Sentencing White Collar Criminals
Retribution and deterrence are the two rationales for imprisoning white collar criminals. In its introductory commentary to “Offenses Involving Taxation,” the Federal Sentencing Guidelines set forth the justification for the severity of sentences given to tax evaders, stating that the criminal tax laws are designed to protect interest in preserving the integrity of the nation’s tax system. The Federal Sentencing Guidelines, which took effect in 1987, were responding to concerns about the costs of white collar crime and questions about lenient treatment for white collar criminals. While the Sentencing Commission generally based its guidelines on past sentencing practices in federal courts, it chose to depart from that practice when it came to establishing sentencing guidelines for white collar crimes. This came as little surprise, since the Commission, which was created by the Sentencing Reform Act of 1984, had several clearly stated objectives including punishing white collar offenders to more accurately reflect the seriousness of their offenses.
Prior to the establishment of the Federal Sentencing Guidelines, judges had significant discretion in sentencing offenders which led to considerable disparity. However, critics of the Guidelines contend that these disparities did not stem from a lack of common principles underlying the structure of sentencing, but rather from judges’ inability to translate the seriousness of an offense into an actual sentence. In other terms, judges were in fact able to assess the harm caused by the offense, the blameworthiness of the defendant, and the consequences of a sentence, but were unable to formulate those factors into an appropriate punishment.
With respect to the sentencing of white collar criminals during this era, judges often found that the process of investigation, indictment and conviction were punishment enough for defendants who had no criminal history. The availability of alternatives to imprisonment, such as restitution, was also a consideration of many judges in the sentencing of white collar defendants. On the other hand, this constituted a cause for concern for those judges that feared that white collar offenders were being treated differently because judges could empathize with their plight.
An additional cause for concern during the discretionary sentencing era was the possible appearance of racial injustice. This is a charge based solely on statistics that arise from the simple fact that white defendants generally had more opportunities to gain from white collar crimes than minority defendants.
Racial injustice aside, advocates for the harsher sentencing of white collar defendants rely most heavily on the costs imposed on society by white collar crime. Although these costs are difficult to estimate, they are clearly considerable. After all, a street criminal can steal only what he can carry. With the stroke of a pen, or the push of a computer key, white collar criminals can, and do, steal billions.
Despite the costs imposed on society, the fact remains that white collar offenders are rarely prosecuted criminally. White collar defendants often have the resources to outspend prosecutors, and possess the political connections or social legitimacy needed to finagle one out of a conviction. Additionally, alternative methods of enforcement, such as civil and regulatory penalties, often prove to be a much more practical way to punish white collar criminals.
Despite doubts about the effectiveness of deterrence, the vast majority of the American public favors prison sentences for white collar offenders. This public condemnation stems from a national interest in retribution or “just desserts.” While the deterrence of white collar crime is a legitimate and important governmental interest, that interest should be weighed against the interests of justice. He who lives by the sword should die by the sword; he who lives by the pen should be subjected to something far different. Prisons, overcrowded as they are, should be reserved for violent criminals who are a danger to those they live among, not for white collar offenders who can be dealt with effectively in other ways.
Alternatives to imprisonment serve as a general deterrent and should not be dismissed as being too lenient. Those individuals who value their reputation and financial status receive their “just desserts” when such things are taken from them. Justice should be dispensed even-handedly. However, the fact is that the historically “lenient” treatment of white collar crimes stems from the simple reasoning that most white collar crimes are not as serious as violent street crimes. Most individuals would agree that a victim of credit card fraud is far more fortunate than a victim of a car jacking at gunpoint. While there is a great need to ensure that white collar offenders are caught and are required to pay a price for their misconduct, there is often little need to imprison them.
Incarcerating white collar criminals does not advance the concept of even-handed justice. On the contrary, it tips the scales and undermines the seriousness of violence. Intermediate and informal sanctions achieve the necessary goals of deterrence and retribution without giving rise to concerns over prison overcrowding, costs, safety and reintegration.
Imprisonment is not the only path to justice. Law enforcement should focus its attention on increasing the detection and prosecution of white collar crimes. Civil and regulatory sanctions should be stringent and severe. And society should be made aware that the white collar criminal is, in fact, a criminal.
