these issues.  Here is how his discussion concludes:

In the federal system, the sentencing range applicable to an economic offender like SBF is heavily determined by the loss amount. The higher the loss, the higher the sentencing range, and the higher the eventual sentence (even though judges don't have to follow the range they are anchored by it).

You might ask (as DealBook does), if customers are made whole and there is no loss, doesn't that help SBF at sentencing?  You would think, except sentencing loss isn't loss like we think of it -- it's actual or intended loss according to the Sentencing Guidelines and most caselaw.  So even though Ray found all the money and there may be very little actual loss, SBF's fraud caused an intended loss of about $8B.  That's the number that will set the loss amount regardless of how much is recovered for customers (subject to a lot-and I mean a lot-of argument between prosecutors and SBF).

But what about the "sort of" part?  Even though the intended loss is what it is, because the guideline range is only advisory, Judge Kaplan can ignore it and impose a lower sentence. That almost always happens in high loss white collar cases because the loss amounts push the sentencing ranges to outlandish heights.  And when the judge is considering how low to go, he's going to be considering that "actual loss" amount, which may be $0 here.

It's not a get out of jail free card, but it matters.

Federal judge criticizes ex-IRS tax leaker (and DOJ) when imposing five-year sentence

I flagged today's notable DC sentencing in this post last night, and this lengthy CBS News accounting of the sentencing highlights that there were some notable comments from the judge.  Here are snippets from the press report:

The Internal Revenue Service contractor who pleaded guilty to leaking the federal tax records of former President Donald Trump and some of the nation's wealthiest individuals was sentenced Monday to 5 years in prison, 3 years supervised release and a $5,000 fine. The sentence brings an end to a criminal case that exposed the source of a number of high-profile tax information leaks in recent years.

Charles Littlejohn, 38, pleaded guilty to one count of unauthorized disclosure of tax returns and return information in October and faced a maximum sentence of 5 years in prison. Investigators said he used his position as a contractor with the nation's tax collector to illegally obtain and then disperse the financial records of the former president, which resulted in "numerous articles" based on the information.

Before sentencing Littlejohn on Monday, federal District Judge Ana Reyes called his conduct "an attack on our constitutional democracy." "He targeted the sitting president of the United States of America, and that is exceptional by any measure," Judge Reyes said. "It cannot be open season on our elected officials."...

Littlejohn's explanations did not appear to sway the court's sentencing decision. Reyes said courts must be an "unbreakable bulwark" for American democracy in the face of increased threats. The court's job, the judge said, was to make sure that others never viewed "this type of conduct as acceptable or justifiable or worth the trade-off…We are a nation of laws."...

The Justice Department's court filing revealed that the other tax returns Littlejohn admitted to acquiring dated as far back as 15 years, and they belonged to thousands of the nation's wealthiest Americans. Investigators alleged he mailed a storage device containing the information to another unnamed news organization, identified by CBS News as ProPublica....

The judge appeared frustrated at times with prosecutors as she wrestled with a guideline sentencing range of just 18 months and a crime that she said warranted serious punishment and deterrence.  Reyes asked prosecutor Jonathan Jacobson for information on any additional charges Littlejohn may have faced if he had opted not to enter the guilty plea, but the government attorney did not provide further detail.  "The fact that he did what he did and he is facing one felony count, I have no words for," the judge said, with exasperation in her voice.

Especially in light of some recent blog comment discussions about plea deals and DOJ transparency, I find it interesting that the DOJ apparently rebuffed the sentencing judge's efforts here to find out any more information about DOJ's notable charging and bargaining decisons in this case. I guess what happens inside DOJ, stays inside DOJ.

UPDATE: The comment thread here started a discussion of the terms of plea deal in this case.  Attorney Webb Wassmer kindly sent me a copy of the (public) plea agreement agreement (which was filed back in October 2023), and other case documents accessed from the court website.  I have posted the plea agreement below, and here is a snippet of his helpful summary:

[The agreement calculated] him at total offense level 11, CH I, for a range of 8-14 months with a further reduction possible, [but] there was no agreement as to actual sentence, with the Government stating that it would seek an upward departure and/or variance.

