If you think corporate crimes qualify for little more than a slap on the wrist, you might be in for a rude awakening.
A wide range of business-related crimes -- from environmental pollution to tax evasion -- now carry a range of stiff mandatory sentences that can land small company executives in jail and require them to pay steep fines and penalties. The chances of getting away with a warning are slim.
Today's tough legal environment is the byproduct of congressional concern over so-called "disparate sentences," whereby judges in various courts imposed a wide range of punishments for the same crime. Under this sentencing hodgepodge, an executive convicted of a federal crime in one jurisdiction might get probation while an individual convicted of the same offense in another jurisdiction might face a jail sentence.
Determined to correct this apparent inequality, Congress created the U.S. Sentencing Commission and authorized it to establish uniform sentences for the broad spectrum of federal crimes.
"The goal was to see to it that everyone convicted of the same crime gets the same treatment," says Mark Pomerantz, a partner with the law firm of Rogers & Wells. "That's only fair, but in the process this has taken much of the flexibility out of the system, specifically the ability to provide more lenient treatment for first offenders and those convicted of relatively modest crimes."
Judges used to have virtually unlimited discretion in the sentencing process, but they are now required to stay within a range of sentences established by the commission. As a result, judges have much less discretion than they did before the guidelines were issued.
"Take the case of a small contractor recently convicted of inflating the time sheets on the bills he sent to his customers," Pomerantz says. "On a contract for $450,000, the contractor's overbilling came to a total of $33,000. Five years ago this might have resulted in a sentence of a modest cash fine and probation. But today he is facing five months in jail, five months in a halfway house and repayment to the government for the cost of his
"Although the judge said he believed the sentence was too severe, he complained, in effect, that his hands were tied."
If you think this is an unusual example, think again. In case after case, tougher penalties are now the norm. When the president of small construction company was convicted of making union payoffs to buy labor peace, laymen following the proceedings assumed that the president's advancing age and previously clean record would result in a fine and a strong reprimand. They were shocked when the judge imposed a sentence of 70 months in a federal prison.
"If you are relying on the old rules of white-collar leniency to save you, you'd better forget it," Pomerantz says.