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
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
To read the full opinion, click here.
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