Defendant:"I've Suffered Enough, Judge," Judge: "No You Haven't"

Jay Weaver at the Miami Herald covers the sentencing of Dr. Alan Mendelsohn (pic) the Florida opthalmologist and political lobbyist.  The federal prosecution of Dr. Mendelsohn (once again) peels back the cover on Florida's amazingly corrupt political culture.  Mendelsohn's last political fundraiser (while he was under incitment) was for Florida's new Tea Party US Senator, Marco Rubio.  Nice.

Mendelsohn is a dramatic example of how not to approach your white collar sentencing.  This is an excerpt from the Herald account, by Mr. Weaver:

U.S. District Judge William Zloch slammed a respected Broward County physician with a four-year prison sentence on Wednesday, sending a strong message against the corrupting influence of special-interest lobbyists who raise millions for politicians in Tallahassee -- in exchange for favors.

Zloch told Dr. Alan Mendelsohn, 53, a politically connected ophthalmologist, that the hefty sentence was warranted because his pay-to-play misconduct was like a “cancer” with “tentacles” that thwarted good government from South Florida to the state capital.

Mendelsohn was the key figure in a public corruption and tax case that saw him secretly divert $700,000 from campaign donations and other income to himself, his family and his mistress. He did not report that money to the IRS.

Some of the donations were made after Mendelsohn, an unregistered lobbyist, bragged to special interests in major industries about his purported connections to then-Gov. Charlie Crist, lawyers on the attorney general’s staff and state legislators. Mendelsohn served on Crist’s transition team in 2007.

“Most notably, the corruption in this case strikes at the heart of the Florida Legislature,’’ Zloch said. “Dr. Mendelsohn actually facilitated a corrupt democratic process in the Florida Legislature.”

[ . . . ]
At the plea hearing, he told Zloch that if influential insiders didn’t pay political bribes in Tallahassee, they would be “toast.”

On Wednesday, Zloch said the Justice Department’s recommended prison sentence for Mendelsohn, between 2 and 2½ years, and his defense attorney’s bid for probation with no jail time, failed to address the seriousness of his criminal behavior.

The judge, sitting ramrod straight on the bench, condemned Mendelsohn for orchestrating schemes in which political donors contributed hundreds of thousands of dollars to obtain legislative favors behind the scenes.

“A message must be sent to the public that corruption of this scope cannot and will not be tolerated,” Zloch told a packed Fort Lauderdale courtroom, which included some supporters who gasped, “Oh my God” when the judge issued the hefty sentence, along with a $10,000 fine.

[ . . . ]

Mendelsohn pleaded guilty last year to conspiring to defraud the U.S. government by failing to report to the IRS $700,000 in income siphoned from his PACs, his lobbying clients and his medical practice. Mendelsohn, who raised money mainly from Republican donors, pleaded to a single conspiracy charge, which carried a five-year maximum sentence.

Mendelsohn spent the political proceeds on a mistress, as well as his children’s private high school tuition, SAT tutoring, a luxury car and home renovations, according to court records. He also admitted lying to FBI agents.

Before the sentencing, Mendelsohn asserted he had suffered enough from his misconduct. Entin filed 350 letters from supporters seeking leniency for his client.
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The arrogance of this defendant did not play well at his federal sentencing.  It may not seem much when you read about the length of sentences that run to multiple decades or life, but the difference between a 2 years and 4 years is like an eternity for a guy like Mendelsohn.  This was clearly a pissed off judge.

Sir, You Are a Really Bad Man, Go to Jail for 1 Day and Don't Do It Again!

The Columbus Dispatch is reporting on the 1 day jail sentence meted out by U.S. District Court, Senior Judge Peter C. Economus.  Economus ordered Ryan K. Blankenship to serve 1 day followed by 5 years of probation for defrauding lenders who provided loans for central Ohio properties in 2006 and 2007.  This unusual sentence was recommended by the AUSA and reflected Blankenship's cooperation in the investigation of the fraud he helped perpetrate.  Nice deal. 

An excerpt from Kathy Lynn Gray's story for the Dispatch follows:

"Cheating on loan applications and lining his pockets with kickbacks sent a former Gahanna mortgage broker to federal prison today, but just for a day.  During a hearing in U.S. District Court, Senior Judge Peter C. Economus ordered Ryan K. Blankenship, 43, to spend a single day behind bars for defrauding lenders who were providing loans for central Ohio properties in 2006 and 2007. [Judge] Economus also ordered [Mr. Blankenship] to pay $617,869 in restitution and be on probation for five years.

Blankenship pleaded guilty in June to bank fraud and money laundering.

