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White-Collar Criminal Gets Probation Instead of Prison. Why?

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By William Peacock, Esq. on September 04, 2014 9:01 AM

"Has the Eighth Circuit gone nuts?" It's a fair question, one posed by the venerable U.S. District Court Judge Richard Kopf after the Eighth Circuit affirmed a downward departure of between 135 and 168 months Abby Rae Cole.

The trial court, which sentenced Cole to three years of probation, noted that she was part of "one of the largest corporate frauds in Minnesota history" (a $33 million rip-off of Best Buy) and "was also a significant tax fraud" (she dodged $3 million in taxes).

Nonetheless, both the district court and the appeals court felt that she deserved leniency. Why?

Section 3553(a) Factors

Last year, the Eighth Circuit remanded this same case for resentencing and elaboration on its reasons for departure under 18 U.S.C. § 3553(a), as the trial judge's only explanation previously was that "It would be a travesty of justice if I sent you away for a long period of time."

On remand, after briefing and argument for the parties, the judge apparently presented a much more convincing explanation for leniency. The Eighth Circuit, however, only provided a cursory summary of the district court's treatment of the factors in its short opinion, which included:

  • "[T]his is an 'unusual, extraordinary case in which a sentence of three years probation was appropriate'";
  • "[T]he numerous restrictions Cole endured while on probation";
  • "[T]he 'lifelong restrictions' she faces as a federal felon";
  • "Cole would be less likely to commit further crimes as she 'has a far greater likelihood of successful rehabilitation with family support and stable employment'";
  • "Cole served a more minor role as, in the court's judgment, she was 'mostly a passive, although legally responsible, participant'";
  • "[S]he had no prior contact with law enforcement";
  • "[She] was 'markedly different' than 'most of the fraudsters who appear before th[e] Court' in that Cole 'is not a consummate fraudster, she is not a pathological liar'"; and
  • "[T]he probationary sentence would allow Cole to work and earn money to make restitution to the victims of the fraud."

Bewildered Reactions

Professor Douglas Berman, the author of the ever-informative Sentencing Law and Policy blog, wrote that the ruling "strikes me as a one-in-a-million outcome: I cannot recall another case (out of the nearly million cases that have been sentenced in the federal system since Booker) in which the defendant faced a guideline range of 11 to 14 years and received a sentence of probation."

He reiterated the trial court's description of the case (largest fraud in state history, tax-dodger), and pointed out another key fact: She neither pleaded guilty nor provided substantial assistance to the government, two common reasons for downward departures.

Berman makes two predictions: that this case will be cited by every future white-collar defendant in the federal system, and for that reason, that the Justice Department will seek certiorari.

Judge Kopf adds a very interesting point as well: Judge Alice Murphy, who was on the panel who approved the variance, is a former Chair of the Sentencing Commission and "her stamp approval carries much weight." Kopf, however, doesn't think that the five-page opinion will carry much weight due to its brevity.

Personally? I find it hard to see how anyone can read this case and not think privilege. What felons don't face "numerous restrictions" while on parole and "lifelong restrictions" overall? And wouldn't all felons be more likely to be able to earn money and pay restitution if they were put on probation? Showing mercy to a first-timer makes sense, but what message is relayed when you send drug offenders away for decades and let a woman who helped steal $33 million off with probation?

Cursory, conclusory statements about likelihood of rehabilitation and the unusual and extraordinary nature of the case don't justify a get-out-of-jail-nearly-free pass for anyone. And if there really are some extraordinary factors, why does the panel stick to a five-page opinion, rather than limiting the possible impact of their opinion by going into detail?

What do you think? Has the Eighth Circuit lost its marbles? Tweet us @FindLawLP.

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