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Rethinking Draconian White Collar Sentences

Law professor Ellen Podgor had a very thoughtful article, Throwing Away the Key, 116 Yale L.J. Pocket Part 279 (2007, about the need to rethink the draconian sentences being meted out to white collar criminals.

These modern changes in sentencing and parole law have caused the debate to shift: the question is no longer whether white-collar offenders should do less time than street offenders, but whether they should really be treated more harshly than international terrorists and violent criminals.

The sentences given to white-collar offenders seem oddly imbalanced when compared to those given to international terrorists and violent criminals. For example, eighty-year-old Adelphia founder John Rigas received a fifteen-year sentence, and his son Timothy Rigas, the CFO of the company, received a twenty-year sentence. The white-collar sentencing figures also seem out of line when compared with many state sentences for murder, rape, robbery, and burglary, crimes that find themselves federalized when serving as predicate acts of RICO.

Podgor uses Skilling, Milliken, Ebbers and others as examples, and concludes:

Eliminating sentencing disparity is an important goal for achieving an equitable judicial process. But increasing white-collar sentences and then throwing away the key does little to benefit society. The stories show the need for a change. And hopefully this time, quantitative analysis and statistics will not drive the Guidelines down the wrong path.

The bottom line is that we need to return to individualizing the sentencing process because we do not sentence numbers—we sentence people. If we really believe that the time should fit the crime, then we need to start realizing that not all crimes and not all criminals are alike

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    The Right Measure (none / 0) (#1)
    by koshembos on Sat Feb 24, 2007 at 01:31:53 AM EST
    It's not clear to me what is the right or just sentence for major white collar criminals is. The objection also assumes that the sentences meted out to rapist and murderers are just about right.

    Is the judge saying that the worst crime is murder and since well educated and extremely well paid white males are way better than murderers (who also happen to be uneducated, poor and non-white)?

    Years ago in  the country I grow up in, "life in prison" meant a 25 years sentence. It also meant that good behavior reduced the sentence to 17 years. It's way down from what we have now.

    Seventeen years for young people is a life time. I think it was a wise policy. Our system makes absolutely no sense and is clearly driven by the lowest political/vigilanty denominator; white collar included.

    so, prof. podgor assumes (none / 0) (#2)
    by cpinva on Sat Feb 24, 2007 at 01:54:48 AM EST
    that these white-collar criminals have less of an adverse affect on society than a murderer? i beg to disagree. the 1,000's of people, from sh's to pension funds, hurt by enron far exceeds the total affected by even the worst serial killer. add to that the damage done to the financial markets, and the adverse affects on 1,000's of others indirectly, and that one event affected nearly the entire country.

    please tell me the name of the murderer that's had a correspending effect?

    Discretion aka Judging (none / 0) (#4)
    by squeaky on Sat Feb 24, 2007 at 08:47:17 AM EST
    The bottom line is that we need to return to individualizing the sentencing process because we do not sentence numbers--we sentence people..

    My take is that Podgor is suggesting that Judges do what they are supposed to do: Judge.

    in some courts the person who steals to benefit the company without personal remuneration can receive a comparable sentence to the rogue employee who cashes in his or her company stock to obtain an immediate personal profit. The accused becomes irrelevant in a sentencing world ruled by the cold mathematical calculations found in the sentencing Guidelines.

    Taking away a Judge's discretion in order to mollify the public's kneejerk plea 'tough on crime' is stupid. It is akin to mob rule, pandering to the lowest common denominator. White collar criminals have a very low recidivism rate compared to violent criminals as well.

    The popularity of these draconian sentences show how vengeful we are: more barbarian than civilized. It is no wonder that America is the biggest jailor in the world.

    Parent

    White collar and blue collar theft (none / 0) (#3)
    by RSA on Sat Feb 24, 2007 at 07:58:20 AM EST
    I think that cpinva makes a good point, though Podgor does as well.  I don't necessarily think that long sentences for embezzlement or fraud are draconian; it depends on the harm done to its victims, the motivations of the criminal, the potential for recidivism, the value of deterrence, and so forth.  Did some of the high-profile white collar criminals that we've seen in the news lately make it likely that significant numbers of people will live out their later years in poverty?  The argument, "at least the victims weren't harmed physically and can potentially recover," doesn't strike me as particularly compelling.  But on the other hand, if we say that the harm to victims should be a critical factor in sentencing, we end up with the idea that stealing from a poor person is worse than stealing the same amount from a rich person.  Do we believe this?

