Sixth Circuit Overules Judge For 99% Sentencing Reduction

Michael Peppel, a former CEO of MCSi Inc., who pleaded guilty to a scheme that ultimately led to the bankruptcy of his company, was facing 10 years in prison for his criminal activity. The trial court decided that seven days was long enough-- the Sixth Circuit vehemently disagreed.

The Sixth Circuit Court of Appeals ordered that Peppel be resentenced for his guilty plea to conspiracy to commit fraud, false certification of a financial report and money laundering. The Sixth Circuit said that a district judge in Cincinnati abused her discretion by handing down an “unreasonably low” sentence of seven days.

Peppel had been accused of working with his CFO to inflate the results of some sham transactions with a fake company to pump up the company’s numbers. During the same time Peppel was accused of unloading company stock and making millions in profits as share prices rose due to the financial trickery. Not long after he launched his scheme, Peppel’s company went bankrupt and 1,300 people were out of work.

Prosecutors pushed for severe punishment as a deterrent to others and asked that he be given between 97 and 121 months in prison. According to federal guidelines this length was recommended, though not technically required.

The judge who heard the cases said that the years since the indictment had been punishing enough for Peppel and that she felt sorry for him because he had a family to support and a brother with multiple sclerosis. The judge continued saying that she believed Peppel was a “remarkably good man” and that his mistakes should not define him. The judge concluded that it would be a waste of taxpayers’ money to incarcerate someone who has the ability to add so much to the country’s economy. He was sentenced to a week in jail, a $5 million fine and three years of supervised release.

The Sixth Circuit concluded that the district court judge was wrong to rely on unremarkable aspects of Peppel’s life to justify a 99% reduction in the recommended prison sentence. The Sixth Circuit opinion said that nothing in the record showed that Peppel had any more extraordinary support or family obligations than any other defendant who faces a possible criminal sentence. The case was remanded for resentencing.

To read the full opinion, click here.

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