On April 9, 2015, the U.S. Sentencing Commission voted to amend economic crime guidelines and to change the drug quantity table to account for the rescheduling of hydrocodone.
The response from defense lawyers and others concerned with fair and reasonable sentencing has been one of recognition of a step in the right direction with considered reservations that these reforms do not go far enough.
In its press release concerning the proposed amendments, the Commission said it “voted today to adopt changes to the fraud guideline to address longstanding concerns that the guidelines do not appropriately account for harm to victims, individual culpability, and the offender’s intent.”
While the Commission also voted to change the drug quantity table for hydrocodone, it was the changes to the white collar sentencing guidelines that drew the bulk of the attention in the legal community. That’s because the Commission voted to change the victim enhancement in the fraud guideline to de-emphasize financial losses in the sentencing process—a process that has historically drawn severe criticism from defense attorneys and some judges because strict emphasis on financial losses has produced unfair sentences, even some of life imprisonment.
“We found through comprehensive examination that the fraud guideline provides an anchoring effect in the vast majority of cases, but there were some problem areas, particularly at the high-end of the loss table,” said Chief Judge Patti B. Saris, chair of the Commission. “These amendments emphasize substantial financial harms to victims rather than simply the mere number of victims and recognize concerns regarding double-counting and over-emphasis on loss.”
The Commission also softened the approach to determine which offenders are eligible to receive a reduced sentence as a minor or minimal participant in an economic crime:
“This change is intended to encourage courts to ensure that the least culpable offenders, such as those who have no proprietary interest in a fraud, receive a sentence commensurate with their own culpability without reducing sentences for leaders and organizers,” Saris said.
David Debold, a partner with Gibson, Dunn & Crutcher, expected more from the Commission but said the changes made on balance “tend to make sentences more fair [in fraud cases]. They make punishment better reflect the harm that defendants actually intended. That’s an important change, and a good one.”
While the U.S. Justice Department said the new definition of “intended loss” would encourage defendants to claim they never intended to financially harm anyone, the Department did welcome the change that now focuses on the actual harm inflicted.
The Justice Department’s concerns about the new “intended loss” definition miss the mark. The purpose of a trial is to determine liability while the purpose of sentencing is to determine culpability. As Sentencing Guideline § 1B1.3 has long provided: “ … the principles and limits of sentencing accountability … are not always the same as the principles and limits of criminal liability.” This is particularly true in cases involving more than one conspirator in a massive fraud scheme. While all the conspirators may be held criminally liable by the jury, the guidelines should permit the sentencing judge to determine which conspirators are more accountable in order to proportion the sentences appropriately for each conspirator.
The new changes do significantly alter the economic crime guidelines. Attorney Alan Ellis eloquently explains:
“ … [the less culpable] conspirator A can only be held accountable for the acts of [the more culpable] conspirator B where (1) B’s acts were within the scope of criminal activity that A agreed to jointly undertake, (2) B’s acts were in furtherance of that criminal activity, and (3) B’s acts were reasonably foreseeable in connection with that criminal activity. The first criterion, which now has been added to the guidelines, clarifies that within conspiracies, each co-conspirator should only be held accountable for conduct that he actually agreed to jointly undertake with other conspirators.”
With respect to determining mitigating roles in economic crime conspiracies under § 1B1.2, which provide a downward departure for minor or minimal participants in a conspiracy, the new changes would allow sentencing courts to look only at the culpability of the conspirators involved in the case before the court, not defendants in “similarly situated” other cases. This should markedly increase the current dismal 6.9 percent downward departure rates currently awarded and reduce litigation on the issue in the appellate process.
It has never been easy to assess individual culpability in multiple offender crimes. These new changes proposed by the Commission, which will be submitted to Congress on May 1, 2015, and will automatically become law on November 1, 2015 if lawmakers fail to act on them, will make culpability determinations easier, and fairer.
While we may not think the reformations go far enough, especially concerning the still draconian upward adjustments that are made with the still intact loss table, the steps made by the Commission are a step in the right direction and reflect a growing understanding of the absurdity of some of the guideline provisions. That is indeed a good thing.