I was driving my daughter to her grandmother’s house today, and I heard a panel on WAMU’s Kojo Nnamdi Show waxing righteous about the rather meager charges against D.C. councilmember Kwame Brown. Now, I am not focused on Kwame Brown. He may indeed be a corrupt politician. He may be Jimmy Stewart in “Mr. Brown Goes To Washington” for all I know.
This isn’t about him.
The only federal charge that the U.S. Attorney’s Office in Washington could bring against Mr. Brown was for bank fraud. He falsified statements to a federally-insured bank while seeking a loan, claiming more income than he had received. A misdemeanor charge for violating campaign financing rules was also filed in local court, and Mr. Brown will apparently plead guilty. But the larger charge has nothing to do with his public function or with public business.
Now lying to a bank on a loan application or providing false information in a loan application is wrong of course. It is also wrong to give your child any money as a loan and then let the child claim those assets as his or her own income or saving to an FSLIC- or FDIC-backed institution in support of a loan application. Or to accept a loan from a parent and do so yourselves. The possible penalty for such an affront: Thirty years.
Federal prosecutors in Baltimore used to call this statute — and its overwhelming and intimidating penalty — the Head Shot. If the rest of your case was insubstantial, if you couldn’t make the case you wanted to make, but you were on the spot for investigating a high profile target, then check the loan documents on that sucker’s house first. See if he made a false claim. Even if he was paying off the bank loan, or had paid the loan, even if there was no actual monetary loss, check the loan documents. It’s amazing how many Americans put more than their best foot forward when they are trying to convince a bank to back their mortgage.
The federal prosecutor in Baltimore, a fellow named DiBiagio, really didn’t like the former police commissioner of Baltimore city. The commissioner, a fellow named Norris, had publicly criticized DiBiagio for his priorities, calling a press conference, telling television cameras that the federal prosecutor wasn’t bringing enough gun cases, wasn’t doing the necessary things to reduce crime in Baltimore. Norris made an enemy.
Later, after Norris quit to become state police superintendent, there was an audit of a discretionary fund assigned to the police commissioner’s office. City auditors found that Norris had seemingly spent a modest amount of the fund on items not connected to official business. In the end, after going item by item, Norris agreed to pay the city back somewhere in the neighborhood of $2000 — a figure that was totaled over several years as commissioner. End of story?
Nope. Mr. DiBiagio stepped in, announced a federal investigation of Mr. Norris over the matter of this $2000.
Many months and many headlines later, Mr. DiBiagio was worried. After all, Mr. Norris had repaid the disputed money as requested by the city. Moreover, lawyers for the former commissioner were arguing that there were no actual guidelines on what the discretionary fund could and couldn’t be used for. None whatsoever. Previous commissioners had used the account for myriad items. Defense attorneys were prepared to argue in court that Norris assumed the use of the fund was a perk of his post. They wanted a trial, and federal prosecutors did not want a trial; the case was a loser, an embarrassing, high-profile overreach into a very small matter and a very small amount of money.
What to do? Check the loan documents on the house where Mr. Norris lives! And lo and behold, he had borrowed money from his father and then claimed those assets as of his own origin in order to get his home loan. There had been no default on the bank loan. In terms of monetary loss, there was no victim. But Mr. Norris was exposed, for as much as thirty years: “You go to trial,” a federal prosecutor told him, “you won’t see your kids grow up.”
Like Mr. Brown, Mr. Norris took a plea. He would not have a day in court to argue the original substance of the federal investigation, much to the relief of federal authorities in Baltimore. And the Head Shot is always in the arsenal for the government. It was there for Henry Cisneros. It’s been there in Wall Street investigations in which U.S. Attorneys have failed to prove substantial charges against financiers, and have instead, as leverage sent their sons to jail for bank fraud. In “The Wire,” we had a detective use the threat of a Head Shot to elicit information from a politician. An Assistant U.S. Attorney met me at a party a couple years later:
“Pretty funny how you used the Head Shot on Clay Davis.”
