BLOG BULLETS:

• Recent Sentencing Commission statistics reflect that probably close to half the contested sentences in fraud and theft cases in the last fiscal year were below the guidelines.
• A former government prosecutor who used to be a strong supporter of the guidelines has published numerous scholarly articles strongly criticizing the theft/fraud guideline since leaving the Department of Justice.
• Several district court opinions contain language strongly criticizing the theft/fraud guideline’s overemphasis on loss.

 

NOW THE BLOG:

A couple months back, an e-mail got circulated on one of the listserv’s I’m on with a link to a two-page Quick Facts publication by the Sentencing Commission on the theft, property destruction, and fraud guideline – § 2B1.1.  The e-mail provided a link to the Sentencing Commission website, but since I don’t entirely trust links to websites, I’ve downloaded the publication and I’m directly linking it for you here.

There’s a number of statistics in this publication, but the one I like is the one on the percentages of sentences within the guideline range and the percentage of sentences below the guideline range.  In the last fiscal year, less than half of the sentences under this guideline (46.1%) were within the guideline range and over a quarter (28.6%) were what the Sentencing Commission calls “non-government sponsored below range sentences.”  In other words, over a third of contested sentences under this guideline were below the guideline range (assuming that above guidelines sentences are minimal).  And this number is even more dramatic if you consider that a significant number of theft and fraud defendants don’t need to argue for a below guidelines sentence because they’re in ranges that require either no confinement at all or just home detention or community confinement.  The publication doesn’t give us the percentage of defendants in these ranges, but it does note that 50% of the 2B1.1 offenses involved loss amounts of $120,000 or less, and we know that anything below $70,000 (now $95,000; see last week’s post about that) puts a first offender into the home detention/community confinement range, at least with no other enhancements and credit for acceptance of responsibility.

This triggered a desire on my part to share some of the arguments that can be used to attack the theft/fraud guideline.  (I’m leaving out property destruction since that comes up only rarely.)  I did summarize the arguments briefly as one example of what we sometimes call “deconstruction” of the guidelines back in December 2013 (see “Deconstruction and Reconstruction of the Sentencing Guidelines Part 4: Some Examples of Deconstruction,” in the December 2013 link at the right), but (1) it was just one of several examples in that post; (2) I thought it was worth sharing in a little more detail; and (3) sharing it again, in more detail, seems timely in light of these recently published statistics.

The two main attacks on the guidelines are its history of, at least until recently, being consistently increased and increased and increased and its excessive emphasis on loss – or, worse yet, “intended loss.”  The first of these concerns has engendered scholarly criticism from a former government prosecutor named Frank Bowman who formerly was a fervent supporter of the guidelines and has since become almost completely disillusioned.  He’s expressed his criticism in multiple law review articles in which he noted the Sentencing Commission had “tweaked the theft and fraud guidelines nearly annually,” with the tweaks always “tend[ing] to increase guideline sentence levels,” without any empirical support.  Frank Bowman, Pour Encourager les Autres?  The Curious History and Distressing Implications of the Criminal Provisions of the Sarbanes-Oxley Act and the Sentencing Guidelines Amendments that Followed, 1 Ohio St. J. Crim. Law 373, 387 (Spring 2004).  See also Frank Bowman, The 2001 Federal Economic Crime Sentencing Reforms: An Analysis and Legislative History, 35 Indiana L. Rev. 5 (2001); Frank Bowman, Coping with ‘Loss’: A Re-Examination of Sentencing Federal Economic Crimes Under the Guidelines, 51 Vanderbilt L. Rev. 461 (April 1998).  Bowman has characterized the guidelines generally as a “one-way upward ratchet,” Frank Bowman, The Failure of the Federal Sentencing Guidelines: A Structural Analysis, 105 Colum. L. Rev. 1315, 1319-20 (2005), with the theft/fraud guideline being one of the poster children for that problem.

The second problem is that the theft/fraud guideline is driven far too much by “loss.”  In a way, this is understandable, because “loss” is something to which it’s easy to attach a number, which is of course what the guidelines are all about.  But letting that control the sentence to the exclusion – or near exclusion – of other considerations leads to results which are often, if not always, absurd.  And on this point, you have federal judges joining in the criticism.  As one district judge explained it:

The Guidelines place undue weight on the amount of loss involved in the fraud.  This is certainly a relevant sentencing factor: all else being equal, large thefts damage society more than small ones, create a greater temptation for potential offenders, and thus generally require greater deterrence and more serious punishment.  But the guidelines provisions for theft and fraud place excessive weight on loss, attempting – no doubt in an effort to fit infinite variations on the theme of greed into a limited set of narrow sentencing boxes – to assign precise weights to the theft of different dollar amounts.   In many cases, . . . , the amount stolen is a relatively weak indicator of the moral seriousness of the offense or the need for deterrence.

United States v. Emmenegger, 329 F. Supp. 2d 416, 427 (S.D.N.Y. 2004).  See also United States v. Adelson, 441 F. Supp. 2d 506, 509 (S.D.N.Y. 2006) (noting that guidelines, “because of their arithmetic approach and also in an effort to appear ‘objective,’ tend to place great weight on putatively measurable quantities, such as . . . the amount of financial loss in fraud cases”).  In stronger language, judges have spoken of an “inordinate emphasis . . . on the amount of actual or intended financial loss,” Adelson, 441 F. Supp. 2d 506, 509 (S.D.N.Y. 2006), and “the utter travesty of justice that sometimes results from the guidelines’ fetish with absolute arithmetic,” United States v. Parris, 573 F. Supp. 2d 744, 751 (E.D.N.Y. 2008) (quoting Adelson, 441 F. Supp. 2d at 512).

So now you have three arguments why the judge should refuse to follow the theft/fraud guideline.  First, other judges are refusing to follow it in well over a third – maybe even close to half – of the contested cases before them.  Second, a respected former guidelines supporter and commentator recognizes the guideline has an upward bias.  Third, the guideline – for very human and understandable reasons – focuses far too much on the one thing that’s easy to quantify – loss.