For the government, sentencing seems to be a science, not an art. Let the probation office calculate the guideline range. Request a sentence within it, usually at the high end. Done.
But for defense counsel, sentencing is an art, not a science,. You have to consider the crime itself, the sympathetic nature of the victims, the background of your client, the leanings of the judge, the testimony of any witnesses during sentencing, and similar sentences for similar offenses.
If the result of all that “art” is twenty months in prison, it may sound like a very long time. Even with good time credits, you will spent about 17 months behind bars. Watching your client sentenced to 20 months hurts.
But getting a 20 month sentence when it could have been 78 months? Well, that’s a different story. When the government asks for over 6 years in prison and you end up with less than 2 years, that’s not a bad outcome.
The former CEO of an aircraft leasing company was recently sentenced to 20 months for wire fraud. I call it a victory because the government asked for 78 months.
The Trial
In March 2012, a federal jury in Chicago found BCI Aircraft Leasing, Inc. CEO Brian Hollnagel guilty of six counts of wire fraud and obstructing a government investigation. It was a 7-week trial and the jury deliberated for 9 days. (The company was also found guilty; other employees had pleaded guilty and cooperate with the government.)
The government alleged that Mr. Hollnagel had obtained financing for BCI by defrauding certain investors and lenders. For example, the government contended that Mr. Hollnagel and BCI made misrepresentations to investors about the size of the their expected returns and how the funds invested would be used by BCI. In addition, Mr. Hollnagel apparently paid a $250,000 bribe to the vice-president of a commercial aircraft company. In return for the bribe, the executive ensured that his company would buy two aircraft from BCI, resulting in a $4 million profit to BCI.
The government contended that Mr. Hollnagel and BCI’s fraud totaled more than $50 million. They allegedly commingled funds and used them for their own purposes. The obstruction charge arose from a lawsuit filed by the SEC; the government claimed the defendants had provided false information to the SEC.
The Sentencing
At sentencing, the government asked for a sentence of 78 months in prison. Mr. Hollnagel requested that he be sentenced to home detention, not prison.
The key argument by Mr. Hollnagel’s counsel was that the investors and other parties had not lost any money as part of the scheme. They had all been paid back. Defense counsel called the government’s theory of loss nothing more than an “abstract construct.”
Judge Amy J. St. Eve agreed, at least in part. She noted that some of the investors were willing to do business again with BCI and that Mr. Hollnagel “did not use the money to line [his] own pockets or to purchase expensive cars or expensive homes.” As regular readers of this blog know, that’s a rarity. A lot of defendants like to buy fancy cars and homes with the proceeds of their fraud.
But, when the “victims” have suffered no harm and the “wrongdoer” gained nothing, it’s hard to see why a 78-month sentence was proposed by the government in the first place.
Mr. Hollnagel was convicted of a serious crime, to be sure. But it would be nice if the government sometimes considered a little more “art” with its sentencing recommendations, rather than adhering blindly to “science” (if you can call the Sentencing Guidelines “science”).
Congratulations to Mr. Hollnagel’s lawyers (from Zuckerman Spaeder LLP and Sidley Austin LLP). I’m sure you aren’t entirely happy with the outcome, but know that this truly is a victory in the end.