The point is not Mr. Brown. Or Mr. Norris. Or Clay Davis. And no — Mr. Brown will not get thirty years. The sentencing guidelines will not lead him into such draconian territory, although since those guidelines give and take away prison-time based on cooperation with federal prosecutors and a willingness to promptly admit guilt, the game is even further rigged, isn’t it?
The point is not which politician we want to see get got. The point is process.
Right now, millions of Americans could be in federal prison for the usual petty deceits and gamesmanship on their bank loan applications. Not just supposedly corrupt politicians. Not just fraud artists who had no intention of paying back the mortgage loans. But ordinary people who went too far in trying to establish sufficient credit for themselves or for family members to buy a home.
After I called in to comment, another WAMU listener e-mailed a response. Incredibly, he argued that when you have a corrupt politician, you use anything you have to try to get him, that a criminal investigation is a matter of strategy, that you employ whatever charge and whatever tactic you can find. Good to know. Given that we’re absolutely sure who the bad guys are — even before we gather actual evidence — it’s just grand that U.S. Attorneys, in addition to all their other formidable powers and authority, have the Head Shot.
* * *
NOTE: In rereading this early this a.m., I noted that while writing quickly, I mistakenly credited money given and then misrepresented to bank officials as gifted money. In fact, it is loaned money that gets parents and others into trouble. Indeed, in the case of Ed Norris and others — the paying back of the loaned cash is one of the overt acts that gets them into trouble. In any event, the net effect is the same: By misrepresenting something as personal assets that is not in fact an asset, many Americans make themselves guilty of bank fraud, a statute that exposes a defendant to a potential 30-year term. Just as Mr. Brown, by misrepresenting his income, created a false asset that made bank officials more favorable to his loan. I’ve now corrected such. The dynamic that I am critiquing, and the critique itself, however, remains unchanged.
As we used to say on such occasions in newspapering, more or less, “The blogger regrets the error.”
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Oh this article was very helpful. I just read your tweet in response to the NY AG referring the results of her investigation into Trump, his children, and corporation to the IRS Criminal Division ….
Only “head shot” I knew about before this (since I haven’t watched the wire yet!) Is what I’ve been uploading to backstage recently, in case You wanna check ‘em out 🙂
[…] David Simon tuned in to WAMU, where he heard host Kojo Nnamdi and his sidekick Tom Sherwood “waxing righteous about the rather meager charges” against Brown. Unable to take it any longer, Simon called […]
[…] where he saw firsthand how federal prosecutors misuse the “head shot.” In a 2012 blog post, Simon wrote: “If the rest of your case was insubstantial, if you couldn’t make the case you wanted to make, […]
[…] investigation: why prosecutors ended up ditching much of their campaign work and went with the less serious bank fraud […]
How on earth could such a thing ever come to be. People have stolen millions & gotten off on probation. Just who the hell decided 30 years seemed appropriate for a mere fib on a loan application. What is the name of that law, how do I find the details of its origin? Murderers have gotten less.
I assume this law is not used very much & probably only when targeting high profile people. But I have to agree with David Simon, it is the principle of it. No one, not prosecutors or the bank should have that kind of power. Its the kind of thing you’d expect from a fascist society. They may not use it on regular citizens but whats to stop them. I have heard some extremely horrific tales about the kinds of things overzealous prosecuting attorneys will do to keep their precious court case records untarnished. Things like forcing you to testify against a mafia don after you just happened to witness a murder:
‘What’ll it be? 30 years or are you gunna testify?’
