Case Study from Federal Court
Case Study:
Jerry Lundergan Sentencing
If you want to know what happens at a sentencing hearing in federal court, you may want to consider the following case study from Jerry Lundergan’s sentencing hearing on July 16, 2020. I attended that sentencing hearing.
After a jury convicted Jerry of crimes related to money he donated to his daughter’s political campaign, prosecutors asked Judge Gregory Van Tatenhove to sentence Jerry to 63 months in federal prison. The judge had the good sense to reject the prosecutor’s recommendation.
Recognizing the extraordinary life that Jerry has lived, and the magnificent contributions he has made, Judge Van Tatenhove sentenced Jerry to 21 months. In this article, we’ll breakdown the sentencing hearing as I observed it.
First, let me provide some background on the amazing life of Jerry
Section 1—Background:
Jerry Lundergan is one of America’s most successful entrepreneurs, and he is an extraordinary citizen. Let me tell you how I know.
In January of 2020, Jerry reached out to my partner, Justin Paperny. Justin leads White Collar Advice, our division that helps people face challenges with judicial proceedings, sentencing, or imprisonment. Justin introduced me to Jerry.
When I spoke with Jerry, I learned that a jury convicted him of a series of crimes related to national politics. Few Americans would understand this crime, and why prosecutors would choose to bring criminal charges against a great man. I’ll do my best to explain—in accordance with what I understand.
Section 2—The Senate Campaign:
Jerry’s daughter, Alison Lundergan-Grimes, is a lawyer and a public servant. She served as the Kentucky Secretary of State from 2012 through 2020. In 2014, leaders from the Democratic party urged Alison to run for the United States Senate. In that campaign, she would be running against one of our nation’s most influential senators, Mitch McConnell, the Majority Leader for the U.S. Senate.
As any father would, Jerry Lundergan wanted to support his daughter’s career. Using his corporate credit card, or his corporate checking account, Jerry contributed a cumulative total of approximately $242,000.
It is important to note that Jerry and his family are the sole owners of various corporations. Those corporations, cumulatively, employ more 1,000 people. Jerry’s companies do not have any outside shareholders. Through his business holdings, considering payroll taxes, property taxes, and various income taxes, he has paid tens of millions in taxes to fund our community. Those tax dollars pay for our nation’s infrastructure, including our schools, hospitals, roads, and bridges. They even pay for our judicial and prison system.
There is no allegation of a single human being, or any business entity, losing a single penny due to the $242,000 contribution that Jerry contributed to his daughter’s campaign. As the founder of various companies, Jerry believed that he could choose how to deploy money that his company earned.
Section 3—Campaign Finance Laws:
Legislators passed laws to ensure that we have fair elections in our country. Those laws place restrictions on how much money corporations can contribute to national political campaigns. Theoretically, the legislators passed those laws to ensure that big corporations would not attempt to use vast financial resources in an unfair way to “buy” elections.
Jerry’s businesses are successful, but they are family-owned businesses—as contrasted by large corporations. Nevertheless, if a company makes a financial contribution to a political campaign, restrictions apply.
Since business entities that Jerry owned contributed $242,000 to his daughter’s campaign, authorities charged him with violating campaign finance laws. And after a jury convicted Jerry, prosecutors asked a judge to sentence him to 63 months in federal prison.
The irony is that if Jerry had given the $242,000 from his account rather than his business account, he would not have violated the campaign finance laws. The charge did not suggest Jerry tried to hide money. Nor did prosecutors allege that Jerry tried to influence his daughter’s decisions. There were no allegations that Jerry attempted to evade taxes or deceive anyone.
Authorities have discretion. Instead of charging Jerry with a crime, they could have used a civil procedure that would have resulted in a fine. But they did not. With our nation’s commitment to mass incarceration, authorities believed the right response would be to charge Jerry Lundergran with a crime. Then, they asked a judge to lock him in federal prison for a 63-month sentence.
Section 4—Politics:
In the late 1800s, John Dalberg-Acton, a historian and politician, said that “Power tends to corrupt, and absolute power corrupts absolutely.” We may never know why authorities chose to charge Jerry with a crime when they had the discretion to pursue a civil remedy.
