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New business booms after
white-collar crimes increase
By Don Oldenburg
THE WASHINGTON POST
Peter Max’s “Statue of
Liberty” print hangs in Herb
Hoelter’s office in Baltimore. It’s
signed by the world-famous pop
artist, inscribed out of gratitude.
And well it should be: Six
years ago Max pleaded guilty in
federal court in Manhattan to tax
evasion and conspiracy charges,
admitting to trading art for more
than $1 million in real estate
without paying income tax on
the proceeds.
Max faced a maximum 10
years in prison and a $500,000
fine. Even the minimum sen
tence then — four months
behind bars — could have shut
down his studio.
“His lawyer called and said,
‘What can you do?’ ” recalls
Hoelter, one of the nation’s fore
most “alternative sentencing con
sultants” whose specialty is the
artful wangling of the federal
guidelines that match crime to
prison time. His job is to influ
ence judges toward lenient sen
tences for his white-collar
clients.
Knowing that U.S. District
Judge Kimba Wood wouldn’t let
Max serve his sentence in a
halfway house solely to keep his
art business booming, Hoelter
proposed that Max also do com
munity service teaching art to
disadvantaged children.
The judge bought it, sentenc
ing Max to pay back taxes plus a
$30,000 fine, to serve two
months in work-release and to
perform 800 hours of communi
ty service in Harlem schools.
Max won’t comment on his
crime and punishment. But
Hoelter says the artist turned the
children’s paintings into a mag
nificent 55-by-10-foot mural
that now decorates a playground
wall in Harlem.
“It was beautiful what he
did,” Hoelter says, calling the
Harlem project a shining exam
ple of how flexibility in sentenc
ing enabled a talented lawbreak
er to repay society rather than
rotting in the slammer.
What troubles Hoelter and
other sentencing specialists is
what would happen if Max were
sentenced today: no Harlem art
project, no creative alternative
to a stretch behind bars.
The federal crackdown on
book-cookers, insider traders,
tax evaders and other white-col
lar crooks — fueled by public
outrage over WorldCom, Enron
and other recent corporate scan
dals — is transforming the tradi
tional white-collar punishment
of prison-lite into hard time.
Many consider this crackdown
long overdue.
During the past year. Congress
dramatically stiffened sentences
for financial crimes, the Bureau
of Prisons ditched halfway house
treatment for white-collar crimi
nals with short
sentences, and
the U.S.
Sentencing
Commission
doubled some
white-col lar
sentences to as
much as 20
years. In April,
President Bush
signed into law a
controversial
bill designed to
restrain federal
judges from
lessening sen
tences.
For sentenc
ing specialists
such as Hoelter,
that’s all bad
u
The government
firmly believes that
white-collar
defendants need to
spend a lot of time
in prison... That
makes our job all the
more necessary.
— Herb Hoelter
Sentencing consultant
cational background is in social
work, not law.
One case led to another. By
the early ’80s, NCIA had started
training public defenders in sen
tencing strategies. But of 15,000
cases NCIA has handled in the
25 years since, many of them
have been of the highest profile,
with names such as Ivan
Boesky, Michael Milken,
Dennis Levine and Marion
Barry.
Though arguably controver
sial, sentence consulting has
evolved into an
expected part of
white-collar
cases, says Marc
Mauer, executive
director of the
Sentencing
Project, a
Washington-
based organiza
tion of sentencing
mitigation spe
cialists.
“The white-
collar client has
the best lawyers
money can buy
and they get the
best sentencing
specialists money
He pages through a two-ini
thick report on one of hiscasfi
a ' 70-year-old charged will
fraud: 20 pages of personal fc
tory, the history of his charitaft
works, the sentencing alterna
tives, and an explanation of wlii
the judge should give the defei
dant a break — family matters
health matters, abuse problem!
— plus letters written on lit
behalf.
“If you’re going to tale
somebody’s life for three, fa
or five years,” says Hoelter
“you have the obligation»
know everything you can
the person, the crime, the cir
cumstances and anything is
was going on — and then tit
a fair decision.
