Legal News

Possible Madoff Effect: Triple-Digit White-Collar Prison Sentences

By Amir Efrati

When Bernard Madoff last year received a prison sentence of 150 years for committing arguably the largest financial crime by an individual in U.S. history, the public cheered.

"Symbolism is important," said Denny Chin, a federal judge in Manhattan, at Madoff’s sentencing hearing.

Many legal experts believe Chin’s sentence likely empowered other judges to impose enormous, symbolic sentences for fraudsters.

Of course, there are a few examples of triple-digit sentences prior to Madoff.

But consider this: Since July, three fraudsters have joined the triple-digit club, receiving sentences of 100 years or longer and setting records in their respective federal judicial districts. It should be noted that only one of the judges in those cases mentioned Madoff during sentencing proceedings.

Earlier this week a new face joined the club: Robert Thompson, 43 years old, who led a large identity theft and bribery scheme while he was in a state prison for other charges. Earlier this week Thompson, who obtained more than $100,000 from the scheme, was sentenced by a Baton Rouge, La., judge to 309 years in prison. Here’s the story from the Advocate.

David Dugas, the U.S. attorney for the middle district of Louisiana, told the Law Blog that the federal judge in the case made no mention of Madoff and generally sticks to the federal sentencing guidelines, which in this case recommended a sentence of life.

In August of last year, Edward Okun, 58 years old, received a 100-year sentence after being convicted at trial of stealing $126 million from escrow accounts. Before the sentencing, Mr. Okun argued that his conduct wasn't anywhere near the scope of Madoff's and that he had serious heart problems.

Robert Payne, the Richmond, Va., judge who sentenced Mr. Okun, said the defendant's conduct "may not…have hurt as many people as…Mr. Madoff…but the impact is truly extensive and truly widespread and affects people all over this country…."

In September, Richard Harkless, 65, of Riverside, Calif., received a 100-year term after being convicted at trial of operating a Ponzi scheme that cost investors $39 million.

To some judges, former judges, and lawyers who study sentencing, sky-high prison terms set a bad precedent. Defendants who commit arguably worse crimes — such as second-degree murder — could receive sentences lower than fraudsters, they say. And defendants whose crimes pale in comparison to Madoff's could receive unduly harsh punishment.

"There's no rational basis for any of these numbers," Douglas Berman, a law professor at Ohio State University told us last year. "They make us feel good because we can say, 'Here's the bad guy.'"

Full post as published by Law Blog - WSJ.com on February 19, 2010 (boomark / email).