Tuesday, December 27, 2016

To Plea or Not To Plea? (Part 2)


This week, I am going to deal with costs, lawyers and odds.

There is no easy way to put this: fighting an indictment, whether you are innocent or guilty will cost you money. Unless you decide to go with a public defender, this means you will likely be spending money, and a lot of it, on a lawyer. Some lawyers charge by the hour and some charge a flat fee. It is important to note that whether your lawyer charges by the hour or charges a flat fee, the cost of actually going to trial will always be more than the cost of taking a plea. Preparing for trial is extremely intensive. Aside for setting aside the time needed for a trial which can range from days to months, your lawyer will need to prepare for trial. This will include interviewing witnesses, going through documents preparing you to testify, and preparing all sorts of pretrial motions. This is before outside vendors such as jury consultants are called in. This all translates into a lot of work which means a lot of billable time. Even an average lawyer is going to cost at least $300 an hour (some have hourly rates approaching $1000). Most white-collar cases are not simple. A two-week trial can easily take 60 hours. That is the inexpensive part. The preparation for a trial can easily exceeds 1000 hours. In other words, it is not only possible but probably that even a second-tier lawyer will cost well over $300,000. This is aside from any legal bills you may have accrued prior to deciding to go to trial.

For some defendants, this is enough of a reason to take a plea. The calculation is simple. A defense will cost $300,000. If that defendant stands to lose $100,000 per year by being incarcerated, he would be willing to take a plea that sends him to prison for under three years. Simply put, by going to prison for say two years, he will lose $200,000. By deciding to go to trial, the cost will be $300,000 even if he wins. So, the defendant may decide to take a plea purely because he will be saving $100,000 by not having to pay to go to trial. Of course, if he loses at trial, then he will lose many more years of income in addition to the money spent on lawyers. Finally, another consideration for most people is simply being able to pay for a lawyer. Often times, because most white collar indictments focus on financial enrichments by a defendant, a lawyer will not be willing to take money from you and will ask you to have someone else pay for you or for you to demonstrate that in no way was this money obtained in a way that could expose them to a claw back by either the government or by a bankruptcy trustee. Other times, you may not have the funds required but most lawyers who charge hourly will work with you provided they have a sufficient retainer.

The point is, right or wrong, for most defendants, the cost of going to trial will heavily influence their decision to take a plea; guilt or innocence notwithstanding. Defendants do not get reimbursed by the government if found not guilty so even in victory, a defendant may suffer financially. It is always important to consider that the prosecution has unlimited resources; you, in all likelihood do not. The prosecutors get paid a salary by the government, you need to pay yours and the longer it drags on the more it will cost you. If the prosecutor wants to, they can drag a case on for as long as they wish. If they lose, they go home to their families; if you lose, you do not go back to yours and you are out the money. Unfortunately, cost has to be a factor; it shouldn't be, but it is.

Closely related to the issue of cost is the issue of choosing a lawyer. This is probably the single most important decision that you will make, it is important to interview at least two lawyers before choosing which to retain. It is preferable to get input from either clergy, former defendants, or consultants in helping you decide on which lawyer to retain. It is important to note what a lawyer will and will not do. A lawyer will not tell you if you are going to be indicted; he just doesn't know. A good lawyer will never tell you that you will definitely win a trial. Your lawyer is not your therapist (and you do not want him to be if you need to pay him hourly). Your lawyer will lay out what he thinks is the prosecution's case against you and he will develop defenses. He will meet with the prosecutors on your behalf. He is your mouthpiece. He is your legal counsel. Again, if you do feel the need to talk to someone consider clergy, a therapist or again, a consultant such as myself. The most important factor and that you are comfortable with and trust your lawyer. The same is true with anyone with whom you decide to bring into the process.

