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DOJ Objects to White Collar Crime Sentencing Reform


New York residents may have seen media reports concerning a number of proposals made by a federal panel that would change the way penalties are calculated for white collar crimes such as fraud and embezzlement. While defense attorneys have criticized the proposed reforms for not going far enough, the U.S. Department of Justice has come out against the measures. The department made its views known by releasing a letter during a March 12 U.S. Sentencing Commission hearing.

One of the key proposals would change the way that the losses of fraud and other white collar crime victims are calculated. The panel suggested adjusting losses for inflation, which has not been done since 1987. The losses incurred by victims influence sentence recommendations, and observers say that this step would reduce the average fraud sentence by 26 percent. Another proposal the DOJ is unhappy with would reduce stock fraud penalties by basing sentences on financial gains reaped by the defendant rather than investor losses.

The DOJ assert that reducing the penalties for white collar crime would be contrary to the wishes of most people, but a number of commissioners were unpersuaded by this argument. The American Bar Association believes that even the adjusted penalties are too harsh, and it points to a number of cases where judges have chosen to ignore minimum recommended sentences.

Even if white collar crime penalties are amended, individuals convicted of fraud or embezzlement could still face lengthy sentences. However, prosecutors often have difficulty proving these complex cases beyond a reasonable doubt. Those accused of these crimes may be interviewed during the early stages of an investigation, and the information that they provide could then used against them. An attorney with experience in this area may recommend that legal counsel be retained prior to any such interview. This would compel investigators to deal with an attorney, and it could prevent an individual suspected of committing a white collar crime from making incriminating statements.

Source: Reuters, “Justice Department objects to white-collar sentencing reforms”, Nate Raymond, March 12, 2015