United States v. Adelson - 441 F. Supp. 2d 506 (S.D.N.Y. 2006)

Rule:

18 U.S.C.S. § 3553(a) expressly dictates that a court shall impose a sentence sufficient, but not greater than necessary, to comply with the purposes set forth in paragraph (2) of the subsection.

Facts:

Superseding indictment S2 05 Cr. 325 (JSR) charged defendant Richard P. Adelson with one count of securities fraud, eight counts of causing false reports to be filed with the U.S. Securities and Exchange Commission ("S.E.C."), two counts of soliciting proxies through false statements, and one count of conspiring with others to commit such acts. The Complaint alleged that defendant, as Chief Operating Officer and President of Impath, Inc., a public company specializing in cancer diagnosis testing, joined a conspiracy, initially concocted by others, to materially overstate Impath's financial results, thereby artificially inflating the price of its stock. The jury found that the defendant only joined the conspiracy toward the end. At defendant’s sentencing, the Government argued that the Sentencing Guidelines, if properly calculated in the defendant’s case, called for a sentence of life imprisonment. Defendant’s counsel, by contract, argued that the proper guideline calculation resulted in a guideline range of 21 to 27 months' imprisonment, and urged that the actual sentence be well below that range. In the end, however, the Court imposed a non-guideline sentence of 42 months imprisonment (i.e., three-and-a-half years), plus restitution in the amount of $ 50 million, immediate forfeiture of $ 1.2 million, three years of supervised release to follow imprisonment, and a life-time ban from being an officer or director of a public company. The government appealed.

Issue:

Was the court’s decision to impose a non-guidelines sentence on defendant justified?

Answer:

Yes. The court submitted a memorandum explaining its non-guidelines decision.

Conclusion:

The court explained its decision for imposing a non-guidelines sentence on defendant. The court chose to focus, not on actual loss, but on intended loss, finding that defendant could have foreseen when he joined the conspiracy a 20% further decline in stock price, or a loss of around $ 50 million. The court saw defendant as closer to an accessory after the fact, a position deserving of a lesser punishment. His past history was exemplary. However, defendant's misconduct called for serious punitive measures and retribution. The court imposed the full amount of the loss as restitution, requiring immediate forfeiture of all current assets, and prison time. Forty-two months was more prison time than imposed on the chief executive officer, other conspirators, and other white-collar offenders. The court endeavored to apply 18 U.S.C.S. § 3553(a)'s factors to the circumstances and to the individual as reasonably as it could.