Just as in the case of any industry, the cost of a lawyer can vary. The price can range from nothing for a public defender to in the millions for shall we say is the Rolls Royce of lawyers. One mistake that many defendants make is that they do not know which kind of lawyer they need. Sometimes a defendant will panic and hire the most famous and expensive lawyer when, in reality, he would be just as well served with a less expensive lawyer. Sometimes a customer will buy a Cadillac when any old Chevrolet will do. To be clear, there is not necessarily a correlation between the cost of a lawyer and the quality or suitability of the representation. Clearly if you are a high-profile defendant, are set on going to trial should it come to that, and have unlimited resources, then yes there is a good reason to take the top attorney. One positive in choosing from the top attorneys is that they do not take many cases per year. A top lawyer will usually turn down other cases once he takes yours. However, as discussed, most cases do not go to trial. Often times prosecutors will cut the same deal whether you have the most expensive lawyer or a second or third tier lawyer. In many cases, the defendants who spent over a million on legal representation got the same plea offer as the one who spent only thousands or even if represented by a public defender. Speaking of public defenders, it should be noted, that at least on the federal level there are some very good ones. Often times these are ivy league graduates who are trying to get court room experience, and this is the only way to do so. The downside is that they often have huge caseloads.

The real question is how do you know which to choose. When crisis hits, the knee jerk reaction is to choose the best attorney that money can buy. It is important to take a step back at that point and analyze you plans. It is worthwhile to hire someone who has gone through this who can help you choose. If you are willing to concede to a plea early on or if you are not in such a complex situation, hundreds of thousands of dollars can be saved by choosing a less expensive lawyer who may be ideally suited to provide you with representation.

Lastly, I am going to address what I like to call the actuary method. It quite simply focuses on probability. As we all know, if you entire a contest with a 10% probability of winning $1 million, then you should be willing to sell that entry for 10% of the potential jackpot of $100,000. You would certainly sell it for half a million dollars unless you were certain that you were going win the full million. The same logic can be applied to the legal process.

Contrary to what we see on TV, there is no experienced lawyer with a winning record against the government. Any lawyer that tells you he has a winning case against the government has probably not tried many cases. But let’s assume for the sake of argument that you have a lawyer who wins 30 per cent of his jury cases against the government. If you are facing 20 years then, using the logic with the jackpot, be willing to accept a sentence of six years or less, all things being equal since 30% of 20 is six. By the same token, if you are facing 20 years and you are being offered a plea that can have you out in under two years, you would need to hire a lawyer with a better than 90% chance of beating the prosecution at trial. Most defendants do use this method in some way or another. When some takes a deal because "if I lost, I was going to go away for 20 years" he has decided that based on the rules of probability that he is going to take a plea. The problem with this method is that by using this metric, no one would ever go to trial. Indeed, we do find that most people who do go to trial were not offered deals that were compelling enough based on this metric. But then again, keep in mind that 98% of all cases are pled out.

I think I have hit the major points to consider when considering taking a plea or go to trial. Taking a plea means you are admitting to a crime. This is a life altering decision, make no mistake about it. It often requires you to swallow your pride and admit to things that you do not necessarily believe you did. Your life is changed in many ways forever once you make the decision to plead guilty, However, once it is over, you will recover you will rebuild. It is always important not to lose site of the big picture and to never lose site of the forest for the trees.

Thursday, December 15, 2016

To Plea Or Not To Plea? That Is The Question (Part 1)


