Punishing the white collar criminal

“The judge opened his file and retrieved the case’s sentencing memos, plea agreement and lengthy pre-sentence report, which he had read over the past few days and which spelled out the case’s particulars: Borgono had pleaded guilty to conspiring to defraud the federal government by falsifying records that allowed her boss, the president of a Miami-based export company, to steal more than $10 million from the Export-Import Bank of the United States”

–  Judge who had ‘no passion for punishment’ retires after 31 years, The Washington Post, June 1, 2012

The Washington Post Article referenced above provides a ‘behind the scenes’ look at the challenges facing the judiciary when sentencing white collar criminals. Should society punish white collar criminals to the maximum extent allowable under the law, or does it make more sense to show compassion? Does tough sentencing for white collar criminals discourage “would be” fraudsters? How important is it to rehabilitate the offender?

Consider the vast difference between the punishment that the federal prosecutors argued for and the request made by Borgano’s defense attorney:

“Because so much money had been stolen, federal prosecutors argued in court papers that Urbina should sentence the former office manager to 18 months in federal prison. Her attorney countered that Borgono deserved just a year of home detention and two years of probation because the Peruvian immigrant, who became a U.S. citizen in 2007, had not reaped a dime in the scheme’s proceeds beyond her $500 weekly salary. She had cooperated extensively with authorities and had helped them build their case against her boss, a man sentenced by Urbina to nearly four years in prison. She also had the support of her community, the attorney said. The judge’s folder was filled with heartfelt letters from relatives, friends and even her priest.”

More on who won that fight in a minute…

In addition to the investigations that I personally conduct, each week I review over fifty cases involving fraud and intellectual property theft to determine which examples to include in our Global Knowledge Center. The differences in the sentences handed out to white collar criminals are truly startlingly, and in some cases alarming. Even within the same jurisdiction, the sentences handed down vary significantly. And let’s not forget that the Internal Revenue Service may also take an interest in the case. Or not… I have yet to understand the criteria that the IRS applies when determining which cases involving fraud and unreported income are worthwhile pursuing. That’s a discussion for another day…

I understand better than most that each case is unique and numerous factors must be taken in to account before a sentence can be handed down. But let’s consider the variation in sentencing from the “would be” fraudsters perspective. Does the threat of prison time factor in to their decision making process? Should it? What are the odds that they will be caught in the first place? Why consider the worst case scenario when committing fraud is so incredibly easy to do?

The case highlighted in the Washington Post article is somewhat different as Norma Borgano did not personally benefit from the fraud – her boss Guillermo O. Mondino did and he received 46 months in prison for his troubles.

So let’s compare Mondino’s sentence to the 66 months that Patricia K. Smith,the perpetrator of a $10.2 million dollar fraud received. That’s a difference of 20 months, or nearly two years. I fully understand that each case is different, but is Smith’s crime anymore heinous than Mondino’s? In fact, Mondino’s fraud involved a far higher potential loss of $24 million. Did Mondino’s attorneys do a better job defending their client? Who knows, but the difference is significant – especially if you are the unlucky individual serving the “extra” 20 months!

As for Norma’s fate, she received a year of home detention, four years of probation and $5,000 in restitution payments. Is that an appropriate sentence? Let’s be honest, who are we to judge?

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com