Criminal sentences have been growing steadily more severe in nonviolent cases. White collar crime sentences may be reaching a peak as anger over the economic downturn is focused on people charged with financial crimes. A prominent case involving a convicted hedge fund executive could lead to the longest sentence ever recorded if federal prosecutors get their way.
The former head of the Galleon Group hedge fund was convicted last May for his role in illegal insider trading. The prosecutors in that case are seeking a prison term of up to 24 years and 5 months. Such a sentence was made possible by a 2001 change in the law that connects the punishment to the amount of money gained by insider trading. In this case, the insider trading activity led to roughly $64 million in illegal profits for the hedge fund group.
Prosecutors have justified the length of the sentence by suggesting that it will send a strong message to others that insider trading will not be tolerated. The man’s defense attorneys argue that it is unreasonable to impose a sentence that is longer than most received by those convicted of murder, kidnapping, sexual abuse or other serious crimes. In addition, they argue that the proposed sentence is significantly longer than other insider trading sentences handed down recently. The judge is free to follow the sentencing recommendations of the prosecutors or to ignore federal sentencing guidelines and impose a lesser penalty.
Regardless of the length of the actual sentence imposed, others facing white collar criminal charges should be aware that law enforcement and prosecutors have targeted these crimes for particularly harsh punishment. More effort than ever is going to catching and convicting people accused of money laundering, fraud and other financial crimes.
Source: The New York Times, “In Galleon Case, Prison Term Is Seen as Test,” Peter Lattman, 19 September 2011