Editor’s Note: Michael Zeldin, a CNN legal analyst, has served as a federal prosecutor in the Criminal Division of the Justice Department and was a special counsel to then-Assistant Attorney General Robert Mueller. Lisa A. Rich is the director of the Residency Externship Program in Public Policy at the Texas A&M School of Law in Fort Worth, Texas. Before joining Texas A&M, Professor Rich served as the director of Legislative & Public Affairs for the United States Sentencing Commission. The opinions expressed in this commentary are their own; View more opinion at CNN.
Manafort was convicted on eight counts: five counts for filing false tax returns; two counts of bank fraud; and one count for failing to file a report of foreign bank and financial accounts. He was sentenced to 47 months in prison.
In our view, Judge Ellis’ sentence of Manafort was appropriate. At the same time, the sentence also highlights many profound and institutional problems inherent in our federal criminal sentencing system.
Judge Ellis’ sentence has been criticized, in large measure, because it is substantially lower than the recommended federal sentencing guideline range and because of the perception that the judge has treated others less privileged than Manafort more harshly. While these are valid points of concern, we lack sufficient data to offer an opinion on the disparate treatment point.
We do have, however, the most recent statistics from the United States Sentencing Commission which show that Manafort’s 47-month sentence is noticeably higher than the average sentences imposed in tax fraud cases (21 months), fraud cases (33 months) and foreign bank account and transaction reporting cases (15 months).
The United States Sentencing Commission, created by Congress in 1984, establishes sentencing guidelines to guide judges in sentencing offenders in criminal cases.
In Manafort’s case, the recommended sentencing guideline range was 19.5 to 24.5 years (or about 5 to 6 times the length of the actual sentence imposed). This is where many of the systemic problems can be seen.
Certain categories and factors, including the offense behavior (type of crime, level of sophistication, number of accomplices, amount of fraudulent loss or gain, etc.) and the offender characteristic (first offender status, acceptance of responsibility, level of cooperation, if any, etc.) can impact the calculation of sentencing.
Prosecutors followed the sentencing guidelines to determine Manafort’s recommended range, and the amount of money related to his criminal conduct played a significant role, according to the special counsel’s office. That is, the sentencing calculation was determined based on the total monetary value attributed to the scheme and the charges for which he was found guilty, and not based on whether any victim actually “lost” any money to Manafort. (The government argued that the value of the funds Manafort’s offense involved or intended to be involved in the offense over the life of his criminal activity totaled more than $55 million.)
The sentencing guidelines account for “actual loss” – the amount of money a bank loses, for example, if an offender files fraudulent paperwork and the loan is granted, and “intended loss” – meaning that, even if the fraudulent scheme does not result in any money going to the offender or any institution suffering a financial loss, the intended monetary loss amount still would be the principal factor in determining the offender’s level of culpability.
Using monetary loss, actual or intended, as an indicator of the seriousness of a crime can be unfair as it tends to outweigh the other factors (like the type of crime, or acceptance of responsibility) for determining an offender’s culpability.
Although the guidelines were established to provide more uniformity and transparency in federal sentencing as part of an effort to treat similar defendants who commit similar crimes equally, the guidelines are only a starting point for judicial consideration. Sentencing judges have broad discretion to impose a sentence below the recommended guideline range. If the judge does so, however, he or she must provide the specific reasons for that decision.
Judge Ellis did this when he opined that, while Manafort may have intended to engage in bank fraud which could have resulted in a substantial loss to several banks, the banks did not actually suffer any loss. So, he reasoned that relying on that dollar amount for setting the recommended guideline range was an insufficient basis to increase Manafort’s sentence.
Instead, he determined that “the guidelines were way out of whack on this, as the history of sentences in this area show” and that 47 months in prison combined with the payment of $25 million in restitution (to be paid to anyone identified as having been harmed in the fraud) plus $6 million in federal back taxes was a more appropriate sentence.
Judge Ellis does not stand alone among federal judges in making these kinds of determinations. The sentencing guidelines’ over-reliance on loss has been sharply criticized by the courts. One highly respected trial judge in the Southern District of New York, Jed Rakoff, has described the guidelines’ loss table as “irrational” and “arbitrary,” and suggested that the loss guidelines be “scrapped in their entirety,” pointing out “that in a great many, perhaps most, cases, the … amount of the loss does not fairly convey the reality of the crime or the criminal.”
Another federal judge, Frederic Block – in sentencing defendants to 60 months of imprisonment rather than the guidelines recommended 360 months – quoted Judge Rakoff, agreeing that the guidelines “have so run amok that they are patently absurd on their face due to the kind of piling-on of points for which the (g)uidelines have been frequently criticized.”
Moreover, recent history shows that in fiscal year 2017, over 70% of tax offenders, 70.9% of securities fraud offenders, and 63.5% of healthcare fraud offenders received sentences below the applicable guideline range. Even in drug trafficking cases, 63% of offenders received sentences below the applicable guideline range. This strongly suggests that, in cases like Manafort’s, the guidelines do not work.
Manafort’s sentencing gave the country a media-fueled glimpse into the federal criminal justice system’s sentencing processes. Hopefully, Judge Ellis’s sentence will provide Congress with an incentive to reexamine the sentencing guidelines and to consider meaningful sentencing reform, which is long overdue.
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After all, if a significant number of the actual imposed sentences fall below the recommended range, it’s a strong indication that the sentencing guidelines should be changed. Until then, judges should continue to exercise their individual discretion and, in appropriate cases, decline to overly-penalize individual defendants such as Paul Manafort.