Atlanta Federal Criminal Attorney
Richard A. Grossman
Richard A. Grossman, Trial Attorney
66 Lenox Pointe, NE
Atlanta, GA 30324
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Archive for the ‘Fraud’ Category
Supreme Court Limits Use of “Honest Services” Law to Bribes or Kickbacks
The Supreme Court has dealt a blow to federal prosecutors pursuing corporate executives by restricting the federal statute which makes it a crime “to deprive another of the intangible right of honest services.” Jeffrey K. Skilling, the former CEO of Enron, sold a half million shares of company stock and made a profit of $15 million after allegedly lying about the financial health of the company. A few months later the company fell into bankruptcy. Skilling was convicted and sentenced to 24 years imprisonment.
Justice Ginsburg, writing for the majority, said the law must be limited to the core offenses of bribes and kickbacks. Justice Ginsburg wrote, “Because Skilling’s misconduct entailed no bribe or kickback, he did not conspire to commit honest-services fraud under our confined construction” of the law.
In another significant ruling the justices instructed the lower courts to reconsider the conviction of Conrad Black, the newspaper executive convicted of defrauding his media company, Hollinger International. In Black et. al. v. United States, the court held that its opinion in Skilling on the scope of the honest services law renders the jury instructions in Black on that law incorrect.
The decisions may have implications for cases involving politicians as well, including Gov. Rod Blagojevich of Illinois, whose trial is underway, and Joseph Bruno, a prominent New York politician who was convicted of federal corruption charges last December.
Eleventh Circuit Ruling on Loss Calculation and Restitution
The Eleventh Circuit has an interesting decision in US v. Patterson, No. 09-13354 (11th Cir. Feb. 8, 2010) (available here), that should be of interest to people facing various white-collar sentencing issues. Here is how the ruling starts:
This appeal presents the question of whether it is error for a court to sentence a defendant under a Guidelines calculation of intended loss that is more than double the amount of restitution ordered in the same case. We conclude that the facts of this appeal do not present the plain error that appellant asserts. We also reject appellant’s claim of ineffective assistance of counsel because the record is not sufficiently developed and collateral attack is the preferable avenue for such challenges. Therefore, we affirm the judgment of the district court.
This opinion provides a good review of the Eleventh Circuit law regarding intended loss, actual loss, restitution and the Federal Sentencing Guidelines. The Guidelines calculate a range based on how much loss was caused by the defendant’s crime. The sentence is calculated using intended loss, whereas the amount that a criminal must pay back, called restitution, is based on the amount of loss actually caused by the defendant’s conduct.
Some fraud crimes result in actual loss amounts that differ greatly from the intended loss. That was the problem in this case. This case involved stolen cars, some of which were never recovered and others were returned to their owners intact. For these reasons, the intended loss more than doubled the actual loss and restitution. Patterson argued that the loss amount used in sentencing should equal the restitution amount, but the Court rejected his argument, explaining that “cases offer substantial explanations why these figures can diverge.” The Court of Appeals said, a “criminal pays the price for the ambition of his acts, not their thoroughness.”
White Collar Sentencing Issues
Posted by Richard A. Grossman