[T]here is a limited appeal waiver. Most significantly, defendant reserved the right to appeal if the Court granted an upward departure or variance above the advisory guideline range identified at sentencing. Thus, he can appeal the five year sentence. As others have noted, that type of appeal almost never succeeds.

Download Littlejohn Plea Agreeement 10-12-23

Federal judge sentences Peter Navarro to 4 months of imprisonment for contempt of Congress

As reported in this Fox News piece, "Peter Navarro, who served in the White House under former President Donald Trump, was sentenced Thursday for flouting a House Jan. 6 committee subpoena. U.S. District Judge Amit Mehta sentenced Navarro to four months in prison and ordered him to pay a fine of $9,500." Here is more:

That's two months shorter than the six prosecutors had sought, but Mehta drastically reduced the whopping $200,000 fine sought by the Justice Department.   

A former adviser to the president on trade and manufacturing policies, Navarro was convicted in September of two counts of contempt of Congress for defying a subpoena for documents and a deposition from the House select committee investigating the Jan. 6, 2021, riot at the U.S. Capitol. The subpoena required Navarro to appear and produce documents in February 2022, and sit for a deposition in March 2022, but Navarro refused to provide the materials and testify. As a private citizen, he was indicted on June 2, 2022....

Mehta on Thursday had gone through a tedious recounting of the sentencing guidelines and came to the conclusion that there is a "zero to six months range," of imprisonment in this case, as well as a fine range of $500 to $9,500. Sentencing guidelines are only a suggestion, and the judge could have sentenced Navarro to a longer sentence if he saw fit.

At the sentencing hearing, Navarro spoke in his own defense, saying he defied the subpoena because he believed in "good faith" that Trump had invoked executive privilege. "When I received that congressional subpoena, the second, I had an honest belief that the privilege had been invoked, and I was torn. Nobody in my position should be put in conflict between the legislative branch and the executive branch. Is that the lesson of this entire proceeding? Get a letter and a lawyer? I think in a way it is," Navarro said. "I am disappointed with a process where a jury convicted me, and I was unable to provide a defense, one of the most important elements of our justice system."

Navarro's defense attorney said the court of appeal will determine if executive privilege applies. The judge noted how in citing executive privilege, another White House adviser, Kellyanne Conway "had an (DOJ Office of Legal Counsel) OLC opinion she could rely on," but Navarro had no such opinion and didn't hire representation.

"I have a great deal of respect for your client and what he accomplished and that makes it more disappointing," Mehta said, also noting that Mark Meadows, who also faced a Jan. 6 committee subpoena, "produced documents, produced texts, he didn’t testify, but at least he did something." ...

Prosecutors had asked the judge to sentence Navarro to six months behind bars and impose a $200,000 fine. The Justice Department has previously noted that each count of contempt of Congress carries a minimum of 30 days and a maximum of one year in jail, as well as a fine of up to $100,000....

Navarro was the second Trump aide to face contempt of Congress charges. Former White House adviser Steve Bannon was convicted of two counts and was sentenced to four months behind bars, though he has been free while appealing his conviction.

Unsurprisingly, federal prosecutors content to focus on sentencing rather than a second trial for Sam Bankman-Fried

As reported in this CNBC piece, headlined "Prosecutors say they will not pursue second Sam Bankman-Fried trial," the feds have officially decided it will not seek a second criminal trial for high-profile fraudster Sam Bankman-Fried.  Here are excerpts from a lengthy piece that also previews the upcoming sentencing: 

Prosecutors have decided not to pursue a second trial against disgraced FTX founder Sam Bankman-Fried.  In a note to Judge Lewis Kaplan on Friday, the U.S. government explained that the decision to forego a second set of proceedings had to do with the fact that much of the evidence that would have been presented in a second trial had already been submitted to the Court during Bankman-Fried’s first criminal trial.