Plus I’m not even sure I completely agree you are doing anything wrong. At least not the scenario of your dad or mom gives you a pile of money so you can get a loan. I suppose if your dad gives you the money to add a couple zeros to your account then takes it back right after you get the loan its a little dishonest but you still have to pay back the loan from the bank. Plus if you did pay back the loan the bank has no reason to even complain. I also cant imagine that this little trick was such a problem or cost the banks so much money that they had to establish this law. Or even if that was the case it still leaves you pondering how on earth they came up with 30 years. Banks robbers dont get 30 years.
certainly like your website but you need to take a look at the spelling on quite
a few of your posts. Several of them are rife with spelling
problems and I find it very troublesome to tell the truth nevertheless I’ll surely come back again.
Thanks for your comment. Just ran spell check on loads of stuff, including Kwame story, and I”m not finding anything, but I will give that a personal read and find them. You’re right, I’m sure…as I’m the only member of the copy desk around here, I don’t always catch them before David posts them. Some of this material has been very much edited, other items are just his thoughts at the moment. Feel free to PM me with any particular examples. We will try to do better.
Although not impressed on hearing Kwame Brown, during the election, defend some of his personal financial dealings, in the end he was elected suggesting the voters accepted this part of his overall package. The charges brought were really just more of the same type of things that came out during the election cycle. I don’t know nor defend Kwame Brown as a specific politician, but I don’t particularly like the means of defeating the popular vote to prosecute politicians for personal failings that do not equate to professional wrongdoing.
We should note that the most well heeled of politicians have access to resources which make having high credit card debt, difficulty securing loans, trouble meeting mortgage qualifications, etc. not necessary. For those people in the middle class, whether just trying to make it, managing well, or even-gasp- those trying for more glitz than their earnings can support, one or more of these is likely a reality. I don’t assume that any certain quadrant of society holds a greater leaning towards personal failings and the often financial consequences, only that by reason, these would be more apparent where the money buffer is less cushy.
As a person who would like our government to be much more representative of the whole than the few, I do know there are strong standard bearers for the highest ideals of integrity to be found in all areas of society and they should certainly encourage their representatives to high standards of civic responsibility and personal honesty. We can hope for a government of ‘angels’ but in the end must accept one of humans.
David, I think you are directly on point with the explanation “…the legal sanctions against political corruption in our country face insurmountable odds and that under the existing federal code, it is too hard to make a case for influence peddling…”
but this solution seems hopelessly naive “…the remedy is for us to revisit legislatively the terrain of political vote-buying and campaign financing and undertake necessary changes in the criminal code.”
Isn’t this basically asking the corrupt and powerful to acquiesce in making their own corruption easier to prosecute?
On another note, while I understand your argument that the “head shot” is easily misused to settle personal grudges or save face politically, isn’t this just an observation that you find corrupt federal prosecutors more distasteful than corrupt politicians? Or put another way, if we grant that abuse of office is incredibly difficult to prosecute, wouldn’t the availability of this tactic as a means to bring down corrupt office holders trump its potential for misuse in the hands of overzealous prosecutors?
I guess I’m asking that if in your view the experience of Mr. Norris totally invalidates this tool as a means of bringing down corrupt politicians. And if so, why?
The irony of the Head Shot is that the crime only becomes apparent when the defendant begins to repay the loan to his/her parents. If the defendant takes the parents’ money and never repays it, then the parent might have gift tax liability, but the child is in the clear. But, if the child repays the loan within the statute of limitations (10 years), the child has created overwhelming evidence that the loan application was fraudulent in claiming the funds as an asset and failing to disclose the liability to the parents.
Funny too that had they “defaulted” on the family loan, they would be safe from the dangers of the loan they are current on
So, I understand this isn’t the worst public corruption guilty plea east of Chicago. But so what?
Is a politician only truly “guilty” if his victim is his constituency in particular? Brown admitted that he broke the law and that’s enough for me.
Perhaps what he did shouldn’t be punishable by 30 years in jail. But it shouldn’t be 100% legal, either!
