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.
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