After a long period of steadily increasing federal prison terms for economic crimes, the U.S. Sentencing Commission has announced that it is considering changes to the guidelines for calculating punishments for many white collar crimes.  On August 14, 2014, the Commission identified its policy priorities for the current cycle for proposing amendments to the federal criminal sentencing guidelines.

The Commission identified several top priorities, which are focused on addressing the crisis of growth in prison populations and the increasing costs of incarceration.  In particular, the Commission will consider changes to Section 2B1.1 of the sentencing guidelines and related provisions which govern fraud and other white collar crimes.  It appears that changes may be proposed that could dramatically affect the way that sentences are determined, shifting away from a heavy reliance on the calculation of financial loss while striving to better measure the nature of economic crimes and the individual defendant’s culpability.

In announcing its focus on these issues, Chief U.S. District Judge and Chair of the Commission Patti B. Saris stated:  “For the past several years, we have been reviewing data and listening to key stakeholders to try to determine whether changes are needed in the way fraud offenses are sentenced in the federal system, particularly in fraud on the market cases . . .   We look forward to hearing more this year from judges, experts, victims, and other stakeholders on these issues and deciding whether there are ways the economic crime guidelines could work better.”

In addition, the Commission’s top priorities also include continuing work to reduce the severity and scope of mandatory minimum sentences, further revisions to reduce punishments for certain non-violent offenses, and studying possible changes applicable to immigration offenses.

The current state of sentencing for economic crimes reflects public outcry that followed Enron and other crises in the early 2000s and continued to rise through the economic collapse in 2008.  The result has been a steady increase in the length of prison sentences for white collar crimes, where federal courts routinely hand out sentences of 10 or 20 years – and sometimes significantly more – in a wide variety of fraud cases.

For years, many have called for review and reform of the guidelines calculations for white collar crimes, as the length of federal prison sentences have grown excessively harsh.  For example, an American Bar Association task force presented a proposal to shift emphasis away from the calculation of monetary loss, which many have criticized as producing absurd (or at least disproportionate) results in some cases.  The A.B.A. recommended a better framework for measuring a defendant’s culpability and emphasizing the discretion of the judge imposing the sentence.

Many who practice in the federal white collar bar are encouraged by the Sentencing Commission’s attention to these issues and would welcome much needed reforms that address the harshness and rigidity of the current sentencing regime.  The Commission plans to study the issues, hold hearings, and solicit comments, in order to propose amendments to the sentencing guidelines, which will be sent for Congress’ consideration by May 2015.  Consequently, real change will not occur until Congress takes the actions necessary to reform the current federal sentencing regime.