Legal Commentary

EDNY Judge Departs from 235 Months to Probation for Cooperator in Fraud Case in Part Because Higher Ups Escaped Prosecution

In a short decision in the Newsday circulation fraud case, United States v. Smith, 2008 WL 4662346 (E.D.N.Y. October 20, 2008), Judge Weinstein set forth his reasons for departing from a guideline range of 235 to 240 months (capped by the statutory maximum) to probation, explaining that he did so in part because of the defendant?s cooperation, and in part because of the defendant?s otherwise law-abiding life and the $100,000 fine the court imposed.  But as readers of this blog may recall, see here and here, the judge had previously indicated his disquiet at sentencing the defendants in the case to prison time, where some unindicted co-conspirators (i.e. higher level executives at the newspapers in question) had escaped prosecution.  In Smith, the court alluded to this obliquely:

Smith has generally lived a law-abiding life without committing any crime prior to this one.  The seriousness of the offense is obvious: the defendant conspired with Newsday and Hoy executives who were not charged by the government to inflate circulation numbers and defraud thousands of advertisers [my emphasis]. . . Any concern that a sentence of probation for this offense threatens to promote disrespect for the law is offset by the heavy the fine imposed.  The background of this defendant and the nature and circumstances of the offense support a sentence of five years probation . . . The sentence will send a clear message that any involvement financial crimes will result in a criminal prosecution and a heavy fine.

Needless to say, this is a useful precedent for any current or future defendant facing sentencing in the subprime mortgage debacle . . .

Lawyers: Paul Schechtman and Daniel Shapiro (Stillman, Friedman & Schechtman, P.C.) (for the defendant) and AUSA William Schaeffer

Full post as published by New York Federal Criminal Practice on October 29, 2008 (boomark / email).