I touched on this point a bit last week, it is worth expounding on it as almost every defendant, whether innocent, guilty, or somewhere in between, will be faced with the decision of whether to take a plea or defend himself at trial. Let me clear, there is no uniform, right answer and every situation is different. One thing that is clear however is that in deciding to take a plea, issues relating to guilt or innocence are largely irrelevant. You will have to take responsibility.  A defendant who pleads guilty will have to tell the judge that he understands the charges that he is pleading to and will have to affirm that he understands the statutory maximum to which the judge can sentence him. If the judge does not believe that a defendant believes himself to be guilty, there is a chance he will reject the plea.
To review, there are two separate factors at play when it comes to sentencing; the maximum per count and the sentencing guidelines. For example, a count may carry a maximum prison term of five years, but the sentencing guideline range can, and often will come in below that. The judge, as he himself will tell you, is not bound by these guidelines; the judge can and often has gone above the guidelines.
The judge will tell you at the change of plea to guilty that he has that right and that guidelines are merely "advisory".
But before we get ahead of ourselves, I think it is important to go over some of the considerations that one must consider. Today I will focus on two of these factors.
The most obvious consideration is really one that only the defendant can answer. Did you do it? Are you guilty and do you believe they have the evidence against you? Do you believe that because of this you will definitely lose at trial? Essentially, they got you and you do not have a leg to stand on. In this case all you have to do is look at the downside. All you have to look at is what will you get when you are convicted and get you do materially better by taking a plea. If the plea is not worse than what you will face when you lose then you might as well roll the dice and go to trial. If it is much better, then yes, take the deal.
Outside of that situation the primary factor that any defendant must consider is his family. Most white-collar defendants have families. This is a good thing. A strong support system is important when going through this process as well as when you are released, should you go to prison. At the same time, it is important to realize that while going through a trial will be grueling for you, it will be complete torture for your family. They will have to sit there in court and listen to the prosecution throw everything they can against you. You have to ascertain if you want to put your family through the horrific experience that is a criminal trial. This can go on for weeks. For some defendants this is reason enough to not go to trial. Remember, that if you decide to go to trial you better have the full support of your spouse if you have one. It is important for the jury to see that you have familial support and it does not take a genius to tell you what a jury thinks of a defendant who does not have familial support during a trial.
There is another reason to realize that family has to be involved. If you go to prison, it is not only you who are going to prison. Your family is going as well. Aside from the fact that their lives will be disrupted by your absence, they will be visiting you in prison as well. Should you decide to go to trial, make sure your spouse supports you unconditionally in this decision. I have met may inmates who, against their spouse's wishes decided to go to trial and lost. Do you think a spouse, who advises you to take a plea which would have you out of prison in a fraction of what you get when you lose will be there waiting when you get out? You cannot blame your spouse. By completely disregarding your partner's wishes you acted selfishly. You left your spouse to care for your children for say 10 years when it could have been two. If your spouse does support your decision to go to trial, then he or she must be prepared for what happens if you lose.
Another issue with regards to your family involves children. If you are a responsible parent, you know that there is nothing more important than being with your children and caring for them. You want to be there at every event, be there for the milestones and watch them turn into responsible adults. Any time you miss with them is time you will never get back. At the same time, we want our children to look up to us. We want them to learn from us. We want our children to not be embarrassed by us. We do not want our children to have to come to prison to see us; we want to see them every day. As a defendant, you will wonder how your guilty plea will affect the way you are viewed by your children. You may ask yourself if it is better that you maintain your innocence even if you lose at trial rather than admit to a crime that you may or may not have committed. At the same time, you must consider the risks. As I mentioned last week, an indictment with the potential to call for a 20-year sentence per count should you lose can magically become a plea deal with a five-year maximum. This 60-month sentence can easily become 13 months of actual prison with a cooperation reduction. Are you comfortable taking the risk of missing your children’s' entire childhoods when you can only miss a small part of it? Even if you are, in-fact comfortable with that risk, is it fair to your children to take that risk? As hard as it would be for you to miss out on their childhoods, it is infinitely harder for them to grow up without a parent. As with your spouse, your children's' needs need to be as well. The reality is that children are resilient and when laid out for them they will not think any less of you for taking a plea. But what will they think of you if you decide to embark on a risky trial depriving them of a much-needed parent at home?
As I mentioned there is usually no right answer. But these are perhaps the two most important issues to consider. When you choose to have a family, that comes with responsibilities to be there for that family. A defendant is in an unenviable situation because there are now other people who will be affected by his decision Sometimes guilt and innocence are just irrelevant.

Next week costs, lawyers, and odds.

Wednesday, December 7, 2016

Does Prison Serve a Purpose and for Whom?