One answer to this, thinking practically, is that many, many of us are guilty of something and if they want us, they can have us. So who do want? And for what? Recently, the government spent an ungodly amount of money trying to prove that a certain Mr. Edwards, in his effort to hide a girlfriend and an out-of-wedlock birth, violated some campaign finance laws. The government case was problematic at best. They went forward. They spent a lot of money, time and resources doing so. A mistrial in a case that no sensate American, looking at our actual problems, can care about.
Monica Lewinsky? Impeachment? Henry Cisneros? Ted Stevens? Ed Norris? Irrelevance, anyone?
Has anyone noticed that the Department of Justice hasn’t obtained a single conviction of anyone responsible for selling shit as gold in the mortgage-backed securities scandal, or for selling liar loans wholesale to underwrite that scandal?
If the U.S. Attorney in D.C. had nailed Kawme Brown for political corruption then the money was well spent, and his job was well done. This? This is a disappointment. If you hate Kwame Brown and resent how he governed, then perhaps you find yourself satisfied. But if you are trying to assess the priorities and effectiveness of the nation’s top prosecutors, you can’t look upon this investigation as having ripped the lid off of D.C. municipal corruption. So far, they haven’t addressed that subject to any real degree. Here’s hoping they do better.
Rock on, David Simon. What a breath of fresh air you are. Who knew your pun on hope, “the audacity of despair” could produce such a sun shiny day of fresh breathable air. Alas, despair can make you do that…think, that is, because you’re just sick of ‘it.’ Just love to sit and listen to common sense, street smarts, and non-debatable truth. I’ll have a dirty martini with that. Cheers.
Here’s a story about an “average guy,” Charlie Engle, going to jail for lying on what was commonly known as a “lairs loan.” Apparently rather than go after the folks that brought the economy to its knees in an unadulterated pursuit profit, the justice department feels like justice is best served by going after borrower with the head-shot.
I remember reading this article and the recent followup in the NYT, both by Joe Nocera. Exactly on point. Thanks.
I would like to know why Kwame Brown is a corrupt politician. I haven’t seen one piece of evidence that shows that Kwame has stolen any public funds. It seems that the media isn’t reporting the complete story which I find disappointing. I agree with David Simon and find it hilarious that Loose Lips doesn’t like the fact that David Simon wrote an unbiased blog.
I just want to know when in he going to go after the white councilmembers that have been stealing for years and still are?
Personally, I’m kind of intent of seeing this thing as a prosecutorial dynamic and a discussion about the use of a particular statute.
I’m not trying to suggest a racial dynamic, though that seems to color the comments of many others.
You said it, Mr. Simon. You explained that joke of a charge very well on Kojo’s show. Bravo to you for explaining it further because seeing the charge seemed quite unbelievable and weak in comparison to what what originally being investigated. This is all they got is what most of us thought. There are a lot of Kwame Brown’s on that city council who have committed ‘bank fraud’ in a myriad of other ways that the DC US Attorney’s office does not bother to investigate. Do I have cataracts or is there a systemic continuity of investigating certain people of a certain hue persuasion who are members of the D.C. city council? So other members like Graham, Cheh, Evans, Wells, Catania, Mendelsohn are spotless and have never EVER committed personal or public office related malfeasance? Surely they jest. Let the investigations extend beyond those of a certain hue if public honesty and trust is what is sought. Clearing out the hue seems to be the aim.
I’m not in a position to characterize the motives of those investigating Mr. Brown, or to defend or critique Mr. Brown. As I said, he may be entirely corrupt, or modestly corrupt, or oversold as a source of political corruption. And it’s certainly well within the prerogative of a U.S. Attorney to explore the possibility of political corruption.
You just hope that when a case is brought it is brought through the front door, with charges relating to the political corruption leading the way.
If the back door is acceptable, then what we are, in effect, saying is that either a) the investigators failed to make the case they wanted to make or b) the legal sanctions against political corruption in our country face insurmountable odds and that under the existing federal code, it is too hard to make a case for influence peddling. Or both. In the first instance, there is no remedy save for better investigation. In the second, the remedy is for us to revisit legislatively the terrain of political vote-buying and campaign financing and undertake necessary changes in the criminal code.
