A White-Collar Sentenc...

A White-Collar Sentence of 330 Years

May 7, 2008

A federal judge sentenced 72-year-old Norman Schmidt last week to a mind-bending 330-year prison sentence after he was found guilty last May of a laundry list of conspiracy and fraud charges. Barring a scientific breakthrough in cryogenic technology, Schmidt will spend the rest of his days behind bars.

"When I first saw the headline, I said, 'Is that right—years? They must mean months,' " says Douglas Berman, a sentencing expert and law professor at Ohio State University. Berman, who has written about the sentence on his blog, calls it the longest he has seen since the Supreme Court ruled that federal sentencing guidelines were advisory—rather than mandatory—in 2005.

Prison terms for white-collar offenders have trended higher in recent years. The increase is rooted in the implementation of federal sentencing guidelines intended to establish parity between "crime in the streets and crime in the suites," Berman says, and the Department of Justice has pushed for tougher sentences in the aftermath of Enron and other recent white-collar scandals.

Judges now focus more on the offense—and less on the offender—when sentencing white-collar convicts. As a result, they effectively tally up the amount of losses and number of victims to calculate a punishment, Berman says.

The math did not work out well for Schmidt.

According to the Department of Justice, hundreds of investors gave Schmidt tens of millions of dollars. Schmidt and others said they would invest the money and promised monthly returns of between 2 and 200 percent.

But instead, Schmidt and others used the money for different purposes. During the course of the investigation, federal agents seized cash in roughly 60 bank accounts, property, eight NASCAR racecars, and one racing truck.

Under the terms of the sentence, Schmidt would be released from prison in 2338. "Then again," Berman says in his blog post, "with 15 percent good-time credit, Schmidt may be able to get out as early as the year 2289."

http://money.usnews.com/money/blogs/the-collar/2008/05/07/a-white-collar-sentence-of-330-years