The Challenge of Sentencing White-Collar Criminals

A challenge every federal judge faces is deciding the appropriate punishment for a white-collar defendant.

How much should a court take into account the background of these defendants who may not have previously run afoul of the law and are unlikely to commit additional crimes?

Judges have broad discretion under federal sentencing law. A court must consider the seriousness of the crime and the need to deter criminal conduct, protect the public and avoid unwarranted sentence disparities among similar defendants. But judges do not have complete autonomy to decide what the sentence is.

A recent decision by the 10th U.S. Circuit Court of Appeals highlights the competing views on determining an appropriate punishment for white-collar criminals. In United States v. Sample, the appeals court overturned a sentence of probation for a defendant who defrauded investors of more than $1 million after pleading guilty to mail and wire fraud charges.

The recommended sentence for Matthew Sample’s crimes was well over five years. The sentencing judge, though, thought it better that Sample stay in his job with a six-figure salary than go to prison. The judge said, “I want you to keep your job, because I want you to have a good job to pay these victims back.”

The 10th Circuit ruling rejected that reasoning. It noted that “we are puzzled by the court’s implicit suggestion that if the defendant were poor and unemployed, he might get a prison term.” The appeals court found that relying on a defendant’s wealth as a basis for reducing a sentence was improper, writing that pointing to Sample’s salary “as overriding all other sentencing considerations exceeded the bounds of permissible choice.”

Restitution is a permissible consideration in setting the punishment, but the judges in the Sample case did not want it to appear that economic considerations trumped the need to extract retribution for misconduct.

As the 14-day sentence given to George Papadopoulos, a former adviser to President Donald Trump’s campaign, highlights, a short sentence may not reflect the impact of a defendant’s misconduct.

The government pointed to the need for deterrence in pushing for up to a six-month prison sentence for Papadopoulos. Prosecutors argued that others in a similar position could view a sentence of probation for lying to the government as being akin to a speeding ticket. The special counsel’s office said his “crime was serious and caused damage to the government’s investigation into Russian interference in the 2016 presidential election.”

The defense, on the other hand, asked for a term of probation that would end at the conclusion of Papadopoulos’ sentencing hearing. His lawyers portrayed him as a pawn in a much larger case. They claimed that “to say George was out of his depth would be a gross understatement.” They argued that he “has already served the equivalent of one year of probation” because he had been under court supervision since his arrest in 2017, and that the cost of being a felon would be felt for the rest of his life.

In the end, Papadopoulos received a sentence that will cost him only two weeks behind bars, a $9,500 fine and community service.

Assessing the effect of the misconduct can be difficult when the government, not an individual, is the victim. Prosecutors must act as the reflection of the community, but it can be difficult to articulate the impact of that harm.

The sentencing of Paul Manafort, the former chairman of Trump’s campaign, will highlight how prosecutors often focus on victims other than the government in seeking a prison term.

Manafort was convicted of five counts of tax fraud, two counts of bank fraud and one count of failing to disclose a foreign bank account. Unlike tax charges, which many slough off as a product of an unfair system, misleading a bank can result in a significant prison term. Bank fraud has the potential to harm a financial system supported by federal deposit insurance, and thus put taxpayers at risk of bearing any losses. Prosecutors will likely point to those convictions as the basis for imposing a substantial punishment.

The defense is likely to counter that Manafort was unfairly singled out by Robert S. Mueller III, the special counsel, and that the court should sentence Manafort to probation or, at most, a short period of incarceration.

Judge T.S. Ellis III, who presides over the case in U.S. District Court, could be sympathetic to that argument. He displayed a fair measure of hostility toward prosecutors from Mueller’s office during the trial.

White-collar defendants often have more in common with the federal judge who will sentence them than most criminals do. They can often plausibly argue for no jail time, or only a short sentence, so that they can return to being productive members of society.

One reason Congress created the U.S. Sentencing Commission to adopt the federal sentencing guidelines was to eliminate the disparity between white-collar offenders and those who commit street crimes. How much punishment should be imposed, though, remains a difficult issue. White-collar defendants can often point to a life largely free from criminal conduct and can generate letters from family and friends attesting to their generosity and good works — something that is not likely to come up in sentencing a drug trafficker.

There is a lower threat of recidivism, and thus future harm to the community, among white-collar criminals, according to the U.S. Sentencing Commission. That can make them more sympathetic, which often leads to lighter sentences. Whether we see that in future sentences for those caught up in the special counsel’s investigation bears watching to see if judges will give mild sentences to first-time offenders.