In this case, given his public performance, there seem to be few people willing to credit c) that the target may be innocent of corruption. Personally, I know I am in no position to credit or discredit Mr. Brown, as I said. But the systemic dynamic is worth some reflection. If it is okay to use the Head Shot here, then it is okay what they did to Ed Norris. And what they have done in certain Wall Street investigations. And how U.S. Attorneys around the country routinely use the Head Shot when other investigative avenues fail.
And that can get very ugly, and very dishonest, very fast.
I think the underlying issue is one of contentment in our society to succeed at the ends no matter the means. It’s a very basic problem of ignoring that which is right/wrong and using that which gets us what we want to succeed. A very prevalent theme in Mr. Simon’s arguments (both here and in other posts) is that there are actions being taken by all of us (citizens, pols, police, prosecutors, etc) that are simply wrong and very easily identified as wrong, yet these actions are accepted merely because in the end we get the loan, or we get the bad guy or there isn’t a dope fiend on the corner. None of that creates just relationships between the involved parties. It creates an illusion that we’re coming together for an honest contract, prosecuting real wrongs, arresting for actual criminal actions. The end result of ignoring that “the process is suspect” is a society based on arbitrary rules. And not just arbitrary behavior in the courtroom, but in the bank, in the grocery store, at school, in the living room. Everywhere.
The city is being looted by corruption and a culture of pay-for-play politics that was also skewered sometimes in a show about Baltimore called The Wire. It deservedly was chosen as the greatest TV drama of all time by New York Magazine.
If illegality took place by Kwame Brown, what’s wrong going after it? Was it wrong to use tax evasion against Al Capone?
In the long run, the main weapon to start fighting back — a first step — agains the corporate control and easy-money corruption of of what I call “Sleaze City” is Initiative 70 to ban direct corporate contributions to candidates, so they’re not bought and paid for by companies and developers. There are volunteer opportunities now seeking to put the ballot measure on the ballot, with signatures needing gathering by mid-July, and you can read more about it at a thoughtful political blog , Greater Greater Washington:
Help clean up DC politics this weekend and this month
By Elissa Silverman
DC residents can continue to shake our heads in embarrassment and wait for the US Attorney to expose the corrosive influence of money in local DC politics, reinforcing the image of a federal territory unable to govern itself. Or, we can send a message to DC leaders that if they are not willing to lead on these important matters of ethics and integrity, the people will.
oin me and other many other DC residents by helping to put Initiative 70 on the ballot this November. We are collecting signatures at the Petworth and Dupont farmers’ markets and Glover Park Day this weekend, and are looking for folks during Capital Pride next weekend. Please sign up to help at one of these or find out about other times and locations near you.
Initiative 70 bans corporate cash from local campaigns, as well as other ways to buy influence and access such as inaugural committees, constituent service funds and legal defense funds. It would become law if District voters approve it in November.
But it can’t make the ballot simply because seems like a good thing to do. We need the valid signatures and addresses of 5% of DC registered voters on petition sheets we give to the DC Board of Elections and Ethics by early July, including 5% percent of the voters in 5 of the 8 wards.
And we can’t just put some on-line petition on Facebook or Twitter to do it. We need to do it the old-fashioned way by collecting signatures in person, with the circulator of the petition witnessing the signature of each voter that signs our sheets.
We need Initiative 70 for the good of our city, but Initiative 70 also needs you. We need DC residents who believe in fairness and an ethical government to commit a little time to helping us gather the necessary signatures. In every ward, DC Public Trust, the organization we formed to pass Initiative 70, has weekly events at supermarkets and farmers’ markets.
