Insight

Fluctuations within Fraud, White-Collar Sentencing

White-Collar Sentencing
EB

Evelina Burnett

December 23, 2016 12:00 AM

Prosecutors were asking for more than 15 years in prison for former Wall Street trader Andrew Caspersen when they headed to court on November 4 to hear the sentence handed down by U.S. District Judge Jed Rakoff. Caspersen had earlier pleaded guilty to bilking family, friends, and other investors out of more than $38 million in a Ponzi-like scheme. Caspersen had lost the money in risky options trades that were fueled, his defense argued during sentencing, by a gambling addiction.

According to news reports, Judge Rakoff called the federal sentencing guidelines that let prosecutors ask for a 15-year sentence “absurd,” adding that “no purpose will be served by letting him rot in prison for years on end.” Allowing that the gambling addiction could be a factor, Judge Rakoff sentenced Caspersen to four years in prison.

Former federal prosecutor Carrie H. Cohen said the sentence is part of a trend of below-guideline sentences in cases like Caspersen’s.

“We’re starting to see a lot more below-guideline sentences, specifically in financial fraud, white-collar cases where the judges are criticizing the guidelines as being high because they’re driven by the loss amount,” she says. Cohen is now a white-collar defense and securities litigation partner at Morrison & Foerster LLP in New York.

“There’s been an outcry that people who are not physically dangerous were getting very, very high sentences in terms of imprisonment,” she adds.

As an example, in one recent case in which Cohen was defense counsel, a $5 million loss translated into an 18-point enhancement in the guidelines, leading to a guideline range of 78 to 97 months’ imprisonment. Cohen argued that the range was “inappropriately inflated by the loss amount” and that the defendant’s conduct was not typical. He was ultimately sentenced to 24 months in prison.

Nationally, the percentage of fraud cases that were sentenced within the federal sentencing guideline range fell to just 40.2 percent in fiscal year 2015. That’s down from 55.5 percent in 2010, and it’s been steadily declining over the years. Sentences below the range far outpaced those above the guidelines.

“Inappropriately inflated by the loss amount.”

The U.S. Sentencing Commission approved changes to the fraud sentencing guidelines in 2015 that may lead to lower guideline ranges in white-collar fraud cases, recommending (among other changes) that “intended loss” be defined as harm that the defendant “purposely sought to inflict.” It may be having some effect: through the third quarter of fiscal year 2016, the percentage of fraud cases sentenced within the federal guideline range has inched up to 43.1 percent.

Still, since the amount of loss continues to have a major effect on the sentencing guidelines, attorneys representing white-collar defendants are likely to continue to see long sentence recommendations for their clients and judges who are open to hearing arguments about why those long sentences are not the right punishment.

Related Articles

Too Good to Fail


by Best Lawyers

Sandro Abegglen discusses new regulations after financial crises, corruption, and more.

An Interview With Niederer Kraft Frey

Return the Favor When Bidding


by Denys Myrgorodskiy

Denys Myrgorodskiy, the managing partner of Dynasty Law Firm, looks at the process of withdrawing insolvent banks from the market in Ukraine and its potential consequences.

New Bank Fraud Laws in Ukraine

The Great Reckoning


by John Ettorre

Eight years after the financial crisis, aftereffects continue to ripple through the financial sector.

The Great Reckoning

Basel III and New Challenges for Lending to Commercial Developments


by Mark K. Googins and Douglas F. Britton

Basel III

What Were They Thinking?


by James Friedman

What Were They Thinking?

Trending Articles

Introducing the 2026 Best Lawyers Awards in Australia, Japan, New Zealand and Singapore


by Jennifer Verta

This year’s awards reflect the strength of the Best Lawyers network and its role in elevating legal talent worldwide.

2026 Best Lawyers Awards in Australia, Japan, New Zealand and Singapore

Revealing the 2026 Best Lawyers Awards in Germany, France, Switzerland and Austria


by Jamilla Tabbara

These honors underscore the reach of the Best Lawyers network and its focus on top legal talent.

map of Germany, France, Switzerland and Austria

Effective Communication: A Conversation with Jefferson Fisher


by Jamilla Tabbara

The power of effective communication beyond the law.

 Image of Jefferson Fisher and Phillip Greer engaged in a conversation about effective communication

The 2025 Legal Outlook Survey Results Are In


by Jennifer Verta

Discover what Best Lawyers honorees see ahead for the legal industry.

Person standing at a crossroads with multiple intersecting paths and a signpost.

The Best Lawyers Network: Global Recognition with Long-term Value


by Jamilla Tabbara

Learn how Best Lawyers' peer-review process helps recognized lawyers attract more clients and referral opportunities.

Lawyers networking

Jefferson Fisher: The Secrets to Influential Legal Marketing


by Jennifer Verta

How lawyers can apply Jefferson Fisher’s communication and marketing strategies to build trust, attract clients and grow their practice.

Portrait of Jefferson Fisher a legal marketing expert

Is Your Law Firm’s Website Driving Clients Away?


by Jamilla Tabbara

Identify key website issues that may be affecting client engagement and retention.

Phone displaying 'This site cannot be reached' message

A Guide to Workers' Compensation Law for 2025 and Beyond


by Bryan Driscoll

A woman with a laptop screen reflected in her glasses

Medical Malpractice Reform Trends in Texas, Utah, Georgia and SC


by Bryan Driscoll

A fresh wave of medical malpractice reform is reshaping the law.

Medical Malpractice Reform Trends hed

Why Jack Dorsey and Elon Musk Want to 'Delete All IP Law'


by Bryan Driscoll

This Isn’t Just a Debate Over How to Pay Creators. It’s a Direct Challenge to Legal Infrastructure.

Elon Musk and Jack Dorsey standing together Infront of the X logo

Best Lawyers Launches CMO Advisory Board


by Jamilla Tabbara

Strategic counsel from legal marketing’s most experienced voices.

Group photo of Best Lawyers CMO Advisory Board members

Changes in California Employment Law for 2025


by Laurie Villanueva

What employers need to know to ensure compliance in the coming year and beyond

A pair of hands holding a checklist featuring a generic profile picture and the state of California

Common Law Firm Landing Page Problems to Address


by Jamilla Tabbara

Identify key issues on law firm landing pages to improve client engagement and conversion.

Laptop showing law firm landing page analytics

New Employment Law Recognizes Extraordinary Stress Is Everyday Reality for NY Lawyers


by Bryan Driscoll

A stressed woman has her head resting on her hands above a laptop

Best Lawyers Introduces Smithy AI


by Jamilla Tabbara

Transforming legal content creation for attorneys and firms.

Start using Smithy AI, a content tool by Best Lawyers

How to Create High-Converting Landing Pages for Your Law Firm


by Jamilla Tabbara

Learn how to create high-converting law firm landing pages that drive client engagement and lead generation.

Laptop screen displaying website tools to improve client conversion rates