06 Jan 24

The Safety Valve for White Collar and Financial Crimes: Qualifying Exceptions

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Last Updated on: 13th January 2024, 03:17 am

The Safety Valve for White Collar and Financial Crimes: Qualifying Exceptions

For those facing charges for white collar or financial crimes like fraud or embezzlement, the prospect of years or even decades in prison can be daunting. However, there are certain exceptions in the law, like the “safety valve,” that allow judges more discretion in sentencing for qualifying defendants. This article will break down when and how the safety valve can apply to white collar crimes.

What is the Safety Valve?

The safety valve is a provision in federal sentencing guidelines that allows judges to hand down sentences below the mandatory minimums prescribed by law, if certain conditions are met. It was originally only applicable to certain drug offenses when it was enacted in 1994, but the First Step Act signed into law in 2018 expanded it to apply to more drug crimes and some non-violent crimes as well.The main purpose of the safety valve is to give judges more discretion in sentencing those with minor roles in criminal activity, versus kingpins and organizers. It also incentivizes defendants to cooperate fully with prosecutors. For any defendant facing long mandatory minimum sentences under federal guidelines, qualifying for the safety valve can mean years less prison time.

Safety Valve Conditions

For a defendant to qualify for the safety valve exception in sentencing, they must meet all five of the following conditions:

  1. The defendant has little to no prior criminal history (no more than 4 criminal history points under federal guidelines).
  2. The defendant did not use violence or threats, or possess a dangerous weapon like a firearm during the crime.
  3. If convicted of a drug crime, the offense did not result in death or serious bodily injury.
  4. The defendant was not an organizer or leader in the criminal activity – their role was minor.
  5. The defendant has truthfully provided all evidence and information about the crime to prosecutors. This usually involves sitting down for a “safety valve proffer,” answering all questions from prosecutors fully and honestly.

If any one of these conditions is not met, the defendant will not qualify for safety valve exceptions at sentencing.

How the Safety Valve Applies to White Collar Crimes

When the First Step Act expanded eligibility for the safety valve in 2018, it opened up the possibility for its application to more white collar and financial crimes. However, legal experts note that it will still only apply to a minority of such cases.The main barriers are the conditions about not playing an organizing or leadership role, and having to fully disclose details of the crime. For complex fraud schemes and embezzlement conspiracies that can go on for years, it may be impossible for one defendant to provide the level of information required, especially if they were a key player.However, the expansion of the safety valve does offer hope for some first-time, low-level white collar offenders who made foolish mistakes but were not criminal masterminds, like:

  • Junior employees ordered by bosses to falsify financial statements
  • Accountants or bankers who got caught up in fraudulent schemes they did not organize
  • Money mules unaware of the full operations of drug or fraud conspiracies
  • Bit part players in non-violent schemes who can fully disclose their own roles

For these types of offenders facing serious charges for the first time, with no prior records, qualifying for the safety valve can mean avoiding extremely long sentences of 10+ years in favor of just months or a few years behind bars.An experienced federal criminal defense lawyer will know how to approach the safety valve proffer session, ensuring prosecutors see the defendant played a truly minor role in the conspiracy and has provided full disclosure within their knowledge. This can then convince prosecutors to agree the defendant meets safety valve conditions.

Will the Safety Valve Apply Retroactively?

A common question is whether the 2018 expansion of the safety valve will apply retroactively to those already serving long sentences for white collar crimes under old guidelines. Unfortunately, per the text of the First Step Act itself, these changes are explicitly not retroactive. The safety valve expansion only applies to convictions entered from the date the Act went into effect onward.However, the Act did also include a provision allowing prisoners to petition courts for re-evaluation of sentences based on changes to guidelines during their incarceration. So there is a mechanism for those already serving long white collar sentences to request re-sentencing under new safety valve rules. An attorney can file these petitions on a prisoner’s behalf. But it will be up to the judge’s discretion whether to apply new standards retroactively.