Tribune Editorial: White Collar Sentencing Disparaties Keep Widening


aaron-rubashkin-and-shalom-mordechaiThe following editorial appears in The Chicago Tribune:

Sholom Rubashkin committed an outrageous bank fraud, so he deserves a stiff penalty. A federal judge in Iowa has promised to give it to him: On Tuesday, she said, the 51-year-old former meatpacking executive convicted in a jury trial at the end of 2009 will receive a prison term of 27 years.

A co-defendant who cooperated with prosecutors – also a supervisor at Agriprocessors Inc. – recently got a sentence of three years and five months.

There’s the rub.

Americans are in no mood to coddle white-collar criminals, especially after the financial-industry meltdown, the devastating Gulf oil spill and a spate of Ponzi schemes headlined by the notorious Bernard Madoff.

Yet from judge to judge and jurisdiction to jurisdiction, disparities in punishment for corporate crime keep widening. Even within the same case, sentences can range all over the place.

The differing treatment stems in part from federal laws rewritten over the past decade to stiffen penalties, and partly from the uneven use of discretion among prosecutors and judges across the country. The resulting mish-mash should offend everybody’s sense of fairness. And, unfortunately, it’s difficult to fix in a system that also tries to give judges discretion.

The Agriprocessors case began in May 2008 with a massive immigration raid involving hundreds of arrests at the kosher slaughterhouse and packing plant at Postville in northeast Iowa. In the aftermath, financial records surfaced showing that Rubashkin had misled his lenders, ultimately costing them $26.8 million, U.S. District Judge Linda Reade has ruled.

Rubashkin was more culpable than his co-defendant Yomtov “Toby” Bensasson, but was Rubashkin eight times more culpable, as his sentence would suggest? And what about the year-and-a-day prison term imposed recently on a Missouri mortgage executive whose fraud cost his financial company roughly the same amount as bankers lost in the Rubashkin case?

Earlier this year, a West Coast federal appeals court affirmed a 25-year sentence for a $40 million fraud, while an East Coast defendant got five years in a $1 billion fraud.

Lawyers often speak of a “trial penalty,” and there’s no doubt Rubashkin paid a high price for testifying in his own defense. He must have known it was coming when prosecutors obtained a 163-count indictment against him: Clearly, the government was throwing the book at him. Charging defendants with so many crimes increases the potential punishment, and provides a huge incentive for them to cut a deal. The government needs to wield that club – piling on charges – with great discretion.

Also helpful would be mandatory minimum sentences for serious economic crimes, to prevent cooperating witnesses from getting off with relative wrist-slaps. We’re also dubious about basing sentences on economic loss calculations; in many complex white-collar cases, the numbers are speculative and lead to uneven sentencing results.

Attorney General Eric Holder Jr. last month issued new guidelines for charging and sentencing that address “unwarranted disparities.” But the plea to his prosecutors for consistency goes only so far, notes Ohio State University law professor Douglas Berman: “He’s being candid, but it’s not likely to reduce the disparities.” Jawboning isn’t reform.

What’s needed is for Congress and the U.S. Sentencing Commission, an agency that suggests federal penalty levels, to develop a more sophisticated set of guidelines for white-collar crimes. That’s probably a long way off, and unlikely to affect the nation’s current crop of Sholom Rubashkins.

{Chicago Tribune}

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