Chronicle business columnist Loren Steffy — who blogs over at Full Disclosure — does not generally share my view that government has gone overboard in the post-Enron era of criminalizing merely questionable business transactions. However, when it comes to the sad case of Jamie Olis, Mr. Steffy in his column today says enough is enough:
Olis’ boss, Gene Foster, and a co-worker pleaded guilty to one count of fraud in exchange for a maximum sentence of five years. Olis fought the charges, lost, and bore the burden of the entire stock loss, which resulted in a sentence almost fives times longer than what his former boss faces.
His sentence is only one year less than WorldCom’s Bernie Ebbers, who oversaw the biggest accounting scam in U.S. history, a fraud of more than $11 billion.
Olis may have helped commit a crime, but it was far from Ebbersian in its proportion. After all, Olis didn’t directly profit from Project Alpha. He didn’t enrich himself at shareholders’ expense.
The Supreme Court earlier this year ruled that the strict guidelines that Lake used are not mandatory, that judges should have latitude for judicial prudence.
That gives Lake an opportunity to restore rationality to Olis’ sentence.
A jury found Olis guilty, and for that he should pay a price. He has. Olis, who was ordered to report to prison in May 2004, has already served 18 months. Lake hasn’t scheduled a hearing on a new sentence, and by the time the process is done, Olis will be closing in on two years. Lake should consider time served and set Olis free.
Justice holds a sword, but she also holds a scale. And the scale is supposed to be balanced.
Amen. And here’s hoping that Judge Lake takes note that the position on market loss that the government promoted to him at Mr. Olis’ previous sentencing hearing — and that led to the imposition of the draconian 24 year sentence — was directly contradicted by the position that the government was taking at the same time before the Supreme Court in Dura Pharmaceuticals v. Broudo (see earlier post here).
By the way, in regard to the market loss issue, Mr. Steffy quotes Clear Thinkers favorite Larry Ribstein, who has been one of the academic bloggers at the forefront of publicizing the injustice of the Olis case.