    I firmly agree ... (none / 0) (#5)
    by Deconstructionist on Sat Feb 24, 2007 at 08:53:20 AM EST
     ...with the part about needing to "individualize" the sentencing process-- across the board.

      I believe the overriding goal should be proportionality-- above lack of disparity (not saying that should not be a goal).

      To achieve true proportionality the sentencing process needs to consider more than objective factors which ahve been somewhat arbitrarily assigned fixed values and look at all the circumatances of the offense and all of the characteristics of the offender.

      It is perhaps easier to reach consensus as to what proportionality means within the the same class of offense than it is when comparing different kinds of offenses. I mean  we might find more people agreeing which murderer or which armed robber or which  drug dealer or which or which tax evader or which embezzler "deserves" a longer or shorter sentence than when debating whether an embezzler or an armed robber should be more harshly punished.

      For the most part, I think most people agree in the abstract that violent crimes deserve greater sentences than purely econominc offenses. A man who beats you over the head and takes $20 is viewed differently and more harshly than a man who converts  $2,000,000 of client funds entrusted to him to his personal use--despite the fact that the latter has a broader impact. Extreme harm to one person can outweigh significant harm to many.

      Even just the risk of extreme physical harm is a factor most consider highly relevant. The armed bank robber who doesn't actially harm anyone is going to be viewed differently than the embezzler by most people.

       Our current sentencing schemes recognize this and it takes a tremendous amount of loss for non-violent larceny related crimes to approach the typical sentences for violent crimes.

       Illustrating, using the federal sentencing guidelines the base offense level for robbery is 20 while the base offense for non-violent larceny/fraud type offenses is 6 or 7. At the most reductionist level, assuming we have two first time offenders and no other specific offense characteristics or other adjustments including AOR involved (admittedly a rare situation), a person who robs you of $20 simply by threat or intimidation without a weapon is looking at sentencing range of 33-41 months while the embezzler who takes $9999 is eligible for straight probation and the max guideline sentence is 6 months. This is comparing offenses at the very bottome level of their respective categories.

       Still assuminmg the lack of SOC or adjutments not described  and comparing in the  "mid-range" levels, a robber who brandished a weapon and threatened to kill you  but only hit with his fist  causing you to suffer a concussion, the offender would lilely be looking at a sentnce of 108 months to 135 months for that same $20. an embezzler who took $19,999,999 could be looking at as little as 78-97 months.

        To go higher than that an embezzler or perpetrator of fraud needs some of the following factors: HUGE amounts of money stolen; a great  have many victims; and/or certain other factors involved (look at § 2B1.1 of the guidelines.

      A robber on the other hand could go as high as level 38 even if no one suffered more than a minor injury and he got away with only $20. For a first-time offender,  38 establishes a sentncing range of 235-293 months.

       Now, its important to remember STATUTORY maximums-- for routine robbery that is "federalized" only because it occurred in the territorial jurisdiction of the United States (e.g., on federally owned or controlled property) the statutory maximum per count of conviction is 15 years-- but one can sometimes be charged with multple counts if he takes money or from more than one person in the same incident). that can reduce the disparity between the small robbery and large financial crime.

       On the other hand, we have to remember theprevalence of plea bargaining and also its limits. both classes of offenders can and frequently do cut deals that shave considerable time off the maximum exposure, but the ability of the embezzler of fraud perpetrator to reduce time is greater than for the robber in most instances. Robberies often have simple facts which cannot be obscured at sentencing in a manner designed to reduce enhancements under the guidelines but financial offenses are often complicated giving the ability to "fudge" the facts presented to the court which will be used to determine the guideline range. Furthermore, substantial assistance motions can be more likely in complex cases because often more people are involved and a particular defendant can get a sentence reduction (often very large) by ratting on others and sometimes just by telling the feds where the defendant has hidden his own  large sum of stolen money so it can be recovered. Robbers sometimes but less frequently have this opportuity.

       All of this ia a (too) long way of poinitng out that "white collar" criminals generally have to try really really hard to get "draconian" sentences. It is necessary to steal huge sums of money and engage in other wrongful conduct and then deny responsibility, refuse to cooperate, get convicted despite being able to afford a first-rate defense and even then sometimes refuse to disclose information priior to sentencing.

     

    the potential for recidivism (none / 0) (#6)
    by hellskitchen on Sat Feb 24, 2007 at 08:55:28 AM EST
    RSA's inclusion of recidivism is an important point.  One of the issues in committing crime, white collar or not, is the intention and premeditation of the criminal.  

