NCPA - National Center for Policy Analysis

Rich Criminals Face Stiffer Penalties

March 11, 2004

Martha Stewart faces legal penalties that "are out of all proportion to the crimes she committed," says economist and crime analyst John R. Lott. The reason, ironically, is because of attempts to ensure "fairness" in sentencing.

In November 1987, U.S. Sentencing Guidelines took away much of the discretion of federal judges in imposing sentences on convicted criminals.

The aim of the guidelines was to insure that two criminals convicted of the same crime did not receive disparate sentences; however, Lott says the narrow sentencing ranges implemented by the guidelines have had the opposite effect of making penalties less, not more, equal. Lott reasons:

  • In addition to jail time, wealthy white collar criminals like Stewart face "collateral penalties" that include substantial fines, loss of business or professional licenses, and the right to serve on boards of publicly traded companies -- in addition to restitution and awards due to civil actions.
  • By comparison, a drug dealer convicted of giving false information to investigators might receive the same jail time, but has no assets to seize.
  • When judges had more discretion, they could take these other penalties into account -- which in Stewart's case may amount to $300 million, estimates Lott -- and give them somewhat shorter sentences.

"Just as with taxes, the wealthy pay much more for committing crime," says Lott. This "may also explain why white-collar crimes, while frequently talked about, are actually quite rare."

Source: John R. Lott Jr. (American Enterprise Institute), "'Sentencing Fairness' Rules Backfired in Martha's Case," Investor's Business Daily, March 11, 2004


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