It's no secret and there is no reason to hide it. I was just released from federal prison. I served 11 months incarcerated on what was originally a 30-month sentence. For me, the actual part of serving my sentence proved, from my perspective to be the easiest part of my ordeal. From the time that the investigation into me commenced until the time I was sentenced, 6 years passed. In so many ways those years were harder, they were more of a punishment for me than the actual time served. My goal here is to share the knowledge that opinions that I have come up with over that time and lay them out here.
Which brings me to the purpose of my first blog. What is the purpose of prison? There are four purposes to incarceration:
1, Retribution-basically punishing someone for what he did wrong
2. Incapacitation-Keeping the offender away from society to protect society from him
3. Deterrence-If someone knows they will go to prison, then he is less likely to commit a crime
4. Rehabilitation-To change the behavior of the offender.

In general, there are two types of criminals; violent and nonviolent. Violent crimes consist of armed robbery, murder, etc. Nonviolent crimes consist of the white-collar variety such as financial crimes and insurance fraud and nonviolent drug offenders. In analyzing the purpose of incarceration, it is quite simple to understand why a violent criminal need to be incarcerated. He needs to be punished and society needs to be protected from him. Whether prison is a deterrent for a violent criminal is hard to tell and if he gets a very long sentence then rehabilitation does not come into play at all.

White collar guys generally do not fit this profile. Unless their crime is so very egregious, they usually end up in a prison camp. According to the US sentencing commission, the average sentence imposed for fraud cases was 27 months, yet it is the third largest portion of federal criminal convictions; only drugs and immigration cases were higher. Keep in mind most murder cases are dealt with on the state level.  Society does not need to be protected from them as any information about them is readily available. There also is very little rehabilitation needed or even offered to a typical white collar convince. Keep in mind, most of these individuals have been convinced of some sort of bank fraud, securities fraud or insurance fraud. As far as acting as a deterrent I would argue the following. Many white-collar convicts that I have met either made a clear calculation prior to committing their crime. They knew what they were doing was wrong. They knew they could go to prison. They decided to risk it anyway. The remainder of the white-collar convicts either did not know what they were doing was illegal, went to trial because they thought they were innocent and lost, or simply took a plea because the prospect of going to trial was either too much of a gamble, too expensive, or both.
Of all white-collar indictments around 98% of them plead out. Allow that to digest for a moment. The government only must go to trial on 2% of all white-collar cases. Does any think that the government gets it right 98% of the time? Let's not forget, that is excluding their wins at trial. Do 98% of defendants believe that the government's case is so persuasive that they just decide to admit what they did wrong? Only 2% of defendants believe that they are innocent? The reality is that going to trial is just too risky. The sentencing guidelines are a function of the charges brought against a defendant. Counts have a point scale and there are factors that can increase the total number of points that go into a sentencing guideline. If you plead guilty, then you get a reduction of points for: acceptance of responsibility". In reality, what happens is that if you go to trial then the charges are trumped up that even if you lose you are likely going to get quite a lengthy prison term unless you are lucky enough to get a judge that decides to have mercy on you and dole out a sentence below the guidelines. If you take a plea, the prosecutor will likely have you plead to a count that has a lower maximum sentence. As an example, a prosecutor can choose to indict a defendant on wire fraud which is basically a catch-all for almost any financial crime where someone uses the banking system based on false information that you gave him. The maximum penalty is 20 years in prison if you are convicted. That is 20 years per count. So, if you are indicted on 5 counts of wire fraud you can, in theory be risking up to 20 years in prison if convicted. Furthermore, since you will be getting a sentence of over 10 years, you are disqualified from going to a camp. You will be going to real prison.  The sentencing guidelines may come out lower, but the judge has the authority to sentence you to the maximum allowed per count. However, if you agree to a plea deal, the prosecutor may decide to "allow" you to plead to one count "conspiracy to commit wire fraud" and voila, you are now facing a maximum of 5 years. Based on your acceptance of responsibility, your sentence guideline will likely be lower. And if is willing to give them cooperation, then you get a rule 35 of 5k1 letter. A person sentenced to 60 months in prison may, can, when factoring good time credit, drug programs, cooperation reductions, and halfway house end up serving 12-18 months in prison. Is it any wonder that so many defendants choose to plead guilty? 18 months vs 20 years. Is it any wonder that so many people choose to plead out rather than go to trial?
