ABA task force report addresses harsh penalties for economic crimes
A report released Tuesday by a task force of the ABA Criminal Justice Section addresses concerns that penalties for federal financial crimes are too harsh, especially when losses are high.
The task force proposal (PDF) puts less emphasis on losses and more emphasis on culpability—including the defendant’s motive, the correlation between the amount of loss and the amount of the defendant’s gain, the degree to which the offense and the defendant’s participation was sophisticated or organized, the duration of the offense, and whether the defendant took steps to mitigate the harm.
The ABA proposal also considers victim impact, including the significance of the loss to the victims and their vulnerability.
The report offers case scenarios to illustrate the differences between the current U.S. Sentencing Guidelines and the task force proposal.
In one scenario, a defendant who enticed 14 elderly persons to pay “fees” up front to win a nonexistent lottery award qualified for a higher sentence under the ABA proposal. Six of the victims in the hypothetical lost their life savings. The defendant’s culpability is high, as is the victim impact, given that six lost their life savings, the report explains.
But in a second scenario, the ABA’s proposal resulted in a lower sentence for a business owner who fell on hard times and gave false information to his line-of-credit lender about inventory and accounts receivable. The businessman had liquidated his personal assets to contribute to the faltering business, putting more money into the business than he took out in compensation, according to the hypothetical. The lender was left with a loss of about $6.9 million.
The businessman defendant received a low culpability score under the ABA proposal because he had a less culpable motive, he had zero gain and there were extenuating circumstances. Also, the victim impact was low, but not minimal, under the ABA proposal because there was a single, institutional victim.
Task force reporter James Felman said in a press release that the report has been submitted to the U.S. Sentencing Commission.
“Various judges have described the current guideline as being patently absurd on their face, a black stain on common sense, and of no help,” Felman said. “The guidelines routinely call for life without parole for first time non-violent offenders. In response, the task force drafted a better guideline.”
The formal name of the task force is the ABA Criminal Justice Section’s Task Force on the Reform of the Federal Sentencing Guidelines for Economic Crimes. The task force was made up of five law professors, three judges, six practitioners, representatives from the National Association of Criminal Defense Lawyers and Families Against Mandatory Minimums, and observers from the U.S. Justice Department and Federal Defenders.
Related article:
ABAJournal.com: “Sentencing Commission to consider penalties for economic crimes”
