In U.S. v. Martin, No. 05-16645 (July 11, 2006), on a government appeal of a sentence for a defendant convicted in the HealthSouth fraud, the Court vacated the sentence and remanded for resentencing.
After a first sentencing at which the district court imposed no imprisonment and only probation, and after a first remand after appeal based on the district court’s failure to explain its reasons for its significant downward departure, at resentencing the district court imposed just a seven-day sentence, noting the defendant’s substantial cooperation with the government in the prosecution of others involved in the fraud. The government appealed, arguing that, although the defendant should get a sentence reduction for cooperation, the sentence was too low in relation to his guideline range of 108-135 months.
Citing U.S. v. McVay, 447 F.3d 1348 (11th Cir. 2006), in which the Court vacated the lenient sentence imposed by the same district court on another executive involved in the HeathSouth fraud, the Court noted that a light sentence for such a massive fraud was not easily reconciliable with the § 3553(a) factors. Here, the district court made a 23-level downward departure. Even Martin’s extremely valuable cooperation was "not a get-out-of-jail-free card." Further, the district court erred by taking into account the "injury" to Martin resulting from his exposure to civil liability for his fraud, a liability which resulted not from his cooperation but from his misconduct. A seven-day sentence is "shockingly short." It failed to serve the purposes of § 3553(a), in failing to reflect the seriousness of the conduct, and to afford adequate deterrence (which the Court found particularly important in the context of white-collar crime). Further, though the district court cited the lack of jail time of the lead defendant, Richard Scrushy, he was not a "valid comparator" because he was acquitted on all counts. Finally, the Court ordered the case reassigned to another district judge, noting its prior reversals of the judge in this and related cases.