In November, following a month’s worth of testimony from nearly 20 witnesses, a jury found the former FTX chief executive guilty of all seven criminal counts against him following a few hours of deliberation.  Prosecutors added that the Court could consider the hundreds of exhibits already entered into evidence during these proceedings when he is sentenced next year.  “Given that practical reality, and the strong public interest in a prompt resolution of this matter, the Government intends to proceed to sentencing on the counts for which the defendant was convicted at trial,” continued the letter to Judge Kaplan.

Bankman-Fried, the 31-year old son of two Stanford legal scholars and graduate of the Massachusetts Institute of Technology, was convicted of wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.  He had pleaded not guilty to the charges, which were all tied to the collapse of FTX and its sister hedge fund Alameda late last year.

The second trial, which had been slated to start in March, addressed an additional set of criminal counts, including conspiracy to bribe foreign officials, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business and substantive securities fraud and commodities fraud.

Damian Williams, the U.S. attorney for the Southern District of New York, wrote in the letter to the Court that “a second trial would not affect the United States Sentencing Guidelines range for the defendant, because the Court can already consider all of this conduct as relevant conduct when sentencing him for the counts that he was found guilty of at the initial trial.”

So now, the question of prison time goes to Judge Kaplan.  The sentencing date is March 28 at 9:30 a.m. ET. The FTX founder faces more than 100 years in prison....

In this case, the statutory maximum sentence is around 115 years, but there is a sliding scale for sentencing according to recommended guidelines given the scale of the crimes and the criminal history of the defendant. “I wouldn’t be surprised if SBF spends the next 20 or 25 years of his life in prison,” Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section, told CNBC.

“The sheer scale of his fraud was immense, he was defiant and lied on the witness stand, and Judge Kaplan had very little patience for his antics while out on bond. He will have more sympathy for the victims than he has for Bankman-Fried,” added Mariotti....  “The federal sentencing guidelines will likely be sky high, but they are just that — guidelines — and the judge is required to consider all of the circumstances surrounding SBF and his offense,” said Mariotti....

Former Assistant U.S. Attorney Kevin J. O’Brien, who specializes in white-collar criminal defense in NYC, thinks Bankman-Fried has the chance at a shorter sentence, telling CNBC, “Since judges have discretion even under the Guidelines, I believe his sentence will be in the 15 to 20 year range.” O’Brien added that given Bankman Fried’s age, he thinks the judge will be inclined to give him a chance to live a full life after his prison term.

Bankman-Fried’s case has been compared with that of Elizabeth Holmes, founder of medical device company Theranos, which ceased operations in 2018. Holmes, 39, was convicted in early 2022 on four counts of defrauding investors in Theranos after testifying in her own defense. She was sentenced to more than 11 years in prison, and began serving her punishment in May at a minimum-security facility in Bryan, Texas.

But former federal prosecutor Paul Tuchmann tells CNBC that he expects harsher terms for the former FTX CEO, because “the amount of losses that were suffered is simply staggering.” Tuchmann compared Bankman-Fried’s case to that of Bernie Madoff, who was sentenced to 150 years in prison. “Like Madoff, a lot of the losses in this case were small investors. They weren’t all large institutions, which really tends to create a greater pressure for a significant sentence,” said Tuchmann.

In this setting, it seems worth noting, yet again, how federal sentencing rules function to sometimes make jury trials and constitutional jury trial rights inconsequential.  Here, the US Attorney accurately notes that the federal sentencing guideline range will be calculated to produce the exact same recommended sentence with or without a trial and guilty verdict on additional charges. (Indeed, under current federal sentencing rules, even if SBF were acquitted on all counts in a second trial, the guideline calculation could be the same.)  Why bother with a second jury trial if the government can seek and secure punishment, under a lower standard of proof, at sentencing for the first convictions?

