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1-Day Sentence for White Collar Felon Vacated by 6th Cir.

By William Peacock, Esq. | Last updated on

What's the primary reason a sentence is imposed: to punish the offender or to deter others?

If it's the former, then a white collar criminal -- who has little to no chance of repeating his crime now that he's tagged with a felony record, likely lost any professional licensure, and spent a ton of his hard-stolen cash on defending himself in court -- shouldn't serve a lengthy sentence. This is why Paul Musgrave was given a one-day sentence, with credit for for the day of processing -- essentially no sentence at all. (h/t to the ever-great Sentencing Law and Policy Blog)

But if you're worried about deterrence, look to the Sixth Circuit's ever widening body of case law that basically demands at least some imprisonment, even if the offender is unlikely to recidivate.

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The Case for a Short Sentence

Paul Musgrave, the defendant, got screwed. Along with his co-defendant, Raymond Goldberg, he cut a few corners in order to obtain an SBA loan for a tire recycling plant in Ohio. Goldberg, unbeknownst to Musgrave, had failed in nine previous tire-recycling ventures. This time, after the pair took some shortcuts with the paperwork (including making some pretty serious misstatements in order to disguise Goldberg's ownership of both the equipment supplier and the tire plant itself -- in other words, self-dealing), Goldberg absconded with the cash.

Musgrave lost everything, including his $300,000 investment.

Goldberg, of course, turned government's witness and took a plea deal for probation. The district court, frustrated by the sweetheart deal given to the more culpable offender, laid out a pretty compelling case for leniency:

A downward variance is required to acknowledge that the Government imposed a similar sentence on its cooperating witness whom the Court concluded, upon Defendant's trial, was by far the principal wrong-doer. The sentence also acknowledges that Defendant's characteristics and history reflect a 60 year old who has had no contact with the justice system and has aided the community enormously. Deterrence has been effected based upon the felony convictions and the likely loss of his CPA license. The sentence facilitates the payment of restitution. Defendant suffers from a potentially fatal condition (sleep apnea requiring a breathing machine while sleeping) that the BOP cannot properly treat. Defendant is of an age where he is not likely to re-offend.

The Case for Imprisonment

The Sixth Circuit, however, was not impressed by the use of "collateral consequences" (public embarrassment, loss of licensure), which are "impermissible factors" in sentencing:

Impermissible considerations permeated the district court's justification for Musgrave's sentence. In imposing a sentence of one day with credit for the day of processing, the district court relied heavily on the fact that Musgrave had already "been punished extraordinarily" by four years of legal proceedings, legal fees, the likely loss of his CPA license, and felony convictions that would follow him for the rest of his life. "[N]one of these things are [his] sentence. Nor are they consequences of his sentence"; a diminished sentence based on these considerations does not reflect the seriousness of his offense or effect just punishment. [citation] On remand, the district court must sentence Musgrave without considering these factors.

The brief, unanimous opinion goes on to cite past opinions and justifications for imprisonment, including where the court noted that white collar crimes are "prime candidates for general deterrence" and a previous white collar case where this same court had rejected a one-day sentence.

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