Shopkeepers shouldn’t be sentenced to jail time for identity theft, probation office says
WASHINGTON – Two ex-Deutsche Bank DB -1.40%
traders convicted of manipulating precious metal prices should not go to jail, federal probation officers have recommended, prompting a backlash from prosecutors who have asked for sentences of nearly five years or more.
In September, a federal jury convicted James Vorley and Cedric Chanu of wire fraud after a two-week trial over their trading in gold and silver on futures exchanges operated by CME Group. Inc.
Prosecutors alleged the pair engaged in identity theft, a type of rapid market manipulation that traders and regulators say was once prevalent in the futures markets.
The Department of Justice has made identity theft a central part of its agenda to fight white collar crime; more than 20 people, many of them former global bank employees, have been charged with identity theft-related crimes since 2014. But last year’s verdict was only the second conviction in a court case. ‘a futures trader for identity theft. Eight traders pleaded guilty and one was acquitted, while another trial ended with a suspended jury.
The government said in a court filing late last week that it “opposes, in the strongest terms”, the US Probation Office’s recommendation that the two men not be jailed. The government has called for a sentence of 57 to 71 months. MM. Vorley and Chanu are to be sentenced at the end of June.
“If hard-won convictions are not punished with severe penalties, there is a real risk that market manipulation offenses will not be prosecuted,” prosecutors wrote in their sentencing memorandum.
The Justice Department and a lawyer for Mr Vorley declined to comment. A lawyer for Mr. Chanu did not respond to a request for comment.
Federal probation officers work for U.S. district courts and advise judges on how to calculate sentences. They sometimes disagree with prosecutors when the two sides differ over what factors to apply to sentencing guidelines, said Douglas Berman, professor at Ohio State University Moritz College of Law.
The identity theft of MM. Vorley and Chanu generated losses for other market players of between $ 1.1 million and $ 1.4 million, according to prosecutors. Prosecutors calculated this figure by including many trades – described as manipulative – that were not included in the charges for which the traders had been convicted.
Probation officers, on the other hand, recommended not to increase the amount of financial losses for sentencing purposes, according to court documents. The probation office report is confidential but its recommendations were discussed in the prosecutors’ sentencing memorandum.
Judges may consider other acts in deciding how to convict someone, even if the accused has not been convicted of that conduct, Berman said.
“Much of the severity of the sentence depends on the magnitude of the loss,” Berman said. “The basic logic is solid, but what happens in these difficult cases causes the guidelines to turn so much on this defining question of ‘what is a loss? “.”
Lawyers for the defendants told the court the jail would be excessive, in part because banks’ policies on identity theft were vague or nonexistent for many years they were in business. The Chicago jury convicted them of illegal trading that occurred between 2010 and 2012. An anti-spoofing law came into effect in 2011, and Deutsche Bank first trained its traders to avoid spoofing in 2012, trial testimonies show .
Both men lost lucrative business careers after being charged with crimes in 2018, their lawyers wrote in their sentencing briefs. Mr. Chanu, a French citizen who lives in Dubai, “is virtually penniless” after years of paying lawyers to defend him.
The financial loss attributed only to deals on which Mr Vorley, a British citizen, was convicted “would be well below $ 6,500”, his lawyers wrote. Federal sentencing guidelines do not increase the severity of a financial crime if the loss is less than $ 6,500.
Probation, including a period of house arrest, would be a reasonable alternative, his lawyers argued.
Learn more about identity theft
WSJ articles on once obscure business practice, selected by editors.
Write to Dave Michaels at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8