Bad News For Scrushy, Siegelman

By now we have all read this story:

A federal appeals court said the seven-day prison term given an architect of the $2.7 billion fraud at HealthSouth Corp. was “shockingly short” and ordered another sentencing before a new judge.

Ruling in a 32-page decision, the 11th U.S. Circuit Court of Appeals overturned the sentence of former HealthSouth finance chief Mike Martin and sent the case back to district court for a second time.

U.S. District Judge U.W. Clemon first sentenced Martin to probation and house arrest, but prosecutors won an appeal. Clemon then sentenced Martin to a week in prison, prompting another appeal and the 11th Circuit’s ruling Tuesday overturning the sentence and removing Clemon from the case.

In Martin’s case, the guidelines range was 108-135 months. Martin, however, provided the feds with substantial assistance in their prosecution of other HealthSouth officials, especially Scrushy. Because of that assistance, the government agreed that a sentence of 42 months was appropriate. Judge Clemon went even further and imposed a seven day sentence. On remand, my bet is on a 42 month sentence.

The opinion is here, and it offers little comfort to Scrushy and Don Siegelman as they move into the sentencing phase of their trials.

The decision is bad news for Scrushelman not so much because of the specific numbers as for the overall tone of the opinion. I have not done the calculations, but I’ve seen suggestions of 48-96 months for Siegelman, which sounds right. Scrushy’s will probably be the same, or longer. Though these ranges are “advisory” the district court is almost certainly going to sentence Srushy and Siegelman to serious prison time, but if there was any doubt, consider these statements from the Eleventh Circuit’s opinion in Martin’s case:

Because economic and fraud-based crimes are “more rational, cool, and calculated than sudden crimes of passion or opportunity,” these crimes are “prime candidate[s] for general deterrence.” Stephanos Bibas, White-Collar Plea Bargaining and Sentencing After Booker, 47 Wm. & Mary L. Rev. 721, 724 (2005).

Defendants in white collar crimes often calculate the financial gain and risk of loss, and white collar crime therefore can be affected and reduced with serious punishment. Yet the message of Martin’s 7-day sentence is that would-be white-collar criminals stand to lose little more than a portion of their ill-gotten gains and practically none of their liberty.

Our assessment is consistent with the views of the drafters of § 3553. As the legislative history of the adoption of § 3553 demonstrates, Congress viewed deterrence as “particularly important in the area of white collar crime.” S. Rep. No. 98-225, at 76 (1983), reprinted in 1984 U.S.C.C.A.N. 3182, 3259. Congress was especially concerned that prior to the Sentencing Guidelines, “[m]ajor white collar criminals often [were] sentenced to small fines and little or no imprisonment. Unfortunately, this creates the impression that certain offenses are punishable only by a small fine that can be written off as a cost of doing business.” Id.

The fact that Martin’s guidelines range was 108-135 months’ imprisonment evinces Congress’s attempt to curb judicial leniency in the area of white collar crime. The district court’s 7-day sentence not only fails to serve the purposes of § 3553, but even worse, undermines those purposes.

In short, the Eleventh Circuit thinks it is very important that district courts impose tough sentences on white collar criminals. That Scrushelman’s white collar crimes involved selling public offices only makes it worse.

I think this means that so long as the sentences are within – or even above – the guidelines range, it will be affirmed on appeal. On the other hand, if the district court sentences them below the guidelines, it will be reversed. Scrushelman is going to serve serious time.

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  1. […] Wheeler over at Alablawg has a great post on the recent decision made by the 11 Circuit. The opinion is here, and it offers little comfort to Scrushy and Don Siegelman as they move into the sentencing phase of their trials. […]


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