In Securities Fraud Case, Second Circuit Affirms Downward Variance from Life to 42 Months in Prison

Proving that the elevator of sentencing discretion truly moves in both directions, the Second Circuit in United States v. Adelson, 06-2738-cr(L), 2008 WL 5155341 (2d Cir. December 9, 2008) (a summary order), affirmed Judge Rakoff’s downward variance from life in prison to 42 months.  The defendant had been convicted of securities fraud, and in his opinion explaining the sentencing decision, Judge Rakoff had spotlighted “the utter travesty of justice that sometimes results from the guidelines’ fetish with abstract arithmetic, as well as the harm that guideline calculations can visit on human beings if not cabined by common sense.”

Quoting its landmark en banc ruling in United States v. Cavera, 2008 WL 5102341 (2d Cir. December 4, 2008) (discussed here) – where the Court had acknowledged that certain kinds of crimes, including financial cases, may produce non-Guidelines sentences based on the “wide variety of culpability amongst defendants,” which, “if adequately explained, should be reviewed especially deferentially” – the Court held that Adelson was “just such a case.”  The Court expressly rejected the government’s argument that the district court had essentially substituted its “personal view of the seriousness of the offense” for the Guidelines.  Rather, the Court concluded, “the record demonstrates that the District Court’s decision to impose a below Guidelines sentence was not a failure or refusal to recognize the Guidelines, but rather a carefully considered reliance on the Section 3553(a) factors.”

Lawyers: Mark S. Arisohn and Jonathan Gardner, Labaton Sucharow & Rudoff LLP (defendant); AUSAs Raymond J. Lohier, Jr., Alexander H. Southwell, Katherine Polk Failla