Fit the Crime Project
Examples of Inadequacy of Sentencing Guidelines:
When it comes to sentencing offenders convicted of certain white collar crimes, judges,
law professors, and former prosecutors have some very harsh words for the sentencing
guidelines that judges are supposed to use to calculate their punishment. “A black stain
upon common sense,” complains one judge about the sentencing rules. Another, a
former federal prosecutor, laments “the utter travesty of justice that sometimes results
from the guidelines’ fetish with absolute arithmetic.” A former prosecutor characterizes
the rules governing high-end federal white-collar sentences as “now completely
untethered from both criminal law theory and simple common sense.”
Judges are so frustrated with these unhelpful guidelines that they often simply discard
them as useless in a growing number of cases. Even the Department of Justice (“DOJ”)
has thrown up its hands about white collar sentences, complaining that they have “lost
their moorings” from guidelines that fail to guide. The cases below demonstrate how
malleable the fraud guidelines are and what can happen when prosecutors try to exploit
them.
Sholom Mordechai Rubashkin, CEO of Agriprocessors
Crime: Financial fraud
Guideline sentence initially sought by prosecutors: Life without parole
Sentence handed down by judge: 27 years
Prosecutors have been known to manipulate the fraud guidelines to seek life sentences
once reserved for the worst offenders: murderers, terrorists and serial rapists.
In April 2010, six former U.S. Attorneys General from both political parties, joined by
more than a dozen former federal prosecutors, wrote to a federal judge in Iowa
opposing the recommended guideline sentence for Sholom Rubashkin, CEO of
Agriprocessors, who had been found guilty in a high profile case of financial fraud. They
were moved to make their extraordinary request because Rubashkin, a first-time, nonviolent offender with numerous mitigating factors in his defense, was facing life without
parole under the United States Sentencing Guidelines. The government backed down ,
and in June 2010, at the age of 51, Rubashkin was sentenced to 27 years in prison, still
an exceptionally long sentence for a fraud conviction of this nature.
Raj Rajaratnam, founder of The Galleon Group
Crime: Insider trading
Sentence recommended by guidelines: 235-293 months
Sentence handed down by judge: 11 years (132 months)
Judges often balk at the guideline sentences in economic crime cases, which can
skyrocket to absurd lengths. The insider trading case against billionaire hedge fund
founder Raj Rajaratnam made headlines around the world. Before Rajaratnam's case
ever went to trial, preliminary reports suggested he was facing a maximum sentence of
145 years. In May 2011, Rajaratnam was found guilty of 14 counts of conspiracy and
securities fraud. Federal prosecutors requested a guideline sentence between 235 and
293 months. His defense team opposed the request by pointing out that the "average
sentence imposed for manslaughter in 2010 was 73 months; for kidnapping and
hostage-taking, 163 months; for sexual abuse, 109 months; for robbery, 77 months; for
arson, 79 months and for child pornography, 118 months.” The judge sentenced
Rajaratnam to 11 years, then the longest-ever sentence handed down for insider
trading.
James Gansman, Partner at Ernst & Young LLP
Crime: Insider trading
Sentence recommended by guidelines: 41-51 months
Sentenced handed down by judge: 1 year and 1 day
Judges have expressed their frustration with sentence escalation while at the same time
imposing lower sentences to reflect a sentence that better accounts for culpability and
addresses the purposes of sentencing. A partner at the accounting firm Ernst & Young
LLP, James Gansman was convicted of insider trading in May 2009. Prosecutors
alleged that over the course of two years, Gansman told a woman with whom he was
having an affair about pending mergers and acquisitions his firm was facilitating. The
woman, who made roughly $390,000 off Gansman's tips, cooperated with the
government and received probation. Gansman fought the insider trading charges and
lost. Under the guidelines, he would've faced a prison sentence of at least three years
and five months. The judge sentenced him to one year and a day.