The point of what I am pointing out is not the fact that the deck is stacked against the defendant (it is) the facts point to the issue of deterrence. For myself, as is the case with so many others, innocence or guilt are largely irrelevant when deciding when to take a plea. The prosecutors know this although they are supposed to only indict if they believe you to be guilty. The judge knows this too. So now let's assume that we have someone who is pleading guilty to a minor fraud that calls for 36 months in prison. We can assume the following: 1. His crime was not so egregious to warrant him being moved from society for an extended period (think Bernie Madoff). 2.He was facing more time had he gone to trial. 3.He will probably serve less than 18 months in actual prison, which will be in a camp setting, hardly a "deterrent".
So, what is the right approach? Let's put aside for now the fact that he was incentivized to not go to trial because of the risks of going to trial. That issue we will tackle in another blog. Did he know what he was doing was illegal? Maybe. If not, then clearly prison was not a deterrent. Is he so dangerous that he needs to be kept away from society? Most likely not. So, the only reason to send him away is retribution. But is there really retribution? He is going to be in a prison camp. Is he really suffering? The reality is that the people that are suffering are not the inmates; it is their families. It is the spouse who is alone to care for the family and the children that are left without a parent.
Many will still say that they do not care. You plead guilty to a crime, you need to go to prison. Consider this: the cost of housing an inmate is around $30,000 per year. As of this writing, there are a total of 190,452 federal inmates. (https://www.bop.gov/about/statistics/population_statistics.jsp) That is a total annual cost of about $5,713,560,000 or nearly $6 billion. A little over 26% of them, the bulk of where white-collar crime falls have sentenced of under 5 years. So, it is costing close to $1.43 billion per year for these low-level white-collar offenders; most of who took pleas. Now consider that if these offenders were not in prison they would, likely, have jobs. That means that they would be paying taxes. You would have 45,000 more people working. Many of these people would be business owners and would even be creating jobs. The median personal income for someone with a college degree is around $50 thousand. The federal income tax this person would be paying, assuming he is married is 6581 per year. That would be total tax revenue from out 45 thousand inmates of $296,145,000. Essentially, we have a nearly $1.75 billion swing by allowing these offenders to work. Furthermore, since this parent is working, his family would be less likely be eligible for access to social welfare programs such as food stamps and Medicaid. Then of course we have the non-monetary costs to the family. Would it not make a lot more sense to find other forms of punishment (community service, home confinement, financial restrictions), Does it make sense to incarcerate a doctor for insurance fraud and take away his license to practice medicine when his crime was financial and not related to his actual practice of medicine? Would it not make more sense to allow him to keep his license and utilize his skills to help underprivileged children? Finally, does it make sense that after he has paid his debt to society to prevent him from getting back to work.

Sadly, for white collar defendants there is no recourse at this time. The system is what the system is and until there is meaningful criminal justice reform, little is changing soon. Change takes time and unfortunately, for most defendants, time is a luxury we do not have. The key is to face the facts as they are today. To make decisions based on what is best for your family and the risks of going to trial. Going through the process, the fear of the unknown can be very stressful. The upside is that it will pass. Over the next few months I will continue to go over other issues that are very relevant to defendants who are under indictment or under investigation. These are things that I had to learn as I went through it but would have loved to have known earlier on. Your lawyers are there to handle to legal issues but there are some issues that they just simply won't deal with or cannot advise you on for a variety of reasons. I will be addressing topics such as factors going into choosing a lawyer, deciding on whether to plea, preparation for being indicted and going to prison, as well as other topics concerning white collar defendants. I will also be monitoring developments in criminal justice reform as well as prison reform and offering my opinion on them. Remember, unless I quote facts, everything I write is either learned from my seven years of experience with the criminal justice system or my opinions. I am not a lawyer and will not be able dispense legal advice.

WHEN FRIENDS BECOME ENEMIES AND SECRETS ARE REVEALED

Getting implicated in a crime comes with many challenges. There are financial challenges, social challenges, and of course familial challen...