We represent lots of people convicted of federal white collar crimes, and in many of these cases, our clients have defrauded or caused losses to individual or institutional victims. We always try to have our client pay back to any victim as early as possible, if the client was truly responsible for the victim’s loss. Repayment is not only the right thing, it also helps us in trying to get the best possible sentence. However, we often run into the situation where the client needs to avoid prison in order to keep working to pay off the defrauded victims. The United States Court of Appeals for the Eleventh Circuit, right here in Atlanta, recently issued an opinion that reversed a criminal sentence imposed on a woman who was unable to make full restitution. The case is United States v. Pate, and can be found here.
Ms. Pate is a native of Polynesia, and she married a man from the mainland when she was very young. By all accounts, she was totally dependent on her husband when the couple moved to South Florida. Ms. Pate also worked in a bank and had befriended an elderly couple who were customers of the bank. When her husband died leaving her completely alone, doctors and friends all noted that she went into a tailspin. She ended up embezzling about $176,000 from the elderly couple. When confronted, she confessed, and pled guilty to embezzlement by the employee of a federally insured bank.
Readers of this blog know about the Federal Sentencing Guidelines, and for Ms. Pate those rules suggested a sentence between 27-33 months. Ms. Pate sold her remaining asset (her home) and brought a cashier’s check for $45,000 to the sentencing hearing. By the time of the sentencing hearing the elderly victims had died, but their children asked that no jail sentence be imposed because Ms. Pate had been such a good friend and helper to their parents during their final years (other than stealing their money, of course). Her lawyer also presented medical and psychological records demonstrating that her crime was totally connected to her feeling at a loss after the death of her husband. The lawyer asked that the sentencing judge impose a straight probation sentence.
The federal judge said he would only impose probation if Ms. Pate paid full restitution, in other words, if she somehow came up with more than the $45,000 she had brought to the sentencing hearing. Because she did not have full restitution, he imposed a 27-month sentence. The judge reiterated that he would reduce the sentence to complete probation if Ms. Pate or her supporters came up with the remainder of restitution.
The Eleventh Circuit took a very dim view if this Judge’s sentence. First, they immediately released Ms. Pate from custody right after the oral arguments. Next, they issued a strongly worded opinion, noting that several Constitutional principles prohibit the practice of imprisoning a person simply because that person has the inability to pay a certain amount of money. More specifically, the appellate court noted that it is substantively unreasonable under the Sentencing Guidelines for a federal judge to “give significant weight to an improper or irrelevant factor” during the sentencing process. While payment of restitution is relevant, it cannot be the sole factor distinguishing between a jail and non-jail sentence. “To say that the district court must consider the need to provide victims with restitution, however, is not the same thing as saying the court may sentence the defendant to prison solely because she was unable to pay the restitution in full. If anything, imposing such a sentence arguably cuts against that factor.”
This is an important case for many reasons. The case highlights the need to try and repay victims, while also not using a particular Defendant’s relative lack of funds against him or her. It is fundamentally unfair to let a wealthier Defendant buy his or her way out of prison, while an equally deserving person goes to prison because he or she cannot immediately pay off the victims. It is likewise important that the Court of Appeals agreed that imposing jail time can sometimes “cut against” a sentence if that means the victims won’t get repaid. Finally, the case also teaches that good lawyers keep pushing, and the fact that the Court of Appeals let Ms. Pate out of prison is a good sign for her when the matter returns to the federal District Court, where it has been reassigned to a different Judge.