The current federal sentencing guidelines for organizations stipulate that any economic crimes resulting in losses between $400,000 and $1 million result in an immediate 14 level increase from the base offense. According to the American Bar Association, undue emphasis has been placed on financial losses and other arguably important factors ( i.e., culpability and impact on the victim) have been left by the wayside when determining sentences for economic crimes. Their solution? A revision to the FSGO.
During a symposium on economic crime held in September, the ABA submitted several proposed amendments to the Sentencing Commission. The revisions are an attempt by the ABA to ensure that for all intensive purposes the punishment fits the crime. While Melinda Haag, U.S. attorney, states that the DOJ believes that the current guidelines are tough but fair, she also acknowledges that “in some cases, loss may overstate the seriousness of the offense.” By the ABA’s reasoning, it could also understate it, if the monetary loss pales in comparison to the extent to which the crime impacts the victim.
So how does this affect compliance, you ask? Maybe you’re saying, sure, if the Sentencing Commission revises the guidelines it will affect how non-compliant employees are punished, but that doesn’t affect me. Or does it? Because current guidelines are seen as severe with punishments sometimes far overreaching the crime, employees with the propensity to commit crimes might be less likely to take the risk. However, if revisions are made – if people learn how to commit an economic crime in such a way that its harmful impact is insignificant, because they know that the judicial system will look more kindly on that – they may be more likely to try. As a compliance professional, it is your job to foresee and mitigate such risks – one way to start is to take a look at your current program seeing if you have adequately applied the seven elements of the current FSGO.
Whitepaper | Seven Elements: Staying Aligned with the Federal Sentencing Guidelines
Download our paper to learn about the components necessary for a solid compliance program that leverages your code of conduct, proactive assessment, ethics and compliance training, and consistent incident management practices to protect your organization and apply FSGO ethics standards.