As an observer of national affairs, I could hypothesize. History is replete with examples of how powerful men abuse their authority. We even see it in fiction. For example, one scene in The Godfather shows how a powerful mafia chief from Corleone’s town wanted to kill a young boy to ensure the young boy would not seek revenge after he grew to become a man. Similarly, in politics, powerful forces sometimes conspire to obliterate potential rivals before those rivals create the power to undermine their authority.
- Is it possible that Mitch McConnell saw Alison Grimes Lundergan as a potential rival to his power?
- Is it possible that powerful forces could influence the decisions of ambitious prosecutors?
- Is it possible that a zealous prosecutor could see how convicting a person like Jerry Lundergan would enhance his professional resume, opening future career opportunities?
Regardless of behind-the-scenes machinations that led authorities to charge Jerry Lundergan with a crime, we know the result:
- A criminal investigation began.
- A prosecutor convened a grand jury.
- A grand jury indicted Jerry.
- A criminal trial followed.
- A jury convicted Jerry.
- A presentence-investigation followed.
- On July 16, Jerry had to appear for sentencing.
Section 5—Documenting an Amazing Life Before Sentencing:
When my friendship with Jerry began, he was a 72-year-old man, highly distinguished by his accomplishments. Jerry grew up in the town of Maysville, Kentucky. After graduating high school, he began studying at the University of Kentucky. Then, an early death took the life of his father. Wanting to ease the financial burdens on his mother, Jerry took the reins of his father’s small business when he was 18. Soon after that, the company failed, forcing Jerry into bankruptcy.
Rather than allowing the bankruptcy to define his life, Jerry recalibrated. With a solid work ethic, he started over. He married Charlotte. Together, they brought five daughters into the world. And over the next 50 years, the family built a series of businesses, including Lundy’s Catering, Emergency Disaster Services, and Signature Special Event Services. His family-owned blue-collar businesses serve communities in all 50 states.
Besides becoming financially successful, Jerry has a long and distinguished record of living as an honorable citizen. For example, he was under no obligation to revisit debts that a bankruptcy court had discharged. Yet as Jerry’s new businesses began to succeed, he revisited those old debts. One-by-one, he paid them off.
During the week leading up to Jerry’s sentencing hearing, I toured the operations of several of Jerry’s businesses. With one of his most trusted team members, David, I drove from Lexington to Jerry’s hometown in Maysville, Kentucky. David told me that he had come from an impoverished family. When he was only 11 years old, David had some problems with juvenile delinquency. Wanting to help, Jerry gave David a job. He has been working by Jerry’s side ever since, for more than 40 years.
David opened my eyes to many of the contributions that Jerry has made to our nation. Besides creating thousands of jobs, he continues investing resources to preserve his hometown of Maysville and Lexington. For example, every year, Jerry funds the Christmas decorations for Maysville. He purchases abandoned buildings and restores them to good order. He establishes his businesses in Maysville, generating tax revenues to support the community. In Lexington, he sponsors programs to help the homeless. During the pandemic, most recently, Jerry collaborated with the Salvation Army to feed more than 100,000 meals to homeless people.
All of that information was available to prosecutors. But instead of celebrating his generosity, the prosecutors spun his 50-year record of good citizenship. They tried to define him as a man of “privilege,” saying that he should have known better.
Section 6—What Happens at a Sentencing Hearing?
What Happens at a Sentencing Hearing in Federal Court?
On the morning of July 16, 2020, I drove from Lexington to the John C Watts Federal Building in Frankfurt, Kentucky. I arrived by 9:00 am, and at 10:00 am precisely, a bailiff ordered everyone in the room to stand for the Honorable Gregory Van Tatenhove.
At the start of the proceedings, I took a headcount. On the left side of the courtroom, I counted six people. On the right side of the courtroom, I counted 24 people. In the jury box, there were six members of the press. Between the judge and the audience, there were another 14 people. By my count, there were more than 50 people in the proceeding, and several more people joined the sentencing proceeding before it concluded after 4:00 pm.
