Monday, November 16, 2009

Eleventh Circuit Reverses Sentence In HealthSouth Accountants Case - White-Collar Crime Sentence Needs To Be Serious Punishment

Today, the Eleventh Circuit made a number of white-collar criminals nervous.  In United States v. Kenneth K. Livesay (08-14712), the Eleventh Circuit vacated and remanded the sentence given to Kenneth Livesay for his role in "an illegal scheme to artificially inflate HealthSouth’s earnings and to falsely report HealthSouth’s financial condition is at the heart of the fraud."  The court noted the fraud has also been reported in a number of prior decisions: See, e.g., United States v. Livesay, 484 F.3d 1324, 1326 (11th Cir. 2007); United States v. Martin, 455 F.3d 1227, 1230-31 (11th Cir. 2006); United States v. McVay, 447 F.3d 1348, 1349-50 (11th Cir. 2006); Livesay v. United States, 128 S. Ct. 872, 169 L. Ed. 2d 712 (2008).
We went on to reason that “[d]efendants in white collar crimes often calculate the financial gain and risk of loss, and white collar crime therefore can be affected and reduced with serious punishment.” Id. (emphasis added). If a would-be white-collar criminal could steal millions of dollars, place the money in an off-shore bank account, serve his probationary sentence, and then be free to start a new life with his newly acquired fortune, this court sees little incentive for that person to think twice before concocting such a scheme. As we stated in Martin, the message of such a sentence “is that would-be white-collar criminals stand to lose little more than a portion of their ill-gotten gains and practically none of their liberty.” Id. As the threat of a seven-day prison sentence was not adequate to deter the criminal conduct at issue in Martin, even more so the threat of spending time on probation simply does not, and cannot, provide the same level of deterrence as can the threat of incarceration in a federal penitentiary for a meaningful period of time.
Accordingly, because the sentence imposed in this case is not reasonable in light of the sentencing factors outlined in § 3553(a), we once again vacate the sentence and remand this case to the district court for resentencing. Not only do we hold that the particular sentence imposed below is unreasonable, but we also hold that any sentence of probation would be unreasonable given the magnitude and seriousness of Livesay’s criminal conduct. As we stated in Martin, only the imposition of a meaningful period of incarceration will meet the goals that Congress laid out in the sentencing statute.


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