“A lot of people view w6-
collar guys as these nefanors
corporate thieves. There is cer
tainly a lot of stuff that h
out there. But there but
grace of God goes an awful lotof
guys.”
The Situation
news. Pointing
upward, he sighs, “The guide
lines only know one way to go.”
The Beginning
Hoelter is the guy with the
get-out-of-jail cards.
He is co-founder and director
of the National Center on
Institutions and Alternatives,
which works for sentencing and
prison reforms. The 450-
employee nonprofit organiza
tion — headquartered in
Baltimore with offices in New
York, Boston and suburban
Washington — pioneered the
field of sentencing consulting
for all kinds of defendants, from
white-collar criminals to death-
row inmates.
In 1977, after rewiring
Pennsylvania’s juvenile justice
system, Hoelter and his mentor,
juvenile justice guru Jerry
Miller, founded NCIA to lobby
for national sentencing reform.
They soon were hearing from
criminal defense lawyers seek
ing to tip the scales of justice in
their clients’ favor.
“There was no system before
that,” says Hoelter, whose edu-
can buy,” says Mauer.
Today there are more than
300 sentencing specialist firms
nationwide.
Alan Ellis of Sausalito,
Calif., got into the business in
1980 when, as a criminal
defense lawyer, he “saw that
court decisions were going
against criminal defendants and,
for most people, the key ques
tions were how much time am I
going to get and where am I
going to do it.”
Of the 6 percent of federal
criminal cases that go to trial,
the government prevails in 75
percent, says Ellis, whose client
list includes John Walker Lindh
and Lyndon LaRouche.
“There was a need out there,”
says Ellis, that wasn’t being met
by defense lawyers. “Most crim
inal defense lawyers are interest
ed in cross-examining the snitch
and delivering the closing argu
ment that would bring tears to
the jury’s eyes,” he says. “I was
more interested in explaining to
the judge who my client was and
why he or she did it and why he
or she was worthy of a break.”
Back in his office, Hoelter
explains how NCIA does that.
Since being enacted in
the federal sentencing [
lines have bloated to a thousand
pages — a complexity
upward and downward \
ances judges can make in
crime categories.
“The guidelines were promul
gated with the notion thatfaimes
in sentencing would happen-l
guy who robs a 7-Eleven for$1(1
doesn’t get hit for 10 years whet
the guy who robs the savin]
loan for $100 million gets proba
tion,” says Hoelter. “But now
a disaster that has reshaped the
entire federal judicial system"bj
taking discretion out of
judge’s hands.
“Everybody goes to j;
There’s now a presumption
incarceration,” says Hoell
adding that this has contribute!!
to the federal prison populalii
increasing from 30,000 in 191
to 165,000 now.
He runs his finger down
column of codes and figun
representing months in prisonic
the sentencing guidelines. “
can see that the number of
zeroes are very few,” he says
“The government firmly
believes that white-collardefeii'
dants need to spend a lotoftinif
in prison to learn their le
That makes our job all the more
necessary.”
J
Volume
MICHAMl. WILI.IAMSON • THE WASHINGTON POST
“The average white-collar criminal now gets prison," says sentencing a political reaction.” Hoelter helps arrange mitigated sentences fora
consultant Herb Hoelter, and harsher guidelines are "nothing more than victed white-collar citizens.
The Tex
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NEWS IN BRIEF
U.S. House approves
ban on flag burning
WASHINGTON (AP) - In what
Democrats called an annual
GOP rite of spring, the
Republican-controlled House
passed an amendment to the
Constitution to criminalize flag
burning for the fifth time in eight
years on Tuesday.
The one-line change to the
Constitution - "The Congress
shall have power to prohibit the
physical desecration of the flag
of the United States" - was
approved by a 300-125 vote as a
pair of holidays approach-
Day next Saturday
Independence Day in July.
Senate passage is less I
The constitutional amendment
needs a two-thirds majority in
the House and Senate and
approval by three-fourths of
state legislatures.
Burning an American flag
shows disrespect for America,
and the majority of the American
people approve of legally pro
tecting Old Glory, supporters
said. "If we allow its defacement
we allow our country's gradual
decline," said Rep. Steve Chabot
R-Ohio.
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