The federal sentencing guidelines for white collar criminals, i.e. economic crimes, have been a topic of controversy for quite some time. In April 2015, the guidelines for economic crimes were amended in 3 key areas, in part to amend the "draconian" sentences which the unrevised guidelines often produced. For example, in 2008 a federal judge sentenced a 72-year-old man to 330 years in prison, while infamous economic criminal Bernie Madoff was 71 years old when he was sentenced to 150 years in prison in 2009. Many people find these sentences not only unrealistic but ridiculous; others are against the changes arguing that perpetrators of economic crimes receive a much greater degree of leniency than, say, persons convicted of violating the controlled substances laws.
The first set of major changes to the federal sentencing guidelines for white collar criminals were, according to the US Sentencing Commission, who are tasked with the promulgation of the guidelines, made in light of inflation (as mundane a concept as that is). The US Sentencing Commission has recognized that the "[d]ue to inflationary changes, there has been a gradual decrease in the value of the dollar over time." As a result, the theft of, say, $1 million dollars a decade ago is more like stealing $1.5 million dollars today. Therefore, the US Sentencing Commission has decided to raise the dollar amount before certain levels of enhancements apply. This is going to have a rather large impact on sentencing going forward. For example, someone who steals $3.5 million dollars this year (under the new guidelines) is going to be treated the same as someone who stole $2.5 million dollars last year (under the old guidelines).
The second set of major changes to the guidelines for economic crimes involves how the number of victims to a crime impacts one's sentence for committing that crime. The bottom line is that the revised guidelines will result in harsher sentences for some people (compared to the old guidelines), and less harsh sentences for others. Before, your sentence could only be enhanced (by 2 levels) if the crime "involved 10 or more victims" (or if it was committed through mass-marketing); under the new guidelines, your sentence can still be enhanced if it involved 10 or more victims, but it can also be enhanced if there was only one victim who suffered "substantial financial hardship." What does this mean? Consider these two crimes: Crime One - Grandpa has $250,000 in life savings, and you (Grandson) steal all of it, leaving Grandpa destitute. Crime Two - Investment Advisor has 10 clients all of whom are extremely wealthy; Investment Advisor defrauds each of his clients for $25,000 each (for a total loss of $250,000, much like in Crime One). Under the old guidelines, Grandson would receive no victim related enhancement, but Investment Advisor would such an enhancement. Under the new guidelines, both Grandson and Investment Advisor would receive the same enhancement; Grandson's crime caused his victim to suffer "substantial financial hardship" and Investment Advisor's crime "involved 10 or more victims."
But, the victim related enhancements also reduces the harshness of penalties in other circumstances. Under the old guidelines, you could get an even greater (4 levels) enhancement if the crime "involved 50 or more victims," and an even greater (6 levels) enhancement if the crime "involved 250 or more victims." Now, in order to get the 4 level enhancement, the government has to prove that 5 or more victims suffered "substantial financial hardship," and 25 or more victims for the 6 level enhancement. This essentially means that if someone defrauds a bunch of people of a relatively small amount of money they will be treated less harshly than someone who defrauds only a few people of a large amount of money. This also means that the government will have to do more than merely count up the number of victims allegedly involved; instead they will have to actually prove that the victim suffered "substantial financial hardship" which involves more than merely showing that someone lost money.
The third major change to the sentencing guidelines for economic crimes involves this concept of "intended loss." Basically, "intended loss" is used to determine how much money which has been lost by a victim should count for purposes of calculating a defendant's sentence. It has previously been this totally amorphous concept which some courts have treated one way, and other courts have treated another. For example, in the 10th, 3rd, 2nd, and 5th circuits have all held that, under the old guidelines, "intended loss" is the loss which the defendant subjectively expected the victim to lose; whereas, the 1st and 7th circuits have held that "intended loss" is the loss which, objectively, the victim was likely to lose.Now, the US Sentencing Commission has made it clear: intended loss is the loss which the defendant purposely (subjectively) sought to inflict on the victim.
In the District of Massachusetts, the US Attorney's Office is currently employing part of the revised guidelines (namely, the part involving how loss amounts are calculated in light of inflation) early in its plea negotiations. They USAO, however, is not willing to employ all of the revised guidelines, in particular the changes to the victims enhancement. This tactic gives some pause for concern for this writer. In most circumstances, the judge does not have to accept the plea agreement which the prosecutor and the defendant has agreed to. Since the USAO is only employing only part of the revised guidelines in its plea agreements, it essentially requires the judge to perform a kind of mental gymnastics that many judges might be unwilling to perform. An added layer of protection might be afforded to defendants by way of a "C" plea, which essentially allows a defendant withdraw his or her guilty plea if the judge does not agree with the terms of the plea agreement. This, however, might not be worth the trade because it essentially would strip a defendant the right to argue for a below-guidelines sentence in light of 18 U.S.C. § 3553(a).
If you are facing an economic crime charge, you will want to secure the best white collar crimes lawyer possible. The lawyer must understand the new federal sentencing guidelines, as well as how to strategically plan your defense. In sophisticated and complex cases like a white collar crimes case, your attorney must be experienced in thinking creatively and out of the box to ensure a top-notch defense.
Content of this BBLawg entry was based, in part, on information from the Huffington Post.
If you have this type of case contact Brad Bailey one of the top criminal defense lawyers in Boston.