The Hard Numbers on White-Collar Criminal Sentences

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Calling all data geeks:

The United States Sentencing Commission just issued its “Overview of Federal Criminal Cases, Fiscal Year 2015.”

It’s a fairly short summary of the longer “2015 Sourcebook of Federal Sentencing Statistics,” which is also worth checking out.

A few interesting tidbits about white-collar cases are included in the Overview.

First, fraud cases make up 10.5% of all cases, the third largest portion of total federal criminal convictions (after drug and immigration offenses). There were 7420 fraud cases, which is a decrease of 2.5% from 2014.

Second, the losses varied greatly among these cases, ranging from $0 (134 cases) to more than $7 billion. There was, according to the report, “an average loss amount of $2,909,541 and a median loss amount of $213,831.”

Third, the “average sentence imposed in fraud cases in fiscal year 2015 was 27 months.”

Fourth, the Sentencing Commission gathered some statistics on sentences imposed on organizations. There were 181 such cases, a little lower than previous years for which the Commission gathered statistics.

Organizations such as corporations and partnerships can be prosecuted for violating federal criminal law, and 181 organizations were sentenced for at least one federal criminal offense in fiscal year 2015. This number is a 10.5 percent increase from the 161 cases reported in fiscal year 2014, although the number of organizational defendants continues to be lower than in earlier years. For example, 200 organizational defendants were sentenced in fiscal year 2003, and 255 organizational defendants were sentenced in fiscal year 1999.

The organizational offenders pleaded guilty in nearly every case, but the penalties ranged from no fine or restitution, to both a fine and restitution (plus maybe some compliance remediation):

Of the 181 organizational offenders, 97.8 percent pled guilty to one or more charges in fiscal year 2015. The most common crimes for which organizational defendants were convicted were environmental and fraud crimes. Organizational offenders were sentenced to pay only a fine in 87 cases. In an additional 30 cases the offender was sentenced to pay restitution to the victim of the crime as well as to pay a fine. In 26 cases, the organization was sentenced to pay restitution only. No fine or restitution was imposed in 38 cases, although other sanctions were imposed in some of these cases. Additionally, of the 181 organizational offenders, 139 received some term of probation, and 51 were ordered to make improvements in compliance or ethics procedures.

It’s worth looking at the table summarizing the types of offenses committed by organizations—the most common of the 181 cases were environmental offenses (60 cases/33%); fraud (38 cases/21%) and “food, drugs, agricultural and consumer products” (22 cases/12%).

A few comments on these statistics.

  • It’s apparently possible to convince a court that the losses were zero. This happened in just 1.8% of all fraud cases (134 of 7420 cases), but it’s good to know that you have a chance.
  • Defense attorneys are doing a good job for these defendants. The average fraud sentence is a little over two years. This is longer than I would have expected given that many defendants facing fraud charges are first-time offenders. That said, with an average loss amount of nearly $3 million, 27 months is not too bad. A $3 million loss amount for a first-time offender with no other enhancements could merit a 51-63 month sentence (level 25).
  • Organizations are still regularly pleading guilty (97.8% of the time). The statistics show why: A full 21% were not fined or ordered to pay any restitution at all—an amazing outcome. Nearly 50% of organizations (actually, 48.1%) were ordered to pay only a fine and no restitution.
  • Compliance expertise remains critical for outside counsel. Just over 28% of organizational offenders were ordered to improve their compliance programs.

One statistic that would be really useful going forward under the Yates Memo would be the number of individuals sentenced in these organizations that pleaded guilty. This would test DOJ’s commitment to finding and charging the individuals responsible for wrongdoing.

All in all, these are fun reports for lawyers interested in know the hard facts about sentencing. Dig in to them. Let your data geek flag fly.

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