U.S. Sentencing Commission Data on Money Laundering and BSA-Related Offenses Reveals:  Courts Often Sentence Below the Guidelines Range

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Sentencing is a critical stage in the federal criminal process, particularly given the incredibly high rate of guilty pleas in federal court.  There is a very strong argument that sentencing far eclipses the importance of the increasingly rare trial in the federal criminal system.  If a federal criminal investigation cannot be “killed,” then in many cases – particularly in “white collar” cases – the focus early on for both the defense and the prosecution is the sentencing hearing, and how to maximize one’s position, because a federal charge often produces a conviction via plea, or less often, via trial.  Stated otherwise, federal criminal defense is often all about sentencing.

At sentencing, sometimes defendants – and, less often, the prosecution – will make arguments regarding “similarly situated” defendants, and the sentences that they received.  Sometimes these arguments resonate with the sentencing court; sometimes not.  Regardless, these arguments can be tricky because reliable “statistics” are elusive, and it’s not always clear that justifiable comparisons are being drawn by either side.  We therefore were interested when the U.S. Sentencing Commission (“the Commission”) recently issued the Judiciary Sentencing Information (“JSIN”) platform.  Although it is difficult to draw clear conclusions from the JSIN platform, the data is nonetheless fascinating, and we discuss in this blog potential insights into sentences for money laundering and Bank Secrecy Act (“BSA”) offenses.

We have reviewed the data and created summary charts for your consideration.  Because the Commission has invited federal judges to use the JSIN platform when sentencing, it by definition is relevant to defense attorneys and prosecutors.

The Commission describes the platform as follows:

The Judiciary Sentencing Information (JSIN) platform is an online sentencing data resource specifically developed with the needs of judges in mind. The platform provides quick and easy online access to sentencing data for similarly-situated defendants. JSIN expands upon the Commission’s longstanding practice of providing sentencing data at the request of federal judges by making some of the data provided through these special requests more broadly and easily available. If the court does consider the sentencing information provided by JSIN as part of its consideration of the factors in 18 U.S.C. § 3553(a) when imposing sentence, it should do so only after considering the properly calculated guideline range and any applicable departures provided for in the [U.S. Sentencing] Guidelines Manual.

The home page and related FAQs for the JSIN platform are available here.  Through the platform, a user can extract data on defendants sentenced during Fiscal Years (“FYs”) 2016 to 2020 by selecting (1) the relevant U.S. Sentencing Guidelines (“USSG”) provision; (2) the Final Offense Level calculated under the Guidelines; and (3) the relevant Criminal History Category (“CHC”).  The data excludes defendants who received a USSG §5K1.1 downward departure for cooperation with the government.

As we discuss, most defendants sentenced within the last several years for money laundering and BSA offenses have received sentences below the advisory Guidelines sentencing range.  Given the U.S. Supreme Court opinion in United States v. Booker, that observation is not surprising.

Money Laundering Offense Sentencing Data

Using the data, we created the below chart for all data regarding defendants sentenced under USSG §2S1.1, the primary Guideline provision for money laundering offenses (18 U.S.C. §§ 1956 and 1957), with a CHC of I.  Our chart skips offense levels for which there was no available data.  As the chart reflects, almost every Final Offense Level involves average and median sentences below the advisory Guideline range.  Of course, these numbers are only averages and medians, and likely are based on imperfect data.  As required by 18 U.S.C. § 3553(a), every defendant must receive an individually-tailored sentence.

For a more complete picture, the average and median numbers in the above chart – which pertain only to defendants who received a sentence of imprisonment – should be considered by also accounting for the percentages of defendants who did not receive a sentence of imprisonment.  This will reduce the average and median numbers reflected on the chart.  For example, 25% of defendants sentenced at Offense Level 17 did not receive prison.  Accordingly, the average number of months of imprisonment for all defendants sentenced at Offense Level 17 is actually around 12.75 months, not the 17 months reflected by the chart (17 x .75 = 12.75).

Although the JSIN data is presented in a vacuum and therefore does not explicitly support the following, many of the defendants sentenced at the extremely high end of the Sentencing Guidelines – i.e., those receiving sentences of 10 to 25 years or more (and there are many such defendants) – presumably also were charged with drug distribution offenses, which explain the very high sentences.  Distilled, although the money laundering charges happened to represent the “primary” charge under the Sentencing Guidelines, the Final Offense Level determination for the very high sentences – driven by quirks in the Guidelines calculation analysis – likely rested on underlying drug charges, or other very serious underlying charges.

