26 May 2006

Enron Sentencing

Kenneth L. Lay and Jeffrey K. Skilling were convicted of multiple felony counts in connection with Enron's collapse.

Lay is 64 years old with a life expectancy of about 19 years. One of Lay's crimes carries a maximum sentence of five years, five carry a maximum sentence of ten years, and four carry a maximum sentence of thirty years. A twenty year sentence would probably end up being a life sentence. A thirty year sentence would very likely end up being a life sentence.

Skilling is 52 with a life expectancy of about 28 years. One of Skilling's crimes carries a maximum sentence of five years, and eighteen counts carry a maximum sentence of ten years. A thirty year sentence would probably end up being a life sentence. A forty year sentence would very likely end being a life sentence.

Under the U.S. sentencing guidelines, one doesn't have to stretch too much to determine that a life sentence would be appropriate, to the extent that the statutory maximum sentences permit, for each man.

Arguing that some or all of the sentences should be served concurrently, or that more lenient versions of the sentencing guidelines in place when many of the offense occurred should be applied, could mitigate the ultimate sentence imposed. But, the court is unlikely to sentence Lay or Skilling more leniently than cooperating Mr. Fastow, who was sentenced to ten years in prison, and even the old sentencing guidelines called for tough sentences in a case as extraordinary as Enron's.

The biggest point that this case, like so many other cases in the real world do, is that the single biggest factor in a great many criminal cases from a sentencing perspective is whether sentences are served concurrently or consecutively. This is especially true in the white collar area where the number of offenses committed often boils down to a matter of prosecutorial discretion. Yet, statutory law gives the issue fairly short shrift.

Legislators like to think about the maximum and minimum lengths of a sentence for an individual crime, but devote little attention to the appropriate sentence when multiple counts are involved. The legislators who enacted the securities fraud laws likely envisioned the typical securities fraud case involving a single count of securities fraud for which the white collar criminal was sentenced to up to ten years in prison, and the likely bank fraud case likewise involve a single count of bank fraud for which the white collar criminal was sentenced to up to thirty years in prison.

Do twelve counts of securities fraud really merit a punishment twelve times a bad as one count of securities fraud? Should it matter how much money was at stake in the respective cases? There is no single count white collar offense on the books in the United States which has a one hundred and twenty year maximum sentence.

The United States Sentencing Guidelines appropriately do, to some extent, mitigate this conundrum, by looking at cases like Enron's in a more global fashion. But, it would be better is statutory criminal law better came to terms with the issue.

Generally speaking, sentencing a criminal defendant to consecutive sentences for incidents sufficiently related to each other as part of a larger scheme or course of criminal conduct that they can be fairly presented in a single trial is almost always unduly harsh.

For example, twelve counts of committing a felony for which the maximum sentence is three years (e.g. theft of rental property worth $500-$15,000 in Colorado), is almost always less serious, in a common sense justice view, than one count of a felony for which the maximum sentence is thirty-six years (e.g. second degree murder or kidnapping in connection with a rape or robbery). Indeed, in Colorado, if a thief steals a single item on a single occasion worth more than $180,000 (more value than could be possibly stolen in twelve separate counts of theft involving $500-$15,000), the maximum sentence is twelve years (the same as it would be for any theft in excess of $15,000), and Colorado expressly provides for aggregation of all thefts in a certain time period into a single sentence by statute.

While thieves who commit multiple offenses get a break in Colorado (although a misdemeanor felony whose offenses are aggregated into a felony may not see it that way), other minor felons who commit offense that qualify as multiple counts, do not. Taken to the greatest extreme, in a case previously blogged here, a man was charged with a separate child pornography felony for each image in his possession.

The federal courts are even worse than almost every state on this count. Yes, multiple criminal counts which are part of the same criminal enterprise to produce sentences may be served consecutively, in federal court, just as they are in state courts. But, in federal court, it is also that case that when multiple felonies are entered at the same time, that the counts which are first in time may be considered part of a prior criminal record of the defendant with respect to later in time offenses prosecuted in the same trial. Thus, you can walk into federal court with no prior criminal record at all, not even a prior arrest, and depart as a three strikes habitual felon. Very few states that impose enhanced sentences for repeat offenders permit different convictions in the same trial to have this effect.

Indeed, it is entirely likely that Lay and Skilling will come within some repeat felony rule in this case, not that it makes much difference for them, given their ages and the severity of the crimes of which they have been convicted.

Certainly, at the very least, criminal defendants convicted of multiple felony counts in a single trial should be eligible for punishment at least as great as that of the most serious offense for which they were convicted. Indeed, to the extent there are more counts, the sentence imposed should be, at least, closer to the maximum sentence for the most serious offense of which the defendant was convicted.

It wouldn't be unreasonable to punish someone more severely that the maximum punishment for the most severe offense involved. Colorado's approach to aggregating multiple theft counts into a single dollar figure that determines a maximum sentence for the multiple instances taken as a whole is a good model which could be applied more broadly to aggregate all non-violent offense involving harms to property. But, it is less obvious how to engage in similar aggregation in cases such as drug cases involving different types of drugs, or multiple less serious violent felonies, or multiple counts which are entirely different in type.

Perhaps aggregate sentences for multiple felonies in a single trial ought to be capped at a level equal to an offense one or two notches up the felony scale (perhaps depending upon the number of offenses or incidents or victims involved) than the most serious offense charged. Thus, multiple counts of a fifth degree felony should perhaps, be subject to no more serious a sentence than the sentence which would be imposed for a fourth or third degree felony.

This kind of rule wouldn't make much difference at all in a case like Enron's, which in Lay's case, the most serious offense charged carries a thirty year sentence (implying that a notch higher would mean forty or fifty years in prison for an already old man), and in Skilling's case, the most serious offense charged carries a ten year sentence (implying that a notch higher would probably mean a twenty or thirty year sentence for an already middle aged man). But, they could make a huge difference in cases involving multiple counts of far less serious crimes.

Statutes should provide some reasonable guidance to judges and prosecutors regarding what kind of sentence is appropriate when a number of minor felony counts are involved, and by and large, right now, they don't.

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