The federal sentencing guidelines for white collar crime are in dire need of revision. Defense attorneys argue that the guidelines don’t reflect their clients’ culpability, character, or intent, and judges increasingly decline to use them when meting out punishment. In 2011, the Department of Justice acknowledged the problem with white collar sentencing guidelines, noting that they had “lost the respect of a large number of judges” and needed to be reformed.
White collar sentences are similar to federal drug sentences, but instead of relying on drug quantity to determine a sentence, white collar guidelines use monetary loss. In both cases, considerations bearing on culpability, such as harm, motive, and mitigating circumstances hold almost no sway. With Congress poised to reform drug sentencing, the next logical step is tackling the guidelines for economic crimes. It’s increasingly likely that the U.S. Sentencing Commission will do exactly that during its next session. In anticipation of this opportunity, Families Against Mandatory Minimums (FAMM) announces the launch of the “Fit the Crime” project. This project will raise awareness about the shortcomings of the current fraud guidelines and possible reforms.
What’s wrong with the current sentencing guidelines?
The current guidelines strive to be a model of objectivity and efficiency. They advise judges to calculate a sentence based on the charges; so-called “relevant conduct” which can include uncharged, dismissed or even acquitted conduct; the actual or intended financial loss (whichever is higher); a list of “specific offense characteristics” and additional “adjustments.” These categories make determining a sentence as easy as simple arithmetic. Too easy. In reality, the equation doesn’t distinguish between small fries and masterminds, successful plots and failed ones, malicious schemes, delusions of grandeur, or even well-meaning but ultimately illegal attempts to keep a failing company—and its employees—afloat.
Unsurprisingly, neither judges nor plaintiffs have responded well to replacing a human with an abacus. After Hedge fund manager Raj Rajaratnam was convicted of insider trading in 2011, prosecutors sought a sentence of between 20 and 25 years, which they arrived at using the current sentencing guidelines. Had Rajaratnam been sentenced according to the federal prosecutor’s preference, he would have faced a prison term four times longer than the average sentence for manslaughter, and nearly twice as long as the average sentence for hostage-taking or kidnapping. But the judge overseeing the case varied from the guidelines, sentencing Rajaratnam to 11 years. At the time, this “lighter” sentence was not only the longest ever handed down for insider trading, it exceeded the average federal sentences for manslaughter, sexual abuse, armed robbery, and arson.
FAMM’s proposed reforms for the white collar sentencing guidelines are rooted in a desire to restore proportionality to the sentencing process, trim the costs of America’s prison system, preserve public safety, and make rehabilitation and reintegration possible and quick.
A 2013 report from the American Bar Association task force, in which FAMM participated, identified a range of factors that should influence a more balanced sentence. It suggests replacing the number crunching that currently mars the guideline with an examination of such things as motive, amount of real loss, amount of defendant’s gain, harm to victims, extenuating circumstances, role of the defendant and mitigating circumstances.
Additionally, FAMM’s Fit the Crime project advocates sentencing guidelines that provide for punishment other than prison for first-time, nonviolent offenders whose crime is not otherwise serious. For these offenders and many others, a federal conviction carries collateral consequences—loss of state-issued licenses, ineligibility to work in various industries, damage to reputation, family and social networks—that serve no public safety purposes and are themselves a form of punishment.