Judge Van Tatenhove is a distinguished-looking man with a mane of white hair. Immediately upon sitting down, he got to business. I looked at Jerry’s family members. I saw the signs of nervousness, with bouncing knees, shaking hands. They had been living with the horrors of criminal prosecution for several years. With worries that the judge would rubber-stamp the prosecution’s request, they watched, knowing that it would be possible that Jerry could be taken into custody that day.
After asking the attorneys for both the defense and the government to identify themselves, the judge said that he would adhere to an orderly progression. First, he would listen to objections regarding the presentence-investigation report and make findings. Then, he would move to the factors outlined in Title 18 USC, Section 3553, which I’ll explain below.
Section 7—Sentencing Factors:
Presentence Investigation Report:
The Presentence Investigation Report (PSR) is a critical document that influences every sentencing proceeding. Besides controlling the sentencing hearing, the PSR follows a defendant throughout his journey in the criminal justice system. Prison officials rely upon the PSR to assess an individual’s custody-and-classification scoring. The PSR can influence the types of programs a person can work through while in prison, and potentially affect his release date. It would also be influential to the level of liberty a person has after he concludes the prison term and begins the term of supervised release.
Title 18 United States Code, Section 3553:
This section of the law dictates seven factors that a judge must consider before imposing a sentence. Those factors include:
- The nature and circumstances of the offense, as well as the history and characteristics of the defendant;
- The need for the sentence to reflect respect for the law, just punishment, deterrence, protection of the public, and rehabilitation opportunities;
- The kinds of sentences that are available;
- The sentencing range as established by guidelines;
- Applicable public policy statements;
- Avoiding sentencing disparities; and
- The appropriateness of restitution.
Section 8—Structure, Part 1, PSR Clarity:
Before the sentencing hearing, both the defense attorney and the prosecutor submitted their commentary to the Presentence Investigation Report that a federal probation officer had prepared. The judge told everyone in the audience that he had read everything previously. He wanted to hear how both parties would argue their positions.
First, he allowed the prosecutor to argue. Then, he allowed the defense attorney to respond. He would go back and forth, listening to both parties, and asking inciteful questions of each party.
From 10:00 am until approximately 2:00 pm, we listened to the various positions, learning a great deal along the way.
Prosecutors wanted to portray Jerry as being a calculated criminal. Sadly, as we listened, it felt as if the judge’s questions were making the prosecutor’s case. They covered issues such as invoicing for services rendered by vendors, and Jerry’s liability, such as whether he “engaged” in illegal activities or “caused” illicit activities. The judge wanted to hear arguments on which type of behavior would be more egregious.
The judge wanted to hear both sides on whether a sentencing enhancement would be appropriate for Jerry’s alleged “leadership” role in the offense. And he tried to understand whether Jerry obstructed justice regarding compliance with a request for records before the start of the trial.
While methodically working through each of the defense team’s objections to the PSR, the judge chose to side with the prosecution on all but one salient point. The judge’s findings placed Jerry with an offense level of 24, in the Federal Sentencing Guidelines. Given Jerry’s lack of criminal history, that finding exposed him to a guideline range of between 51 and 63 months.
Section 9—Structure, Part 2, 3553 Factors:
The seven factors mentioned above regarding section 3553 are crucial. They give a judge discretion to depart from the ranges in the sentencing guidelines, which are only “advisory,” or a starting point. After listening to the more clinical arguments of the presentence investigation report, the judge listened to the prosecutor make his case on why the judge should not grant Jerry leniency. Since the judge previously ruled that Jerry scored an offense level of 24, the prosecutor dropped his initial recommendation of 63 months and asked the judge to sentence Jerry to 51 months in prison.
Despite there not being any financial loss (other than the money that Jerry chose to donate to his daughter’s campaign), the prosecutor insisted that the crime was severe, causing enormous societal harm. The prosecutor acknowledged that Jerry could have given her the money legally if he had not given it from his corporation.
The prosecutor acknowledged that “deterrence” wasn’t a valid factor, because citizens would not be likely to give more than $200,000 to their child’s national political campaign. Still, he argued that a substantial custodial sentence would be necessary to promote respect for the law. Rather than recognizing Jerry’s origins in poverty and bankruptcy, the prosecutor inferred that he was a man of wealth and privilege—ignoring the hard work and goodwill Jerry has sown along the way.
