Lori Loughlin and Husband to Plead Guilty Friday

Actress Lori Loughlin and her husband Mossimo Giannulli will plead guilty today in federal court in Boston via video-conference to conspiracy charges in the college cheating scandal "Varsity Blues" case.

Loughlin will plead guilty to one count of conspiracy to commit wire and mail fraud, while Giannulli will plead guilty to one count of conspiracy to commit wire and mail fraud and honest services wire and mail fraud.

As part of the plea, Loughlin has agreed to serve a two month sentence of incarceration and Giannulli has agreed to a five month sentence.

Loughlin's plea agreement is here and Giannulli's is here. [More...]

Unlike most if not all of the other plea agreements in which the defendants are free to argue for a lesser sentence than the one recommended by the prosecutors, these agreements are pursuant to Rule 11 ©(1)© where the judge gets to agree with the sentence the parties agreed on or reject it. If he rejects it, the defendants can withdraw their guilty pleas. The judge can give a lesser sentence -- but the defendants can't ask for one, it has to be something the Judge decides to do.

In other words, while they can't explictly ask the judge for probation or home detention, they can file lengthy sentencing briefs with letters from friends, relatives, community leaders, etc. detailing their philanthropic contributions and pointing out the danger of a lengthier prison sentence would be due to the coronavirus, and hope the judge decides on his own to impose home detention in lieu of prison. Their plea agreements say they won't have to serve any sentence until at least 90 days after sentencing. Sentencings don't take place until at least 10 weeks after the plea. So they have at least 160 days, or at least until November before they would have to report.

Most of the Plea Agreements and Charging Documents are available here.

Here's how the case escalated, with the government adding more charges for those that refused their earlier plea overtures.

Some of the parents serving their sentences have gotten released early due to the coronavirus.

For me, the most interesting facet of this case is how the Government misconstrued the applicable sentencing guideline range for everyone, according to the Probation Department and the Court. It's pretty technical and may not make sense to anyone who doesn't deal with the U.S. Sentencing Guidelines, but if you want to give it a try, here's a Court order on it from the case of one of the first sets of parents to plead guilty. At one point, the Court asked the Probation Department to weigh in and it did so here.

Essentially, the Government thought the defendants would be sentenced according to the amounts they paid the cooperating cheating scandal leader Rick Singer, which the government erroneously concluded was the "amount of loss" in each case. When the Probation Department disagreed, it tried to say the bribery guideline applied, only the government hadn't charged bribery but fraud. According to the Probation Department, which the court agreed with, only the fraud guideline applied and there was zero loss. No schools were out money, and the only people out money were the conspiring defendants, who paid money to another coonspirator, Rick Singer, who was hardly a victim. As a result, the guideline range for most of the defendants was 0 to 6 months, rather than the 12 to 24 month or higher range the government got the defendants to agree to in their plea agreements. As one defendant's lawyer summarizes in his sentencing statement (19-cr-10131-NMG Document 335):

The plea agreement states that the applicable guideline range is established by U.S.S.G. § 2B1.1(a)(1), with a twelve-level increase pursuant to § 2B1.1(b)(1)(G) for the “loss” that Mr. Macfarlane inflicted on victims—i.e., the amount of money that [defendant] paid ($450,000), leading to a total offense level of 16 (after a three-level reduction for acceptance of responsibility).

Probation disagrees with that conclusion. After conducting its own investigation and analysis of the applicable guidelines, Probation rejected the government’s various theories that USC (University of Southern California) has sustained a cognizable “loss.”....Consequently, Probation concluded that there should be no upward level increase pursuant to § 2B1.1(b)(1)(G), that the adjusted offense level is seven and that the total offense level (after a two-level reduction for acceptance of responsibility) is five.

The Government then tried to rely on the bribery guideline, but no dice. Probation and the Courts said if the Government wanted to rely on the bribery guideline, it should have charged bribery and had the defendants plead to that charge rather than the wire fraud charges.

The Government still isn't giving up on its rejected theory. In Lori Loughlin's plea agreement, it calculates her guidelines using its discredited theory, while she calculates her guideline according to Probation and the Court's calculations. The Government comes out at level 16 which with no prior criminal record is a range of 21 to 27 months, while Loughlin calculates her guideline range at level 3, which with no prior criminal record, comes out at 0-6 months. (Loughlin credits herself with a two point reduction for having a minor role in the conspiracy. I doubt she will prevail on that since it wasn't given to less culpable parents. But even if she's a level 5 like the other parents, she's still at 0 to 6 months.

The guidelines are not mandatory. Courts are not even to presume they are reasonable. They are the starting point, and every court is charged with calculating them correctly as a first step in the sentencing process.

The government surely knows by now it's barking up the wrong tree to keep arguing that the higher guidelines apply. So agreeing to a 2 month sentence for Loughlin and a 5 month sentence for her husband who pleaded to an additional means by which the fraud was committed than she did, is likely no more nor less than the Court would sentence them to if they pleaded guilty without an agreement. In other words, I don't see any special treatment here. I see mistakes by the Government (and some defense lawyers who stipulated in plea agreements to the government's erroneously calculated guidelines).

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