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March 01, 2015

Reforms needed for sentencing guidelines for economic crimes

ABA Criminal Justice Section Chair James E. Felman urged the U.S. Sentencing Commission during a March 12 hearing to improve on the proposed amendments to its sentencing guidelines for economic crimes.

As “the result of endless upward ratcheting,” Felman said, guidelines for high-loss economic crimes point to long or life sentences without parole, regardless of the defendant’s past criminal history.

Felman, who is also the ABA’s liaison to the commission, noted the disparity in sentencing among judges, as some opt to impose lower sentences while others follow the guidelines more strictly. “To some, this looks like the disparity the guidelines were created to avoid - a regime in which the punishment turns as much on the philosophy of the sentencing judge as it does on the facts of the offense,” he explained. 

In 2011 the ABA adopted a resolution calling for a review of the commission’s guidelines and urging less reliance on loss as the primary factor in sentencing decisions. The policy highlights the findings from both the ABA and the commission showing that loss “may substantially overstate the seriousness of the offense,” Felman said.

Felman said the ABA is pleased that the commission decided to review the guidelines and agrees with the commission that the guidelines need to be fixed. He stressed, however, that the proposed amendments are not sufficient to address the current problems and that they still over-emphasize the use of loss as a sentencing factor.

Felman urged more emphasis on mens rea and motive, the monetary gain of the defendant, and “other circumstances that better reflect the culpability of the offender and the severity of the offense.” He also said the guidelines should provide for the possibility of a non-prison sentence for first offenders.

The ABA policy adopted in 2011 also urges consideration of the defendant’s actual or intended gain in sentencing.

“There is a difference in culpability between an employee who goes along with a fraud simply to keep his job…and an employee who conceives and executes a fraud with the purpose of putting the proceeds of it into his pocket,” Felman explained.

The association also suggests simplification of the guidelines to reduce upward adjustments to sentencing. Under the current guidelines, a fraud that resulted in $100 loss to each of 300 victims could potentially result in a sentence that is double that of a fraud that caused a $30,000 loss to one person.

Felman noted the work of the Criminal Justice Section Task Force on the Reform of Federal Sentencing for Economic Crimes, which consisted of professors, judges, practitioners, organizational representatives, and observers from the Department of Justice and the Federal Defenders.

The task force presented a draft of its findings to the commission in Fall 2013. The final report, issued in November 2014, includes the following recommendations:

     •diminished weight placed on loss;

     •elimination of loss as a factor that is “intended” rather than actual; and

     •introduction of “culpability” as a measure of severity, which would allow consideration, among other things, of the defendant’s motive, gain and organization.

During the hearing, the commission also heard testimony from judges, federal public defenders, and representatives from advisory and advocacy groups.

The commission is scheduled to submit its proposed amendments to the guidelines to Congress in May.

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