Judges Unpredictable When it Comes to Sentencing White-Collar Criminals

Federal judges are handing down wildly different sentences to corporate criminals.

While a former Dynergy Inc. tax executive got 24 years in prison after his March trial for fraud offenses in Texas, three HealthSouth executives who entered guilty pleas to similar crimes in Alabama got off without jail time last week.

"I don't know what messages the judge is trying to send to white-collar criminals," said U.S. Attorney Alice Martin, the lead prosecutor on the HealthSouth case. "Maybe some accountant tonight decides to make a false entry because HealthSouth executives only got probation," Martin told Reuters. "It is disheartening."

Prosecutors have said they were surprised both by the light sentences for the HealthSouth executives, as well as the grim fate of Jamie Olis, the former Dynegy executive who opted for trial rather than a plea bargain that would have given the judge more flexibility in sentencing.

By contrast, HealthSouth executives entered into plea agreements. Judges in Alabama are ignoring government recommendations and have so far given eight HealthSouth executives probation or monitored home detention — a far cry from more than two decades in prison.

A former HealthSouth assistant controller is the only one to get jail time. Emery Harris was sentenced to five months, far less than the government requested.

Sandy Maris, a trial attorney for Jenkens & Gilchrist of Dallas, pointed out that the major players in the scandal, especially former Chief Executive Richard Scrushy, have not been tried yet. It is "way too early" to think about avoiding Alabama for future corporate fraud cases.

John Sturc, a former assistant director for the Securities and Exchange Commission's enforcement division, said the Alabama wrist-slapping does not necessarily predict future sentences for white-collar criminals in the United States. Nor does it signal a failure of the Sarbanes-Oxley Act.

"It establishes a low end of the range," Sturc said. "The fellow from Dynegy marks the other side. The median ought to be somewhere else."

You may like these other stories...

Accountants without a succession plan are hurting not only themselves but their clients as well. Here are seven ways to see your practice continues after you retire—some of them are better than others.What Are Your...
In my last article, I discussed the model of value pricing and the benefits this billing structure offers you and your clients. However, in order to set up the right value pricing for your client, you need to know what...
Remember the old joke about the devil showing a guy around Hell? There were great parties, swimming pools, and sumptuous food. The guy liked what he saw, lived a bad life and went to Hell when he died. Upon arrival the devil...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.