Economus issued his sentence at the recommendation of Assistant U.S. Attorney Brenda S. Shoemaker, who said Blankenship had not organized the loan scheme and provided significant information about others involved.  [ . . . ]

Investigators from the IRS, U.S. Housing and Urban Development Department, and Columbus police had combed through records at Blankenship's Household Mortgage Solutions in Gahanna after uncovering the scheme. [ . . . ]

Court records show that the fraudulent loans totaled $1.5 million for the properties and a loss of $617,869 to the lenders. Blankenship collected $87,881 in payments and kickbacks, the records show.
Blankenship has left the mortgage business and now owns a fitness center, court records show."
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I knew a number of guys at FCI, Morgantown who would have benefited from this sort of sentencing.  It's practical, wise, and consistent with what I've come to believe sentencing in certain white collar financial crimes should be about.

White Collar Criminal Plea Deals

Reporter David Hammer at the Times-Picayune has this look at the plea deal by a former New Orleans technology official who had been recruited from the public sector.  You might ask: why does some one plead guilty when they might initially be convinced that they have valid defenses to white collar criminal charges?  Well, for one thing, being guilty is a significant motivator; but, there are other considerations as this story clearly reminds us:

"Former New Orleans city technology chief Greg Meffert, who barged into City Hall from the private sector eight years ago and quickly established himself as the brash face of reform in Mayor Ray Nagin's nascent administration, could muster only a whisper in federal court Monday as he pleaded guilty to taking kickbacks from a former city vendor.
Meffert pleaded guilty to one count of conspiracy to commit wire fraud and bribery and one count of filing a false income tax return. Asked what had precipitated the change of heart from Meffert after he had dug in his heels for a trial set to start in January, Meffert's lawyer Randy Smith said: 'It is what it is. Sometimes a man just has to step up. He does have two kids to consider that he and his wife are trying to raise in San Antonio. He is a humbled man.' [emphasis supplied]

As part of his plea, Meffert signed a statement admitting he steered roughly $4 million in no-bid city work to city contractor Mark St. Pierre -- who had once worked for Meffert in the private sector -- and accepted more than $860,000 in bribes and kickbacks in return.Meffert also "agreed to fully cooperate and provide truthful testimony when called upon," U.S. Attorney Jim Letten said.

Meffert's wife, Linda, who was also charged in the conspiracy, has agreed to complete a pretrial diversion program. She will remain free on bail, allowing her to continue raising the couple's two teenagers; the charges against her will be dropped, provided she joins her husband in giving information to prosecutors, Letten said. [emphasis supplied]

It starts with a yacht

Meffert's business dealings first came under scrutiny in 2006, when The Times-Picayune reported that Meffert often used, and claimed to own, a 57-foot yacht, the Silicon Bayou, that public records showed was actually the property of St. Pierre and other technology employees. The city's inspector general issued a scathing report on the city's purchase and oversight of a system of crime cameras, many of which were provided by a St. Pierre-owned firm.   That report helped spark the federal investigation, Letten said, praising the city office for its help. About six months after the inspector general's investigation was made public, a grand jury charged Meffert, his wife and St. Pierre with conspiracy, bribery and public corruption in a sweeping 63-count federal indictment.

'It is a new day in New Orleans,' said inspector general Ed Quatrevaux, who joined Letten on Monday at a news conference announcing the plea deal.  Meffert, dressed in a dark suit, entered his plea before U.S. District Judge Eldon Fallon. When asked by Fallon if he was pleading guilty because he was in fact guilty, Meffert said in a barely audible voice:  'Yes, sir.'

Mark St. Pierre's lawyer, Eddie Castaing, said, 'It's apparent that Greg Meffert decided to enter this plea to protect his wife from facing a criminal trial, and he did the honorable thing in admitting to these charges so she could be set free to take care of their children.'"
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It's probably too easy to not have a whit of sympathy for Greg Meffert, after all, he's just another hustler. Then again, there is an arbitrary and capricious quality in White Collar prosecutions.  We laud, honor, esteem successful scoundrels who are able to turn networking, and contacts into business.  We claim to want to attract successful business and entrepreneurial types into public service.  Then we act astonished when these men and women continue their entrepreneurial practices and lifestyles while "in office." 

I am not saying that happened in the Meffert prosecution.  I know less than nothing about the underlying story. What I am saying is that it seem to me that the rules have changed.  As a young man I sat in endless seminars encouraging me to "network," don't buy into "limitations," and so forth.  When I became a lawyer, we were in a previous recession. An Associate Justice of the OurState Supreme Court speaking at our swearing in, exhorted we newly-minted young lawyers to go out there and just do it.  He told us to be fearless, to invent our way as we went along, be "game changers." Um, didn't work for me. 

So the music stopped and some got a seat, some didn't.  Some paid, some paid all.

Obviously, what I related to was the familial peril Meffert found himself in as it related to the prosecution of his wife and the subsequent impact upon his children.  Did Meffert create the peril, seems so.  But, I relate.  No excuses, I relate.  No yacht, but I relate.