Sign up to help here:
You are right on point. Prosecutors are the most powerful officials in the criminal justice system, they have boundless discretion, and they wield it arbitrarily and without accountability. I wrote a book called Arbitrary Justice: The Power of the American Prosecutor a few years ago. The title speaks for itself. My response to the Brown case was the same as yours.
When the sentencing guidelines took singular authority for punishment from the guys wearing the black robes, the federal system began its great ethical slide. Now, given the rates of conviction in federal court, when a prosecutor decides how much to charge you with — whether to add counts or subtract them, or in a drug case, how much of the CDS to tar you with the indictment — he is, in effect, the sentencing judge.
That Congress interposed in our judicial system this way has led to the highest rates of incarceration on the planet. I’ll check out the book. Thanks.
I largely agree with what you’re saying about the employment of the headshot tactic as an indication that prosecutors developed a weak case. Clearly they did not find what they were hoping to.
But I do think there’s another point worth mentioning regarding how our legal system deals with political corruption. Basically, under current laws, much of what would reasonably be called corruption is perfectly legal, or, at the very least, resides in a grey zone that no sane prosecutor would go near. The only kind of corruption that would actually get you in trouble is the kind that only fools would partake in, executed in really stupid ways: i.e. Fmr. Congressman Duke Cunningham actually writing out a bribe menu on a napkin which he kept at his residence and getting a defense contractor to purchase his home way above market value, in an easy to trace manner, in exchange for specific favors.
The problem is that the law sees relationships between politicians and those seeking favors in a very one dimensional way, suggesting that a debtor relationship between the two parties can only occur in a linear quid pro quo fashion, like handing over an envelope of cash to secure a specific favor. In reality, these relationships are far more subtle and long term, but they are equally corrupting, if not more so.
Lobbyists and corporate interests have become quite skilled at creating debtor relationships with the politicians and regulators they want and need to manipulate to further their goals: stuff ranging from being able to offer up fundraising networks that can save a politician by underwriting their campaign to suggestions of lucrative post-public-office career opportunities in a cozy lobbying office or trade group to helping their children get into the right school or helping them and their loved ones gain access to exclusive high-end healthcare services. The most powerful lobbyist is the one who can open lots of doors, often providing these favors without any specific strings attached, at least initially. After a while, these interactions might even start to seem like a genuine (non-transactional) friendship. But make no mistake, eventually all debts come due.
I don’t know how you fix this from a legal standpoint, what kinds of laws and reforms you would need to pass to clean things up (that the people profiting from the current system would be the ones required to fix it might make this kind of reform effort pointless, anyway). But the fact remains that the results that this kind of influencing produces are no different than the quid pro quo bribes that most people imagine when the topic of political corruption comes up. It’s just a lot harder for a prosecutor or a reporter to trace it all out, and even if they can, it’s probably legal.
Anyway, when it comes to the headshot, or similar prosecutions based on a technicality, I will admit I am conflicted. On one hand, part of me is happy to see any of these guys get what’s coming to them. But if I step back and think about this beyond a personal desire to see bad things happen to bad people, even nabbing a truly corrupt politician on a headshot does nothing to fix the systemic problems that put him in office and enabled his behavior. Getting rid of that guy just frees up space for another more or less identical individual to take his place, only with the added illusion that we’ve “cleaned up” the corruption. High fives all around.
It’s all a bit depressing.
You are exactly right about the complications making a political corruption case at the federal level. A very good, very conscientious federal prosecutor — the late Gary Jordan of the U.S. Attorney’s Office in Maryland — pointedly told me: Influence-peddling is not a crime by federal statute. Extortion is a crime. Bribery is a crime. And given that these are often crimes in which the involved parties wish to remain hidden, considerable investigation is required.
The real solution, of course, is to establish more credible legal sanctions for politicians who have their hand out. To do that, we would need legislators and executives — politicians to a man — to pass reform legislation that would really limit the reach of money in government, beginning with campaign finance reform.
