New York Federal Criminal Practice Blog
August 25, 2008

SDNY Judge Sentences Cooperator in Fraud Case to Six Months Intermittent Confinement and Six Months Home Detention

Has a cooperator who helped convict ten other defendants earned a non-custodial sentence?  How should a sentencing judge weigh the competing factors of rewarding and punishing the cooperating defendant?  These are the questions that have sparked a short and thought-provoking decision from SDNY Judge Marrero in United States v. Losovksy, 06 cr 857, 2008 WL 3166679 (S.D.N.Y. August 4, 2008).

Facts and Holding

Losovsky was charged with fraud arising out of his participation in a boiler room scheme, that affected more than 230 investors and caused more than $6.5 million in losses, $497,000 of which was directly attributable to Losovsky’s conduct.  He cooperated successfully, and the government moved for a downward departure from the applicable sentencing range (which was not specified in the decision).  Rejecting the defense request for straight probation, the court instead imposed a sentence of six years probation, with six months of intermittent confinement in a half-way house, followed by six months of home detention.

The opinion lays out the “vexing difficulties” raised in sentencing a cooperator: the “vital role” of cooperators in federal law enforcement; the “heavy personal price” they pay in terms of increased sentencing exposure or threats to their security and that of their families; and the other “multiple imperatives of sentencing,” such as the nature of the crime, the defendant’s criminal history, deterrence, incapacitation and promoting respect for the law.  While cooperators may harbor hopes of “categorical absolution” in the form of a probationary or time-served sentence, however, the court concludes “such high level of relief and comfort at sentencing” would send the signal that crime pays.  “Any would-be offender who knew he could commit a crime with others and, having acquired sufficient fruits of the deed, then turned himself into a cooperator practically assured of probation or a brief period of time-served, would have a powerful incentive to cross the line.” 


Of course, any would-be offender who is relying on cooperation as his/her escape hatch would be well-advised to think again.  Opportunities to cooperate do not arise in every case (the targets may have disappeared or the government may already have all it needs through its own investigation or someone who passed the cooperation post first); when they arise, an individual may not qualify for a deal (another defendant proves a more effective or less compromised witness); and even the cooperation deals made in heaven can crash and burn (a drug binge can be an obvious example). 

While some defense lawyers and even prosecutors may be disappointed by this decision, it should be pointed out that, according to Pacer, other defendants in this case were sentenced to terms of imprisonment ranging from 18 to 150 months.  And intermittent time is far less severe than real time.  In this era of overcrowded prisons and excessive sentences, more judges should consider intermittent sentencing as a way of punishing the individual without destroying the soul. 

See Archives for all posts since September 2007.