HSBC Banking Company Settles With DOJ

[Photo of HSBC's London Headquarters from wikipedia]

Although I am a former federal prosecutor, (and also, currently, an Augusta, Georgia criminal defense lawyer), I have also taught criminal justice courses part-time at a local university. One of the topics which we recently discussed in my course about White Collar Crime dealt with whether or not some white collar corporate defendants in some cases can unfairly avoid criminal liability -- for the corporation and/or its officers -- by simply paying a fine. In other words, do some white collar criminals get away with fraud and corruption with just a slap on the wrist in the form of a monetary penalty?

Have you read about the case involving HSBC, one of the world's largest banking companies, which is headquartered in Great Britain? According to various news reports, HSBC has been under investigation by the U.S. Department of Justice for allegedly laundering or transferring funds from Mexican drug cartels and for allegedly transferring funds to benefit Iran, in alleged violations of various sanctions. While everyone is entitled to their day in court, and while everyone should be presumed innocent until proven guilty, these are some pretty serious allegations, don't you agree?

Today, according to various news reports, HSBC is reportedly entering into a "deferred prosecution agreement" with the U.S. Department of Justice, whereby prosecution of HSBC and its executives will apparently be deferred, or avoided, and HSBC will simply pay a whopping $1.9 billion penalty.

Look, let's be fair: no one here is saying that any particular individuals in that situation should be prosecuted. We do not know all the facts. And no one should be judged based upon some news reports. And no one can fairly claim that $1.9 billion is merely a slap on the corporate wrist.

But the question still remains, as we discussed in my college class: Generally, do you believe that, in some criminal cases, (without focusing on that one), some corporations and corporate executives can avoid jail time by simply paying their way out of problems? Are there different standards or considerations in white collar crime, as opposed to street crime? What is your opinion?

Ponzi Scheme Nets 110 Year Sentence for Allen Stanford

[Allen Stanford Mug Shot from wikipedia]

Did you hear the news about the sentencing yesterday of Defendant R. Allen Stanford in a Houston federal court?  He was sentenced to serve a whopping 110 years in federal prison!  

In March, a jury reportedly convicted Stanford on thirteen counts of mail and wire fraud for his role in a massive $7 billion ponzi scheme.  According to government prosecutors, Stanford treated investors "like road kill" in an international investment fraud scheme, whose scope was apparently exceeded only by the ponzi scam of investment fraud "king," Bernie Madoff. According to news reports, Stanford's criminal defense lawyers plan an appeal.

Stanford's 110 year sentence was surpassed by Madoff's 150 year sentence.  But is there really a difference?  

As a former federal prosecutor, (and currently as an Augusta, Georgia criminal defense attorney), I am reminded of a story once told by a judge about another sentencing.  The judge had sentenced a bank robber to serve 77 years in prison.  The defendant told the judge, "But I can't make 77 years!"  The judge replied, "Well, just make it the best you can!"

Well, I guess Mr. Stanford, like Mr. Madoff, will just have to make it the best he can, too.  What do you think?

No More "Dancing With the Stars:" A Public Corruption Conviction for Tom DeLay

 

Many of you probably remember watching former House Majority Leader Tom DeLay's performances on last season's popular dance show, "Dancing With the Stars."  There was nothing "criminal" about that!  But Mr. DeLay won't be dancing again, at least not any time soon!  You may have read about his conviction, last week, in a Texas court, for laundering $190,000 in corporate campaign contributions to various state Republican candidates.

Following his conviction on money laundering charges, DeLay vowed to appeal and to obtain a reversal of this alleged "abuse of power" by the Texas prosecutor in the case.

But for now, Mr. DeLay's future doesn't look too bright, because he reportedly faces the possibility of many years in prison when he is sentenced.

What is your opinion about the DeLay case?  And what do you think about tough sentencings for white collar crime?  Should "crime in the suites" be sentenced as severely as crime in the streets?

Blago's Bloviating Blunder

By now, everybody has probably heard* that former Illinois Governor Rod Blagojevich nearly beat the federal criminal case against him earlier this week. In other words, there was a hung jury on all but one count against him--a charge of making false statements to a federal agent. But here are some valid reasons why, in my opinion, Blago is making a big mistake in making the rounds and boasting on the t.v. talk and news shows, while protesting his innocence and daring the government to re-try him on the "hung jury" counts.

First of all, Blago probably should be careful about sticking his finger into the eyes of the federal prosecutors in his case! Not only will they "make his day" by re-trying him, but also they will likely "make his day" by seeking the maximum sentence if he is convicted on the additional counts.

Second, did you know that, in federal court, the judge may consider, as "relevant conduct," even the conduct in acquitted counts in imposing sentence!? The bottom line is that, even though Blago was convicted only on one count, under the federal sentencing guidelines, the judge may zap him as though he was convicted on all counts!

Finally, as a criminal defense lawyer, (and former federal prosecutor), I would be afraid for such a client like Blago--afraid that the sentencing judge may see him boasting on t.v. and want to "make his day" by sentencing him to the maximum, too!

So, somebody out there, (hopefully, his own criminal defense lawyers), should, in my opinion, tell Blago to stop his boastful bloviating!

[*No, the use of the black and white picture of Blago above does not mean that he just got voted off the t.v. series Big Brother, too! It's just the easiest picture I could find! Besides, Blago could probably win Big Brother, don't you agree!?]

