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If you do the crime, you do the time

If you do the crime, you do the time

How is a prison sentence determined?

George Pillari
October 02, 2025

Let’s talk about white-collar crime and punishment. According to the FBI:

White-collar crime is generally non-violent in nature and includes public corruption, health care fraud, mortgage fraud, securities fraud, and money laundering, to name a few.

If you steal money, you are a white-collar criminal. When you are caught, tried, and convicted, you are sent to prison. In the federal penal system, the length of a sentence is determined by, of all things, an algorithm.

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Federal sentencing guidelines are driven by two primary factors: the severity of the crime and the defendant’s criminal history.

For all crimes, there are 43 levels of offenses. An example of a level 43 offense is premeditated murder, and a lowest-level offense would be something like document fraud.

To calculate a sentence, the judge starts with the base level of the offense. For white-collar crimes (which are what we write about), the base level is determined by the amount stolen by the defendant or lost by the victims. Say a bookkeeper embezzled $75,000 from his employer. This would be a base level of 7 for fraud, which would probably be something like three or four months in prison. But that’s not how it works.

There are aggravating and mitigating conditions that move the level up or down. The level 7 embezzlement gets bumped to a level 13 since the amount was $40,000 to $95,000 and gets another bump of +2 to level 15 since the defendant abused a position of trust.

A level 15 offense is worth 24 months in prison, but if the defendant accepted responsibility and had no criminal history, the score is brought down to 12 and sentencing guidelines indicate 10 to 16 months in prison.

Sentences start with the Base Level Offense (eg, fraud). Levels move up or down based on aggravating or mitigating factors (eg, was a gun used?) and the defendant’s criminal history.

The sentencing of Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, provides a good example of how federal sentencing guidelines work for white-collar fraud. Bankman-Fried was sentenced in March 2024.

The Guideline Calculation

Base Offense Level: Starting point for fraud: Level 7

Loss Amount Enhancement: The loss calculation was staggering. The judge in the case told the court that the losses incurred "far exceeded" the top tier of offense. The losses were estimated at over $8 billion, which under the loss table resulted in the maximum bump of +30 levels.

Running calculation: 7 (base) + 30 (loss) = 37

Victim Enhancement: FTX had thousands of customers and investors affected by the fraud, easily qualifying for the maximum +6 level enhancement for 250 or more victims.

Running calculation: 37 + 6 = 43

Sophisticated Means: The fraud involved complex financial structures, cryptocurrency transactions, offshore entities, and elaborate concealment methods, adding +2 levels.

Running calculation: 43 + 2 = 45

Leadership Role: As founder and CEO orchestrating the entire scheme, Bankman-Fried received a +4 level enhancement for organizing and leading the criminal activity.

Running calculation: 45 + 4 = 49

Additional Enhancements: There were additional enhancements for obstruction of justice (witness tampering was alleged) and other aggravating factors. The calculated adjusted offense level was 56 (off the charts, literally and maybe some kind of record?), which was reduced to the highest total offense level of 43.

Criminal History: Bankman-Fried had no prior criminal record, which gave the judge room to reduce the sentence.

Guideline Range: For Offense Level 43 for a convict with no criminal history, the guideline range is life imprisonment. Ouch.

Sam Bankman-Fried

No Acceptance of Responsibility

Bankman-Fried did not receive the standard -3 level reduction for acceptance of responsibility because he:

Maintained his innocence despite conviction
Testified at trial (unsuccessfully)
Did not plead guilty
Showed no remorse

Had he accepted responsibility, and not been so stubborn, his level would have dropped to 40, which still carries a guideline range of 24 to 30 years.

The Actual Sentence

The judge sentenced Bankman-Fried to 25 years in federal prison, which was a significant downward variance from the life sentence recommended by the guidelines. The judge exercised discretion to impose a lower sentence while still acknowledging the severity of the crime.

Why the Variance? The judge likely considered:

Bankman-Fried's age (32) and lack of criminal history
His cooperation on some matters
Arguments about actual vs. intended loss (defense argued customers could eventually be made whole, and believe it or not, they were)
The need for deterrence balanced against proportionality

What Defense Requested: Bankman-Fried's defense team asked the court for a sentence of 5.25 to 6.5 years.

What Prosecutors Requested: Prosecutors wanted to throw the book at him and sought 40 to 50 years, arguing for a sentence closer to reflect the unprecedented scale of the fraud and the need for deterrence in the cryptocurrency industry.

Key Factors That Drove the Sentence

Loss Amount: The $8+ billion loss was the single largest factor, automatically putting the case at the highest possible guideline levels
Number of Victims: Tens of thousands of FTX customers and investors lost money, triggering maximum victim enhancements
Breach of Trust: Bankman-Fried was entrusted with billions in customer funds and violated that trust systematically. This is a big aggravating factor for a judge.
Sophistication: The scheme involved complex corporate structures, cryptocurrency technology, and international operations. The deceptions were premeditated, another thing that pisses off the judge.
Lack of Remorse: His testimony at trial and post-conviction statements showed no acceptance of responsibility.

Key Takeaways

The Bankman-Fried case demonstrates how white-collar sentencing guidelines create exponential increases in sentencing:
- A $1 million fraud might result in 5 to 7 years
- A $10 million fraud might result in 10 to 15 years
- An $8 billion fraud hits the guideline ceiling and recommends life imprisonment
In the final analysis, the judge may have done the right thing in showing some leniency to Bankman-Fried. Three years after the FTX collapse, customers are expected to recover more than 80% of their funds, with many receiving 100%. While Bankman-Fried may not have been a responsible CEO, he did have an eye for value. His investments in AI company Anthropic, as well as SpaceX, were sold and yielded more than a billion dollars of recoveries to his former customers.
The sentencing guidelines are especially harsh for damage done to a large number of victims. Never think there is a “victimless” crime.” Some prosecutor will seek to prove otherwise. And don’t forget those aggravating conditions that put judges in bad moods.

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The computers on the Apollo 11 trip to the moon had less power than today’s smartphones.

If you do the crime, you do the time

How is a prison sentence determined?

Key Takeaways

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