Sentencing - Plea Bargaining and the Right to Trial (9/25/11)

As tax crimes practitioners know, the vast majority of tax crimes indictments end in a plea agreement. This is true of federal crimes generally. The plea agreement the prosecutor offers usually materially raises the risks of going to trial as opposed copping a plea. We also know that the inducements can include the obvious -- acceptance of responsibility 2 or 3 level downward adjustment to the Guidelines offense level calculation and, where appropriate, a 5K1 departure for substantial cooperation. But the plea equation can also be manipulated in other ways probably not intended by the Guidelines. This means that the prosecutors can make the plea deal so sweet that, in many cases, a defendant cannot take the risks of exercising his or her Sixth Amendment right to go to trial.  At one level, that is the nature of the plea agreement; at another level, it can be corrosive to the system as we imagine it.

In a very thoughtful opinion in United States v. Ring, ___ S. Supp. 2d ___, 2011 U.S. Dist. LEXIS 106217 (D DC 2011), here (and with appendix here), Judge Segal Huvelle of the DC District Court addresses these manipulations of the Guidelines sentences to discourage the exercise of the Sixth Amendment right to trial. Ring was one of the lobbyists caught up in the Abramoff affair. Several, including Ring, were affiliated with the Greenberg Traurig law firm. There were others, including a congressman.  Ring was the only one of the targets to go to trial -- the others found the plea deal the prosecutors offered to be just to good to go to trial. As a result of going to trial (and perhaps in some form of perverse punishment for going to trial), the prosecutors sought to managing the sentencing to make the punishment harsh indeed compared to those who pled. I won't go into all the detail of how the prosecutors sought to mete out extra punishment through the Guidelines calculations for Ring. I cite below several articles that flesh this out. Suffice it to say, Judge Huvelle navigated the Guidelines to take away the sting the prosecutors sought to impose.  As a predicate to doing so, Judge Huvelle has a very thoughtful discussion of just how corrosive the process can be.  For that reason, I strongly recommend that the reader interested in this subject, read the opinion.

I point out several things that about the opinion that I find interesting:

1. The Court points out the discrepancy in the parties calculations as follows (footnote omitted):

Before the Court is the matter of calculating the appropriate sentence for defendant under the Sentencing Guidelines. The parties' respective positions could hardly differ more dramatically. By the government's calculation, Ring's total offense level is 37, corresponding to a Guidelines sentence of 210 to 262 months. Defendant, however, calculates his offense level as 16, 3 resulting in a Guidelines range of 21-27 months—a difference of approximately 17 years.

2. Seeking to justify the relatively light punishment in the plea deals that preceded this case, the prosecutors claimed virtually unfettered discretion to manipulate the Guidelines factors in plea deals to induce pleas, with the result that those like Ring going to trial would be punished in ways not anticipated by the Guidelines. And, of course, the use of the Guidelines to create risks not contemplated from going to trial does implicate Sixth Amendment concerns.

3. One way prosecutors may manipulate the plea deal is by fact bargaining, which the Guidelines do not contemplate. The Court said (footnotes omitted):

Our system of sentencing is in part designed to ensure that sentences are based upon "the real conduct that underlies the crime of conviction." Booker, 543 U.S. at 250 (Remedial Op., Breyer, J.). "One of the principal reasons for this, as expressed by the Court, is to prevent prosecutors, when they make charging decisions, from 'exercis[ing] a power the Sentencing Act vested in judges.'" United States v. Stewart, 590 F.3d 93, 161 n.13 (2d Cir. 2009) (Calabresi, J. concurring) (quoting Booker at 257). Plea agreements must therefore "set forth the relevant facts and circumstances of the actual offense conduct and offender characteristics" and may "not contain misleading facts." U.S.S.G. §6B1.4(a)(1), (2). The end result is that under the Guidelines, prosecutors therefore may not "swallow the gun"—that is, "hide[] evidence from the sentencing judge if defendant pleads guilty but regurgitate[] it where the plea deal f[alls] through." United States v. West, 552 F. Supp. 2d 74, 77 (D. Mass. 2008); accord United States v. Salazar, 983 F.2d 778, 784 (7th Cir. 1993). Even where §1B1.8 19 applies, and the government is thereby permitted under the Guidelines to advocate for a sentence based on "facts" that do not capture a defendant's true offense conduct, "[t]his provision does not authorize the government to withhold information from the court." §1B1.8 cmt. n.1. Others have noted, however, that while the Guidelines may proscribe fact bargaining, they do not prevent it in practice. See Booker, 543 U.S. at 290 (Remedial Dissent, Scalia, J.) ("[T]he premise on which the Court's argument is based—that the guidelines as currently written prevent fact bargaining and therefore diminish prosecutorial power—is probably not correct. As one commentator has noted: '[P]rosecutors exercise nearly as much control when guidelines tie sentences to so-called 'real-offense' factors . . . . One might reasonably assume those factors are outside of prosecutors' control, but experience with the Federal Sentencing Guidelines suggests otherwise; when necessary, the litigants simply bargain about what facts will (and won't) form the basis for sentencing.'" (quoting Stuntz, Plea Bargaining and Criminal Law's Disappearing Shadow, 117 Harv. L. Rev. 2548, 2559-2560 (2004) (omission in original).).

4. In negotiating the plea deal to pre-wire the Sentencing Guidelines factors, defense attorneys often are concerned that the probation office and/or the sentencing court may inquire about and assess the facts differently than the parties have agreed to in the plea agreement. The Court addressed this phenomenon in the Ring, noting that the probation office and/ or the district court have limited ability to go beyond the facts agreed to in the plea agreement. The court thus noted (fn. 21):

n21 This Court can recall only once prior instance in twelve years where a probation officer recommended a materially different Guideline calculation than that agreed to by the parties. See also Remarks of Judge Patti B. Saris, quoted in Wendy L. Pfaffenbach, Federal Judges Reveal Tips on Evidence, Mass. Law Wkly., Mar. 19, 2001 at B12 ("Sometimes the government and defendant have reached a plea agreement and probation disagrees with both the defendant and the government. In this situation, if I hold a [sentencing] hearing, it's an awkward proceeding . . . .").

This just confirms the risk, but also notes that it is a risk that rarely comes home to roost. For example, the principal Guidelines factor in most tax sentencings is the tax loss. The IRS CI investigating team may have determined a very large tax loss that gets incorporated into the Special Agent's Report ("SAR") and even original indictment. During the plea negotiations, the defense team and the prosecutor negotiate a significantly lesser tax loss that knocks the levels down 1 or more, thus significantly reducing the Guidelines sentencing range. The concern is that the probation officer or the Court might pick up on the indictment (or, in the case of the probation officer, the SAR even when the tax loss is not alleged in the indictment) to revisit the issue of the real tax loss. I have never had that happen, but it could.  And, of course, through lenient determination of what is the "criminal" tax loss, the ultimate sentencing results can be dramatically reduced, all to induce a plea and avoid a trial.

Links for other discussions:

Kevin Ring Sentencing (White Collar Crime Prof Blog 9/20/11), here.

Mary Jacoby, Judge Rejects Recommended Sentence for Ex-Abramoff Lobbyist (Main Justice 9/20/11), here.

Doug Berman, Important Sentencing Ruling in Favor of Lobbyist Involved in Abramoff Scandal (Sentencing Law and Policy Blog 9/20/11), here.

For a variation on the theme in the Florida's court system, see Robert A. Oppel, Jr., Sentencing Shift Gives New Leverage to Prosecutors (New York Times 9/25/11), here.