The problematic solution is to empower prosecutors to bring extraordinary discretion to bear on whoever they think deserves to be selectively pursued using all possible threat. Then you are vulnerable to the venalities and motives of individual prosecutors. And you eventually bring to bear an oppressive dynamic against people who are not Kwame Brown.
You may be pleased with the outcome here. But the process is suspect. And so is the Head Shot statute and its constant misuse by federal prosecutors.
Cant take this ride with you, Mr Simon. We need heroes, not clowns and hustlers, as we head for November. Ron Machen, US Atty for DC, is a pal of POTUS and Holder’s, and yet trying o lock up black pols? Yes, and I think that’s great. He is a role model for my kid, a young black male child. Maybe I have had the luxury of such bourgie notions. Ok. But as said above, we don’t have the luxury of hustlers as leaders, any more than old machine Toms like baltimore’s Du Burns. Maybe at one time that was th trade off in urban politics. Can’t afford it now. I’m reminded of a line in that old Kubrick WW1 film Paths of Glory where the Machiavellian old general finally came clean with Kurt Douglas after his men were executed, but the jackass who ordered the attack was sacked. I’d flush 100 local black pols for that greater good. I’m glad Machen is too.
If Mr. Machen had brought a case of substantial political corruption against a corrupt politician, he’d be exceedingly heroic.
Again, this isn’t about Kwame Brown. It’s about prosecutorial overreach.
That’s what prosecutors do– they overreach. But when a brother like Machen can get rid the polity of Clay Davis types, I’m totally cool with that, and as a father, DC native, DC taxpayer, Hoya prof, I’m proud to show men like him off to my son. Kwame demanded his shine when he should have been serving the public trust. Now he’s a public embarrassment. I hope you can at least empathetize with that POV, even if don’t agree with it.
Really? I’ve known and reported on dozens of prosecutors — both local and federal. Some did overreach. Many more — including the best ones — did not. And some of the best and most honorable law enforcement I witnessed — close up, actually, when I was reporting one of my books — often involved deliberate, ethical discussions about when NOT to charge a suspect.
I understand that you are happy with this outcome. I am aware that you feel Mr. Brown has, in this case, gotten what he deserved. But I know defendants who were equally subject to this dynamic and who got far more than they deserved. Going forward with such a flawed dynamic, we are as bad as our worst prosecutor who misuses this statute, and, as well, we are as cruel as the best and least deserving citizen on whom the Head Shot is employed.
The other killer in these federal white collar fraud cases is the U.S. Sentencing Guidelines, namely the “amount of loss” offense enhancement.
Even if your client is inclined to fight the charge (and they almost always are), you are duty bound to advise them that depending on how much “loss” their actions are alleged by the government to have caused, the Guidelines could jack their prospective sentence up by an extra 4 to 18 levels (most other enhancements under the Guidelines are 2 levels, although they add up quickly as well).
Thus, what might have been an otherwise lenient sentence — lenient always being a relative term in federal court v. the state — will more typically end up being so punitive after all the applicable Guideline enhancements are factored in, the client doesn’t have much of a choice but to take whatever deal they’re offering. (But then they often reject the plea anyway because the U.S. Attorney will always want them to do *some* time since the client has made the government go to all the trouble of bringing a case).
this site illustrates clearly how easily the months can add up under the Guidelines when the enhancements get piled on:
I don’t know, this one is kind of tough… usually where there is smoke there is fire. I’m no fan of overzealous DA’s or States Atty’s trying to make a name for themselves by taking down a big fish (Mike Nifong ring a bell?). But, Mr. Brown and his wife have had a sketchy financial past. Not sure you want a public servant, especially in the wake of Harry Thomas’ “kids baseball fund” directing taxpayers money.
