TABLE OF CONTENTS INTRODUCTION I. THE EMERGENCE OF CURRENT WHITE-COLLAR SENTENCING POLICY A. Reforms Before United States v. Booker B. Discretion Returns After Booker C. White-Collar Sentencing Mitigation After Booker II. VOLUNTARY RESTITUTION: CAN OFFENDERS AUTOCORRECT, AND SHOULD THEY? A. Voluntary Restitution Compensates Victims and Reduces Criminal Justice Costs B. Addressing the "Buyout" and Redundancy Problems... III. PROPOSED RULES FOR THE EXPANDED CONSIDERATION OF VOLUNTARY RESTITUTION IN SENTENCING A. The Initial Step: Giving Restitution-Based Mitigation a Distinct Role in the Sentencing Process. B. Defining the Scope and Effect of Restitution-Based Mitigation in Individual Cases. CONCLUSION Introduction
For decades, policymakers and the public have condemned the inadequacy of the law governing punishment for white-collar crimes. (1) In response to this ferment, all three branches of government have transformed that law. Some reforms have flourished and others have foundered: determinate sentencing has come and gone, but more sophisticated frameworks for linking punishment to harm and culpability have emerged and may continue to develop. Throughout this process, the severity and scope of recommended carceral penalties for white-collar offenses has steadily grown, ensuring that stiff punishments await all serious offenders, in proportion to the harm they have caused. Such changes have likely increased the deterrence and expressive-retributive effects of the law governing white-collar crime.
With these reforms in place, it is now time to consider cost-effective, complementary sanctions designed to encourage prompt victim redress and socially beneficial behavior. Although prison sentences rightfully play an important role in the means of punishment mix, incarceration should not overpower other measures that can limit the adverse societal impacts of white-collar crime. Such wrongdoing causes economic harm in the first instance, and punishment for it should aim, at least in significant part, to efficiently and effectively minimize that harm. Starting from that premise, this Comment argues that courts and the United States Sentencing Commission (USSC) should encourage restorative behavior by expanding formal measures to modestly mitigate carceral punishment when an offender voluntarily and promptly pays victims restitution.
Restitution is a familiar tool. Court-ordered restitution is used widely in white-collar cases, and voluntary restitution also plays a background role, although published decisions rarely acknowledge and examine it. While the availability of mandatory restitution may appear on its face to obviate the need to encourage offenders to voluntarily repay their victims, a closer look at existing practices demonstrates that the prevailing mandatory approach is ineffective. Mechanisms for enforcing restitution judgments are imperfect at best, collection rates are abysmally low, and offenders use a panoply of evasive tactics to avoid their obligations. (2) Consequently, mandatory restitution orders may have expressive value, but their restorative effects tend to fall short of the mark. Their use in lieu of possibly more helpful alternative measures fails to leverage the power of the courts to induce remedial, and possibly more socially responsible, behavior.
The policy considerations motivating the drive to incarcerate economic offenders and expand the use of mandatory restitution have been sound. Efforts to strengthen the deterrent effect of laws governing economic crimes and to bring punishments for those crimes into closer alignment with punishments for "street crimes" have made white-collar prison sentences fairer, and also more responsive to public assessments of reprehensibility. In the aftermath of outbreaks of financial mega-crimes, such as the Adelphia, Enron, Tyco, and WorldCom frauds, sentencing reforms have ensured that the scale of available punishments has increased to fit the scale of actual crimes.
It is now time to expand on these reforms by turning to victims' interests. As United States v. Booker (3) and its progeny settle into our sentencing scheme, a paradigm shift in sentencing is at hand. Federal judges now have considerably more leeway to make individualized sentencing decisions and must balance the principal theories of punishment when making these decisions. Rather than rely solely on the United States Sentencing Guidelines, judges may now impose punishments that deviate from those Guidelines, provided that their punishments comport with the considerations set forth in the governing statutes. With the return of judicial discretion to the sentencing field, it is not only possible but may indeed be necessary to develop a structural approach to white-collar sentencing that is more responsive to victims' compensatory interests. Without one, we may witness a slow erosion of the uniformity obtained by two decades of binding sentencing policy: judges may increasingly use their newly granted discretion to impose ad hoc sentences that recognize offenders' voluntary attempts to compensate victims in individual cases, potentially leading to fractured and unpredictable sentencing practices. (4) Formally recognizing and expanding the role of restorative measures through the U.S. Sentencing Guidelines encourages judges to consider victim interests in a uniform manner. This may, in turn, promote more uniform sentencing outcomes overall.