The Federal Sentencing Guidelines and Sentencing Disparities in Federal Court

If you have followed this blog, then you know that I am a former federal prosecutor, (for over 20 years), in Augusta, Georgia. You also probably realize that I still like to follow what's going on in federal court, even though I am now a criminal defense lawyer. In other words, I still handle federal criminal cases; I just sit at a different table and represent a different client when I go to federal court now!

This week, the Daily Report has featured a new issue involving federal sentencing. The article involves a request by the Department of Justice for the U.S. Sentencing Commission to investigate sentencing disparities by federal judges around the country. The article also mentions that the disparities are perhaps the greatest in fraud and child pornography cases. For instance, federal judges imposed sentences of one to four years in the AIG fraud case, (which involved more than $500 million in losses), but another federal judge sentenced a defendant involved in a $40 million Ponzi scheme to a whopping 25 years in prison. Numerous other examples abound. The article suggests that what (sentence) you get may depend on who (which judge) you get.

You might recall that, back in the 1980's, Congress enacted the federal sentencing guidelines to eliminate such sentencing disparities around the country. But then, five years ago, in Booker v. U.S., the Supreme Court struck down the mandatory nature of the guidelines and made them advisory. In other words, federal judges still check the sentencing guidelines, but they now have more discretion about not following them.

Will this new call by DOJ for a study of guidelines sentencing disparities do any good? I doubt it. And frankly, in many cases, maybe it's not such a bad thing that judges have discretion and can take into account the unique facts of each case in imposing sentences.

What do you think? Should sentences be more uniform? Or should judges have more discretion?

White Collar Crime, Sentencing, and Upward Departures

Many of you probably recognize this photograph of Bernie Madoff, the "investment fraud king," who is presently trying to serve several lifetimes in prison, (i.e. he was sentenced to serve a whopping 155 years in prison!) But did you know that there are "miniature Madoffs" all over the country? And did you also know that the trend is toward enhanced sentencings in many of these white collar criminal cases?

For instance, here, in Augusta, Georgia, the local media are publishing reports about a local insurance agent who is slated to be sentenced in federal court soon. The agent pled guilty in federal court a few months ago after reportedly admitting to defrauding friends and customers, (many of whom are elderly), out of about $2 million. Just like Madoff, the agent reportedly promised to invest the customers' money, but then spent it on himself.

In this case, like many other fraud cases around the country, the government is seeking an upward departure from the agent's federal guidelines sentencing range. And believe me, while we may all pray for an "upward departure" when we die, an upward departure in federal sentencing is not a good thing! It means that this defendant may face a significantly higher sentence than in a typical criminal case. And again, this is the trend, for better or for worse, (depending on your perspective), for white collar criminal defendants. In other words, criminal defense lawyers are no longer assured of probationary sentences for their clients.

What do you think about this trend toward tougher prison sentences in white collar crime cases? I'll bet we already know Bernie Madoff's opinion on this subject, don't we!?

"Queen For A Day" and Old Motels!

So, you might wonder, what do the old t.v. game show, "Queen For A Day" and old motels have in common, and what could they possibly have to do with white collar crime?!

Well, here is my explanation! There is a connection between the two, or at least I intend to try to make one! Have you ever heard of this old television game show which, according to Wikipedia, aired from 1956-1964? The premise of the game show was that several contestants would each offer their own personal sob story of their tragic lives. Then, the studio audience would vote on who deserved to be "Queen For A Day" and the winner got a crown and a new washing machine!

Being a "queen for a day" also has a special connotation today in criminal law. It is a term often used to describe a person who agrees to meet with government agents to discuss a possible deal. The government agrees that, during the off-the-record meeting, nothing you say will be used against you. You are, in essence, a "queen for a day!" (But you probably won't get a new washing machine!)

But THAT is not the connection I intended to make here! Instead, I want to make a different point: If I could be governor, or "king for a day," I would introduce legislation authorizing the state to purchase old motels around the state for use as diversion centers. In my opinion, diversion centers are a good, less costly alternative to prisons which offer judges an alternative place to send non-violent white collar criminals. There, the check forgerers, bad check writers, and drug users can stay, in a structured, but minimum security, environment at night, while they are required to work during the day, off-site, to help pay for the diversion center's costs, and to help pay on their restitution and fines. This is such a great idea. It is not only less costly, but also it means that our prisons, which are overcrowded, could then be used to keep violent, dangerous offenders even longer! But this is an idea which is not in vogue. In fact, in our state, they are closing down, not expanding, diversion centers everywhere.

So, that is my connection between "Queen For A Day" and old motels! If I could be "king for a day," I would buy old motels and convert them into diversion centers!

And now that you have heard my sob story, won't you please vote for me to be "King For A Day," so that we can open some more diversion centers?! And if you want to give me a new washing machine, that is okay, too!

What do you think about using diversion centers as an alternative sentencing measure for non-violent criminals?

Joke of the Day--The Bank Robbery Sentencing

The story is told of a bank robber who once stood before a tough, hanging judge for sentencing. The judge announced, "I sentence you to serve 70 years in prison."
The bank robber said, "But judge, I don't think I can make 70 years."
And the judge replied, "Well, just make it the best you can!"