BSA Offense Sentencing Data

We also created the below chart for all data regarding defendants sentenced under USSG §2S1.3, the primary Guideline provision for BSA-related offenses, with a CHC of I.  Bear in mind that the vast majority of the below defendants likely were individuals convicted of structuring cash transactions in order avoid or prevent the filing of a Currency Transaction Report.  Section 2S1.3 also applies to bulk cash smuggling; failing to file a (or filing a false) required Report of International Transportation of Currency or Monetary Instruments, or CMIR; failing to file a (or filing a false) required Report of Foreign Bank and Financial Accounts, or FBAR;  and failing to register with FinCEN when required as a Money Services Business.

Yet again, the chart reflects that defendants generally received average and median sentences below the advisory Guideline range, subject to the same limitations described above – with some of the defendants in the highest Final Offense Level categories receiving the largest downward variances.

Comparison to Fraud Sentencing Data

We further compared this data against data for defendants sentenced under USSG §2B1.1, the primary Guideline provision for fraud offenses, again with a CHC of I.  Fraud defendants with higher Final Offense Levels almost always received lower average and median sentences than money laundering defendants with the same Final Offense Level, but higher average and median sentences than BSA-related defendants with the same level.  This outcome strongly suggests that, even when the Final Offense Levels and Criminal History Categories are identical, courts generally regard money laundering defendants as more deserving of punishment than fraud defendants, whom courts in turn generally regard as more deserving of punishment than defendants convicted of BSA-related offenses.  This strongly suggests that other, less quantifiable factors regarding the circumstances of particular defendants and particular cases, not directly reflected by the USSG numerical calculations, can play an important role in sentencing outcomes.

However, what is noticeable about the JSIN data for fraud defendants is that such defendants very rarely received probation.  Accordingly, the above observation suggesting a hierarchy of perceived culpability and outcomes (money laundering is “worse” than fraud, which is “worse” than BSA offenses) must be taken with a note of caution, because the observation does not necessarily hold true for particular Final Offense Levels after the impact of probation is accounted for.  For example, and sticking with our example of a defendant with a Final Offense Level of 17, the average number of months of imprisonment for all defendants sentenced at Offense Level 17 for money laundering is actually around 12.75 months.  For BSA-offense defendants with a Final Offense Level of 17, the average number of imprisonment for all defendants is 12.9 months (.86 rate of incarceration x 15 months) – an average that is slightly higher when compared to all money laundering defendants.  And, as reflected below, the average number of months of imprisonment for all defendants sentenced at Offense Level 17 for fraud offenses is around 17 months (.81 rate of incarceration x 21 months) – the highest average rate of incarceration of all.

Like both money laundering and BSA-related defendants, fraud defendants generally received average and median sentences below the advisory Guideline range.  These findings are also subject to the same limitations described above.

USSG “Quick Facts” on Money Laundering Offenses

The Commission publishes other summary data for specific types of offenses, including money laundering (but nothing specific for BSA-related offenses).  The “Quick Facts” published by the Commission for money laundering offenses are here (setting forth data for FY 2020).  The Quick Facts reflect that the numbers of defendants annually sentenced for money laundering generally have declined.  Although the median loss for such offenses generally has increased over time, the average sentence conversely has declined slightly: the average sentence for money laundering defendants during FY 2020 was 64 months, whereas the average sentence for money laundering defendants during FY 2016 was 68 months.

Further, the number of defendants receiving sentences within the applicable advisory Guideline range has decreased steadily:  by FY 2020, 38.6% of all money laundering defendants received a variance (98.6% of such variances were downward variances). Of the remaining money laundering defendants, over 34% received downward departures for cooperation with the government, and another 4.8% received some other downward departure from the advisory Guideline range.  According to the Commission, the average sentence reduction for defendants receiving a variance was substantial: 48.9%.  Ultimately, only 21.1% of money laundering defendants received a sentence within the advisory Guideline range.

These more recent statistics can be compared to FY 2013, when approximately one-fourth of all money laundering defendants received a non-government sponsored sentence below the advisory Guideline range, and the average sentence reduction for defendants receiving a variance from FYs 2013 to 2017 was 43.1%.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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