In U.S. v. McVay, No. 04-13455 (May 5. 2006), the Court, on a government appeal, reversed the sentence of probation only imposed on a former financial officer of HealthSouth, who pled guilty to fraud charges that resulted in losses of $400 million.
At sentencing, the government moved for a § 5K1.1 reduction of sentence, based on McVay’s cooperation. The Guideline sentence was 87 months. The district court departed well below the government’s recommended level, imposing a 60-month sentence of probation, and no jail term.
The Court pointed out that the sentencing court’s only explanation for its downward departure was the defendant’s "exemplary record" before he committed the offense, and the circumstances surrounding his daughter. The Court pointed out that none of these factors were relevant to the 5K1.1 factors identified in the Guidelines, such as the usefulness of the defendant’s assistance to the government, and the reliability of his information. The Court therefore remanded for resentencing, pointing out that even under advisory guidelines a sentencing court must correctly calculate the Guideline sentence. The Court further noted that, under advisory Guidelines, the farther the court diverges from the advisory guideline sentence, the more compelling the reasons for its divergence must be. The Court concluded that, in the absence of truly compelling reasons, a probation sentence for a multi-billion dollar securities fraud at the expense of the investing public was "not easily reconcilable" with the purposes of punishment set forth in 18 U.S.C. § 3553(a).