In recent years, scholars and practitioners debated many possible sentencing policy changes. Some, but relatively few, have made detailed proposals for the expanded use of complementary or alternative punishments. Indeed, since Booker, much commentary on white-collar sentencing has focused on rethinking the measurement of economic loss (5) and its role in the existing sentencing framework. (6) Other authors have addressed problems of overcriminalization, (7) overpunishment or context-insensitive punishment, (8) and underpunishment. (9) A smaller set of authors have addressed noncarceral measures. Several of these authors have discussed introducing to the sentencing process sanctions such as shaming, (10) criminal fines pegged to offenders' wealth, (11) asset forfeiture, (12) and computer use restrictions for Internet offenders. (13) Others have addressed, and recommended, the use of "restorative justice" to supplement existing white-collar punishment. (14) The role of restitution, meanwhile, appears to have only entered the literature in passing or as a subsidiary component of proposed reforms. (15)
Among these authors, Professor Stephanos Bibas describes one alternative approach to sentencing after Booker. Professor Bibas argues that combining "short but certain terms of imprisonment" with the use of restitution and other noncarceral sanctions will permit the USSC to "foster deterrence, inflict retribution, express condemnation, and heal victims at a fraction of the cost," thus "calibrat[ing] white-collar sentences to their core purpose." (16) This Comment does not question the soundness of current Guidelines-range sentences. Instead, this Comment urges courts and the USSC to continue the white-collar sentencing "calibration" process by establishing formal measures to more fully recognize the voluntary, pre-sentencing payment of victim restitution by offenders--a reform that imposes fewer costs or administrative burdens than most other proposed complementary sanctions.
By using voluntary restitution for "autocorrection" as a "carrot" to balance the "stick" of incarceration, courts can encourage offenders to directly and promptly repay victims. If voluntary restitution emerges from the shadows of the sentencing process in a form that can be reliably recognized and applied, more offenders might be persuaded to cooperate. Such an incentive would reduce the destructive impact of financial crime, which judges must already consider when sentencing white-collar offenders.
Restitutive principles need not (and should not) be the only principles animating criminal punishment. (17) Nonetheless, they advance substantial public interests and should play a wider, more explicit role in the sentencing process. Toward that end, this Comment argues in favor of expanding the role of voluntary restitution as a complementary measure that judges may use to modestly mitigate existing Guidelines-range sentences. Operating in this way, voluntary restitution does not compromise existing punishments. Instead, the proposed reform provides judges and offenders with a device that leads to better calibrated sentencing outcomes.
Resultantly, this Comment discusses the unique contribution that voluntary restitution can make to the white-collar sentencing process and sets forth a comprehensive proposal for encouraging it through the post-Booker federal sentencing process. Part I summarizes the development and current state of white-collar sentencing law, Part II discusses the advantages and drawbacks of accounting for voluntary restitution in sentencing, and Part III sets forth a proposed reform.
THE EMERGENCE OF CURRENT WHITE-COLLAR SENTENCING POLICY
REFORMS BEFORE UNITED STATES V. BOOKER
Starting in 2001, a spate of corporate scandals thrust white-collar crime into the spotlight. Enron came first, (18) followed in turn by WorldCom, (19) Tyco, (20) and Adelphia. (21) Commentators responded with outrage, and a majority of the public supported far-reaching reforms. (22)
Congress took notice, and passed the Sarbanes-Oxley Act (SOX) in July 2002.23 SOX included components intended to effectuate corporate governance and accounting reform (24) as well as provisions that addressed white-collar sentencing. (25) The former provided tools to deter or otherwise prevent future frauds, while the latter directed the USSC to impose stiffer punishments for white-collar crimes, especially highly egregious ones, such as frauds that threaten the financial solvency of more than fifty...