Prior related post:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts?

Hunter Biden indicted on nine new federal tax charges

As reported in this AP piece, "Hunter Biden was indicted on nine tax charges in California on Thursday as a special counsel investigation into the business dealings of the president’s son intensifies against the backdrop of the looming 2024 election." Here's more:

The new charges — three felonies and six misdemeanors — come in addition to federal firearms charges in Delaware alleging Hunter Biden broke a law against drug users having guns in 2018.

Hunter Biden “spent millions of dollars on an extravagant lifestyle rather than paying his tax bills,” special counsel David Weiss said in a statement. The charges are focused on at least $1.4 million in taxes he owed during between 2016 and 2019, a period where he has acknowledged struggling with addiction.

If convicted, Hunter Biden could face up to 17 years in prison. The special counsel probe remains open, Weiss said. Hunter Biden had been previously expected to plead guilty to misdemeanor tax charges as part of a plea deal with prosecutors. Defense attorneys have signaled they plan to fight any new charges, though they did not immediately return messages seeking comment Thursday....

The criminal investigation led by Delaware U.S. Attorney David Weiss has been open since 2018, and was expected to wind down with the plea deal that Hunter Biden had planned to strike with prosecutors over the summer. He would have pleaded guilty to two misdemeanor tax evasion charges and would have entered a separate agreement on the gun charge. He would have served two years of probation rather than get jail time.

The agreement also contained immunity provisions, and defense attorneys have argued that they remain in force since that part of the agreement was signed by a prosecutor before the deal was scrapped. Prosecutors disagree, pointing out the documents weren’t signed by a judge and are invalid.

After the deal fell apart, prosecutors filed three federal gun charges alleging that Hunter Biden had lied about his drug use to buy a gun that he kept for 11 days in 2018. Federal law bans gun possession by “habitual drug users,” though the measure is seldom seen as a stand-alone charge and has been called into question by a federal appeals court.

Prior related posts:

• Hunter Biden agrees to plea deal seeking to avoid prison time on tax and gun charges
• A "sweetheart deal"?: Minor (mostly uninformed) musings about Hunter Biden's prosecution and plea deal
• Some reflections in headlines on Hunter Biden's "sweetheart" plea deal 
• On eve of plea hearing for Hunter Biden, House Committee Chair urges district court to consider "improper conduct" surrounding prosecution
• Not a done deal: Hunter Biden ends up pleading not guilty to federal charges after district judge raises concerns about plea deal particulars 

Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing

A lot of folks had a lot of interesting comments in response to my first post about the future sentencing of Sam Bankman-Fried following his conviction on all seven federal criminal counts brought against him at his first trial.  Since that post, I have seen a number of press pieces with various early takes on his sentencing (which is scheduled for March 2024 and, I would guess, will take place even later).  Here is a partial round up:

From CNBC, "Sam Bankman-Fried faces over 100 years in prison at sentencing. Experts weigh in on how much time he’ll actually get"

From CryptoSlate, "SBF will likely serve 25 years rather than max sentence, former DOJ prosecutor says"

From the Daily Mail, "Sam Bankman Fried, 31, likely faces 50 YEARS behind bars, legal expert believes: $10bn FTX crypto fraudster's crimes carry maximum of 115 years behind bars"

From Forbes, "Sam Bankman-Fried Faces 110-Year Max Sentence After FTX Trial — Here’s How Long Experts Think He’ll Be Behind Bars"

From the New York Times, "Sam Bankman-Fried Could Get 100 Years in Prison. What Is Fair?"

Because I do not trust my money in crypto, I am not sure I want to trust my sentencing predictions to CryptoSlate.  That said, and though I am never inclined to place any actual bets on any actual legal proceedings, I do think 25 years may serve as a reasonable over/under for Judge Lewis Kaplan's coming sentencing decision.  

Prior related post:

• You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts?