As I explained last time, I am currently knee-deep in preparation for my next workshop for experienced MLROs in Guernsey. (You can read a bit more about it on the new Events page of my website.) I just love doing this sort of prep, as it gives me an excuse to scuttle off down various alleyways, truffling for interesting stories and developments to tickle the AML taste-buds of “my” lovely MLROs. And yesterday I was doing some reading about sentencing for white collar crime (complete with visions of the Red Queen from Alice in Wonderland hollering “Off with his head!”) when I came across an fascinating nugget.
In 2010, Ohio businessman Michael Peppel pleaded guilty to fraud and money laundering related to the 2003 collapse of the tech firm of which he had been CEO. In the aftermath, investors lost US$18 million, and 1,300 people lost their jobs. The US sentencing guidelines tell the judge to look at the impact of the crime and the defendant’s background and previous record, and the recommended sentence for Peppel was in the region of ten years. Now, Peppel pleaded guilty, so he deserves “sentence credit” for that. But when Judge Karen Moore handed down seven days (no typo: days) plus a $5 million fine, it represented a 99.9975% reduction on custody. The sentence went to appeal, and the judge’s reasons were re-examined. And among other things she had said this: “Mr Peppel’s sentencing memorandum and the many letters, in excess of a hundred, that the Court has received from friends and business acquaintances note Mr Peppel’s humble beginnings and his many community and charitable activities both before and after the charges in this case.” She had concluded that he was “a remarkably good man”.
Letters? I have heard of victim impact statements, and as a magistrate have seen letters from employers saying that defendants are lovely if a bit speedy in the works van, but I didn’t realise quite how important they are in white collar crime cases. Rajat Gupta, the ex-MD of McKinsey who was convicted in June 2012 of insider trading, had four hundred letters sent to the sentencing bench on his behalf – including ones from moral big-hitters Bill Gates and Kofi Annan. In the end, Gupta received two years rather than the recommended eight to ten. Bernie Madoff, on the other hand, had no letters… and went down for 150 years. So it seems that white collar criminals might do well to reserve a portion of their defence budget to spend on stamps rather than on lawyers.