Ex-bond trader wants home stay as U.S. said to urge prison

Former Jefferies & Co. Managing Director Jesse Litvak says he should be spared prison when he is sentenced later this month following his conviction of a single count of fraud — a crime the government says is worth jail time.

A federal jury in Connecticut found Litvak guilty in January of defrauding customers on trades of mortgage-backed securities, but only on one of 10 criminal counts. The circumstances surrounding sentencing have changed "dramatically," his lawyers said in court filings, seeking a term of eight months of home confinement and a $250,000 fine.

Prosecutors recommended the same calculation under federal sentencing guidelines for Litvak as they did before his previous sentence — nine to 11 years in prison — and seem "poised" to ask for a longer sentence, defense lawyers said. The prosecution's sentencing recommendation was filed under seal. Sentencing is scheduled for April 26 in New Haven.

Jesse Litvak
Jesse Litvak. Photographer: Douglas Healey/Bloomberg

Thomas Carson, a spokesman for Connecticut U.S. Attorney Deirdre Daly, declined to comment.

Litvak was originally found guilty of 15 counts of securities fraud in 2014 and sentenced to two years in prison and to pay a $1.75 million fine. That conviction was thrown out on appeal and sent back for a second trial. In requesting home confinement, his lawyers said the victim of the crime of which Litvak was convicted suffered no monetary loss.

Litvak's lawyers also noted that the government has resolved matters with two other mortgage-bond traders who are alleged to have engaged in the same conduct with fines through U.S. Securities and Exchange Commission administrative orders. The government decided not to prosecute two other former Jefferies employees who also lied in negotiations, both of whom faced only minor sanctions.

Litvak has moved to Florida with his wife and is the primary caregiver for his two children, his attorneys said.

"A term that exceeds what the court imposed the last time would not only be unreasonable, but unconstitutional as well," his attorneys said. "At bottom, the government is attempting to compensate for its mostly unsuccessful prosecution of Mr. Litvak by urging sharp sentencing enhancements based on acquitted and uncharged conduct."

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