The Cautionary Instruction: U.S. Sentencing Commission reviews white-collar crime guidelines

Friday, 15 August 2014 06:00 AM Written by  Matt Mangino

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Judge Terrence Boyle of the U.S. District Court for the Eastern District of North Carolina presided over the government’s prosecution of Wakemed Health and Hospitals in 2013, a company accused of pervasive Medicare fraud. He rejected a plea agreement, lamenting the skyrocketing number of healthcare fraud cases across the country and their impact on “every American wage earner and every American citizen.”

Judge Boyle noted the difficulty “for society and the court to differentiate between the everyday working Joe or Jane who goes to prison and the nonprofit corporate giant who doesn’t.” He complained that deferred prosecution agreements like the one he rejected are supposed to be for marijuana-smoking teenagers, not corporations accused of financial crimes.

Boyle’s complaint seemed to be directed at the U.S. Commission on Sentencing. The Commission, which yesterday voted on priorities for the coming year, has expressed interest in examining punishments for white-collar crime. Not to make them stiffer, but to be more lenient.

The timing of the Commission’s action seem a bit peculiar given the public outrage at those recently convicted of massive fraud—stealing the life savings of their clients; the lingering anger over the damage inflicted by the 2008 financial meltdown; and situations described by Judge Boyle.

Sentencing guidelines are advisory rather than mandatory, but judges still rely heavily on them. Advocates argue that white-collar sentencing guidelines are "mixed up and crazy" and could weaken support for keeping them in place, said Ohio State University law professor Douglas Berman, a sentencing law expert.

Critics of the guidelines in white-collar cases contend that they have come to rely too heavily on financial-loss calculations, which can quickly mushroom when the crime involves a public company. In certain cases, a public-company executive could face life in prison, said James Felman, a Tampa, FL defense attorney and member of an American Bar Association Criminal Justice Section Task Force on the Reform of Federal Sentencing for Economic Crimes looking at proposing revisions in the guidelines for economic crimes.

The commission's action to soften drug-crime guidelines is a signal that the time is ripe, to soften the impact on white-collar crime sentencing. Advocates hope the commission's decision to lower sentencing guideline ranges for drug crimes, effectively de-emphasizing the significance of drug quantity, paves the way for a new sentencing scheme that removes some of the weight attached to economic loss.

A 2013 proposal from an American Bar Association task force proposed that very thing in 2013. The task force encouraged judges to place less emphasis on how much money was lost and more on a defendant's culpability.

Under the proposal, judges would more scrupulously weigh less-quantifiable factors, including motive, the scheme's duration and sophistication, and whether the defendant actually financially benefited. Essentially, the Commission would give judges a little more discretion.

I’m sure Judge Boyle would be pleased with a little more discretion, but those brought before him might not be as pleased with the result.

(Image: John Lund/Sam Diephuis/Blend Images)


Matthew T. Mangino is of counsel with Luxenberg, Garbett, Kelly & George, P.C. He is the former district attorney of Lawrence County and just completed a six year term on the Pennsylvania Board of Probation and Parole. His weekly column on crime and punishment is syndicated by GateHouse New Service. You can read his musings on the criminal justice system at www.mattmangino.com and follow Matt on Twitter @MatthewTMangino. His new book The Executioner’s Toll, 2010: The Crimes, Arrests, Trials, Appeals, Last Meals, Final Words and Executions of 46 Persons in the United States is now available from McFarland & Company publishers.

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