Following the prosecutor’s request for vengeance, the judge turned to the defense attorney, giving him discretion on how to structure the presentation. First, we heard from Jerry’s daughter Abigail. Then, we heard from his daughter Alisa. Jerry’s daughters offered an eloquent defense of Jerry’s good character. Then we listened to a character witness from Jenny Ramsay, of the Catholic Action Center. She spoke about all the good that Jerry had done for his community, including providing meals for more than 100,000 homeless people. And finally, we heard from Jim, a Catholic priest that testified about Jerry being “an instrument of forgiving and healing,” with a lifetime of community contributions. Father Jim spoke about how he witnessed Jerry’s work to build healthier communities.
After the four witnesses spoke about Jerry’s character, we listened to Jerry’s defense attorney talk about Jerry’s kindness and good citizenship. And finally, at 3:00 pm, Jerry stood for his allocution. He delivered his speech from the heart. During the 15 minutes that he spoke, Jerry graciously spoke about his career. He thanked the judge for what he perceived to be fair proceedings, and he looked at the prosecutors, telling them that he bore them no ill will. Jerry apologized for the pain that he caused to his family members, talking to them individually. And finally, he told the judge how he’d been working most recently by writing a book and a course that would help people struggle to learn how to pick themselves up to become productive members of society—just as he had done.
Section 10—Sentence Imposed
Finally, after listening to Jerry, the judge addressed Jerry. For 20 minutes, the judge spoke eloquently about what an incredibly honorable life that Jerry had led. He talked about 89 letters that he received and the favorable impression, those letters made upon the judge. Some of those letters testifying to Jerry’s good character came from distinguished public servants, like President Bill Clinton. Others came from people that had formerly been homeless, but then rose to become productive, taxpaying citizens because of Jerry’s leadership. The judge quoted business leaders who wrote how Jerry’s contributions made numerous communities better, and how his good example has made them better citizens.
The judge impressed me when he said, “I think the world needs more people like Jerry Ludergan.”
The judge looked at Jerry with empathy, assuring him that he believed all of the letters were authentic, recognizing the excellent citizenship model Jerry has lived. However, as a federal judge, he said that he was duty-bound to respect the jury’s verdict. And the jury found him guilty of violating laws related to national political campaigns. The judge noted that appellate judges and possibly Supreme Court justices would assess the conviction’s constitutionality, but his role would be to pass sentence.
The judge cited the seven factors of 3553. He acknowledged that he did not need to protect the public from Jerry and that there wasn’t a need for deterrence. In our society, however, when a jury makes a finding that someone broke the law, we respond by taking that person’s liberty. After considering all options, including mitigating and aggravating circumstances, he determined that it would be appropriate to impose a sentence that would be significantly lower than the range advised by the federal sentencing guidelines.
Before asking Jerry to stand for sentencing, the judge quoted verse for a book, “Return of the Prodigal Son,” by Father Henri Nouwen, a Catholic priest. “Before I was hurt, I was beloved,” the judge said, and he told Jerry always to remember that before the sentence would hurt him, remember that he was beloved, and he would still be cherished. Then, he sentenced Jerry, which I summarize as follows:
- 21 months in prison
- Two years of supervised release
- $150,000 fine
- $1,000 special assessment
As a result of the pandemic, the judge stated that he would allow Jerry to remain free for seven months, until early February 2021. Further, the judge indicated that he would consider Jerry’s motions to stay open on the bond pending appeal. At the appropriate time, he would also consider a proposal for compassionate release.
Summary:
My perception of justice suggests that civil proceedings would have been more appropriate. As a cynical observer of our nation’s judicial system, I suspect behind-the-scenes political maneuverings led this matter to the criminal courts. Ambitious prosecutors then brought the criminal charge.
Since we all have to live in the world as it exists, and not as we would like it to be, I’ll say that this was a good outcome. Our team will continue working with Jerry, hoping to help him make the most of the experience.
