[JURIST] The US Department of Justice (DOJ) [official website] on Thursday criticized the US Sentencing Commission [official website] after a federal panel introduced a proposal which would reduce prison time for white-collar criminals. The DOJ objected to the panel’s ideas to reduce prison sentences for various fraud-related crimes. Reports indicate that the commission has proposed a new policy [Reuters report] that could reduce fraud related sentences by 26 percent. The DOJ stated that the new proposed sentence reductions are against an “overwhelming societal consensus.” Many members of the panel were skeptical of the DOJ’s arguments, including Circuit Judge William Pryor [official profile] found the DOJ’s arguments “singularly unpersuasive.” Current data has shown that many federal judges view the current guidelines for fraud sentencing as overly driven by victim losses and have often consistently given lower sentences than recommended.

Many fraud cases continue to be litigated in the wake of the 2008 financial crisis. Last July Citigroup, Inc. [corporate website] agreed [JURIST report] to pay USD $7 billion to settle a federal inquiry into mortgage-backed securities sold by the bank prior to the financial crisis. The US Supreme Court [official website] granted certiorari [JURIST report] in April to hear a mortgage lending case in which Countrywide failed to provide required information and the borrowers attempted to rescind the loan. In February the Supreme Court heard oral arguments [JURIST report] on a subprime mortgage fraud case. Earlier that month JPMorgan Chase [corporate website] paid [JURIST report] a USD $614 million settlement to the US government for its role in approving unqualified mortgages for government insurance.