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White-collar financial fraud sentencing: under siege from critics

As we have often noted, prosecution in financial fraud cases is typically zealous and seemingly overwhelming in the resources and efforts expended by government investigators and law enforcement agents.

Consequently, such cases in California and elsewhere across the country -- matters involving white-collar charges such as securities fraud, insider trading and Ponzi schemes -- can be tremendously complex, with a strong need for a criminal suspect to secure proven legal counsel at the earliest opportunity.

One area central to so-called economic crimes that is under a strong media glare presently is sentencing, which has percolated to the top of agenda lists for a number of criminal law commentators and participants.

Here’s what has been troubling a growing legion of critics concerning many sentencing outcomes in white-collar crime cases: Under sentencing guidelines first announced back in 1987 and still sought for guidance by federal judges, an alleged overweighting of a factor relating to financial loss is obscuring other relevant considerations. The result is an unduly harsh sentencing outcome in many cases that strikes an increasing number of people as being both unfair and illogical.

Those people -- strong critics of the guidelines -- include far more mere complainers who have suffered adverse results as a result of guideline applications. They include many federal judges, thousands of defense attorneys, and even the American Bar Association.

That latter entity is strongly pushing for change promoting sentencing outcomes that are consistently more rational and even-handed. It is staunchly supported by courts across the country, with one judge stating that there is a “widespread perception” that the guidelines are broken and “fundamentally flawed.”

A fellow jurist, New York U.S. District Judge Jed Rakoff, calls for more than slight adjustments to the sentencing guidelines. Rakoff says they should be flatly eliminated, given that “the amount of the loss does not fairly convey the reality of the crime or the criminal.”

Source: Reuters, "U.S. commission reviews white-collar sentences," Nate Raymond, Sept. 17, 2013

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