    Over the years, one of the objections to the light sentences that white collar criminals used to get was the fact that it was a "slap on the wrist."  It's not unlike the ethical and legal violations of people involved in politics where, when caught, they immediately claim substance abuse and turn themselves into a clinic.  

    I submit that white collar crime is one where the likelihood of premeditation is almost assured.  These people know what they're doing - they're knowingly lining their pockets at the public's or stockholders' or employees' expense.

    good point (none / 0) (#7)
    by Deconstructionist on Sat Feb 24, 2007 at 09:03:48 AM EST
      That also raises the fact that "white collar" convictions often involve a large number of discrete acts which occurred over a long period of time but can result in a single or few counts of conviction. Yet, for a "first offender" he is in criminal history category I. Obviously, a great many street criminals have committed other crimes before but for the person who is caught in his first effort (not all that rare because the planning is often atrocious) will be viewed the sam in criminal history as the executive whose crime involved multiple transactions to take, transfer, conceal, etc. money over a period of years and years.

     

    Companies affect large swaths of people (none / 0) (#8)
    by lilybart on Sat Feb 24, 2007 at 09:16:57 AM EST
    and since you cannot punish a corporation except with monetary damages, someone has to be responsible when large numbers of people are defrauded,

    AND let's not forget the HUGE salaries and other perks these guys get. For what? For the huge responsibility they take on as CEO. These guys are well paid for the tough job of keeping their business dealings honest. Too f-ing bad if they have to go to jail for 20 years. They might have more heat, medicine and food then the poor people whose pensions are gone.

    I hadn't noticed white collar scammers (none / 0) (#9)
    by kindness on Sat Feb 24, 2007 at 11:25:12 AM EST
    getting heavy prison sentences.

    Maybe I'm just blinded by my views of things but it sure seems like they're still giving less time to white collar types than other offenders.

    Perspective.  Look at the Enron type stuff.  The heads of that company should have all been locked up for a long time for all the damage they caused municipalities, retirees, & company employees (not to mention all us taxpayes who covered their butts).

    what about the deterrent value? (none / 0) (#10)
    by lawstudent on Sat Feb 24, 2007 at 12:50:38 PM EST
    isn't there something to be said about the deterrent value of punishment?  correct me if i'm wrong, but i believe that studies have shown the minimal deterrent value of jail time on murderers and rapists.  

    i would think the deterrent value might be much greater amongst white collar criminals, and therefore, these so-called "draconian" sentences may be justified.  i would bet that many a ceo lives in fear of being the next bernie ebbers or kenneth lay.  but maybe i'm naive?

    Yes, but (none / 0) (#13)
    by squeaky on Sun Feb 25, 2007 at 02:11:04 PM EST
    The white collar criminals expect that they will never be caught.

    Parent
    A little context (none / 0) (#11)
    by Abdul Abulbul Amir on Sat Feb 24, 2007 at 06:08:24 PM EST
    Brigitte Mohnhaupt, 57, might be released in late March after serving 24 years of a life sentence for multiple murders, the Stuttgart state court ruled.

    Five life terms plus 15 years in Germany for multiple premeditated assassinations comes down to only 24 years.  

    http://www.yorkdispatch.com/nationworld/ci_5211451


    well one of the few good things (none / 0) (#12)
    by Deconstructionist on Sun Feb 25, 2007 at 09:45:47 AM EST
      about our federal sentencing regime is that the sentence imposed bears a close relationship to the sentence served so that the lay person can understand what it actually means.

      With the exceptions of very limited "good time" credit from BOP(only 57 days per year) and a modest reduction sometimes available for successful completion of an intensive drug treatment program (essentially can knock a max imum of a year off a sentence regardless of its lenghth), people serve the sentence announced by the judge. (good time is approximately 15%).

       Many state systems (and as pointed out foreign ones) require service of terms that bear little relation to the announced sentence and ones that only people familiar with all of the laws and all of the particular facts of a case can decipher.

       That's why we hear about judges announcing sentences that seem bizarre. For example, we hear "396 years" and think "overkill" but the judge is actually imposing 4 consecutive 99 year sentences each of which is subject to possible parole after a 1/4 of the term so the judge is merely seeking a term of years to make eventual release impossible and if he imposed "99 years" the guy would eligible for release in 24 1/4.

     

    Wake me up..... (none / 0) (#14)
    by kdog on Mon Feb 26, 2007 at 09:24:19 AM EST
    when everybody in a cage for distributing a plant have been pardoned...then I'll worry about common thieves getting fair sentences.  All other reform needs pale in comparison to the need to end this drug war foolishness.