A Supreme Court decision could prompt white-collar criminals to challenge recent sentences made harsher by judges' consideration of factors such as how much investors lost as a result of corporate crimes.
Thursday's Supreme Court ruling did not invalidate federal sentencing guidelines, a controversial points-based system that sets out ranges of prison terms for specific crimes.
But experts said the ruling's legal rationale calls into question the practice by judges of increasing prison terms based on issues a jury never considers. Washington defense lawyers said clients have been calling for the past few days, asking how the court opinion affects them.
Sentences in the recent round of convictions for corporate crime have ranged from no time served to decades behind bars. Factors used by judges to come up with punishment include any record of a previous offense and the nature of the crime. Obstructing an investigation, for instance, as in the case of domestic entrepreneur Martha Stewart, carries a lighter sentence than cheating investors.
Now, some of the methods judges have used to come up with sentences may be off limits unless a jury is asked to weigh them.
"It's still very much up in the air," said Michael E. Horowitz, a Washington lawyer who serves on the U.S. Sentencing Commission, which drafts the guidelines. "It obviously raises some serious questions."
The ruling has left government and defense lawyers scrambling.
Prosecutors handling the case of four former Adelphia Communications Corp. executives on trial in New York have signaled they may react to the Supreme Court decision by asking that jurors, not the trial judge, consider factors that could result in longer sentences. Lawyers for Jamie Olis, who was recently sentenced to 24 years behind bars for his role in an accounting fraud, are reexamining their chances on appeal. The Justice Department has yet to issue widely anticipated guidance on the ruling for its 90-odd U.S. attorney's offices around the nation, which will help them decide how to apply the ruling in pending cases.
Criminal defense lawyers have seized on Olis as a prime example of how harsh sentencing guidelines have become. While former colleagues accepted deals to plead guilty, the former Dynegy Inc. accountant opted to defend himself in court against charges that he took part in a scheme to inflate cash flow from operations at the Houston company. Convicted, Olis drew the maximum sentence from U.S. District Judge Sim Lake, in part because of the amount of the fraud -- more than $105 million in losses suffered by the University of California retirement plan, a major Dynegy investor.
"The amount of loss is the driving factor in the guidelines," said Barry Boss, a defense lawyer at Cozen O'Connor in Washington. "Nothing else comes close to that."