Your point however is very accurate. Mr. Brown at the end of the day is guilty of what really? What harm has he caused the residents of DC? It’s all a show. One big, empty, fraudulent show of the elites flexing their muscles to show how powerful they are. They could care less that they have just destroyed a man’s career. You have to be a sick indivdual to get off on that.
sidenote- I find it hilarious (in a disheartining way) that not one person or politician has been charged by the DOJ in the entire subprime mortgage fiasco. Trillions of dollars of debt caused by irresponsible & corrupt lending that will eventually lead to thousands of destroyed lives (if it already hasn’t). Not one person from Fannie or Freddie even investigated. To quote Poot, “The world goin’ one way, people another yo'”.
“Where there’s smoke, there is fire.”
This is something that the federal investigators could legitimately say when they begin their investigation of a target. But for you to be saying it here on a blog — after those investigators have spent months probing Kwame Brown and come up fireless is kind of problematic, don’t you think? They had their chance to find real political corruption. Save for a misdemeanor charge on a campaign financing violation — nothing they found is related to political corruption.
For you, in absolute retrospect, to be arguing for fire — isn’t that how our justice system isn’t supposed to work? If there’s evidence of political corruption, charge that. If it’s sufficient, you’ll get a verdict. If you don’t have enough and you need to run through the back door of a falsified personal loan application, then — absent an actual monetary loss and actual fraud involving the funds — you have a very modest case indeed.
Agree with you that the Wall Street-inspired kleptocracy that reigned around the subprime mortgage farce has yield so little from DOJ or even the SEC. It’s embarrassing. It breeds an open contempt for free-market capitalism.
Brilliant commentary on this issue. Just on a fiscal waste aspect alone, these cases are egregious. Though not a typical ‘Head Shot’ the prosecution against former Mayor Sheila Dixon also comes to mind in terms of overreach. Forgive me if I’m missing the finer details, but how many hundreds of thousands of dollars were spent to prosecute city-developer corruption only to end up with prosecution’s only viable charges tied to $25 gift cards to Best Buy? Career fucking case, indeed.
I’m a little confused. maybe I’m misreading something in this passage:
It is also wrong to give your child any money as a gift and then let the child claim those assets as his or her own to an FSLIC- or FDIC-backed institution in support of a loan application.
Does this mean parents can’t give their children money to help with the down payment? Or just that they can’t fluff up their bank accounts with cash that would not normally be there? If the latter, there aren’t too many people who wouldn’t be eligible for 30 years when they bought their first house.
I can understand why taking a loan would qualify. but if a parent essentially advanced part of a child’s inheritance to help get that house bought, that’s a federal crime?
And, even if it was a loan, the threat of 30 years is unconscionable. I remember that episode of THE WIRE and thought it was bizarre then. Even though Clay Davis had something coming to him, it wasn’t that.
You can give your kid a gift and they can use that money, sure. But you have to tell the bank it was, in fact, a gift from you — and not money raised by the kid through income or investments or whatever.
And since the purpose in establishing such collateral for the kid is to improve his credit standing, many people do not admit to having given the money as a gift. They lie to the bank essentially, to suggest that the kid’s income and assets are sufficient to justify the loan. After all, if the bank knows you gave your kid his collateral, they might ask you to cosign on the mortgage loan — defeating the chance for your kid to establish the credit of the loan itself, and the credit history of being a homeowner, without a parent as a cosignatory.
To correct myself, as I have on the original post:
It wasn’t that the money is a gift from parents to children, in the example. It is that it is a loan, and it masquerades to bank officials as either a gift or as existing assets of the loan applicant. If you loan your child money for collateral on a mortgage from a federally-insured instituition, and you all your kid to claim that money as a personal asset rather acknowledge the liability of a loan, then you — and he or she — have committed bank fraud, and are exposed for a possible sentence of up to thirty years.
Sorry, for having so sloppily recounted the dynamic. But the critique of federal prosecutors and their use of the bank-fraud statute stands regardless.
Thank you. That makes sense. To claim a loan as a gift is clearly fraud, and there should be some consequences, commensurate with the damage suffered by the lender. 30 years for it is unconscionable.