A federal judge in Sacramento rejected prosecutors’ recommendations for jail time Friday and instead put an “obsessed” investor on probation for making thousands of harassing phone calls to regulatory workers in Washington D.C. about Netflix.
U.S. District Judge Garland E. Burrell, Jr., said he wanted to send Kulwant Singh “Ken” Sandhu to jail, but that he was restricted by case precedent in the 9th U.S. Circuit Court of Appeals. Federal prosecutors had asked Burrell to sentence Sandhu to 37 months in prison.
Sandhu, 47, of Tracy, was convicted Jan. 20 on two counts of making an estimated 3,500 phone calls and sending some 350 emails to employees at the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Witnesses said his calls were filled with obscenities and vulgar insults in which he alternately suggested that the employees should be shot, that their bodies should be dragged through the streets or that their mothers should have killed them at birth.
Along with five years probation, Burrell sentenced Sandhu to six months of home detention on electronic monitoring.
Citing a psychologist’s report, the judge said from the bench that Sandhu appears to be responding to treatment and has “shown the ability to control his conduct.”
“If he doesn’t control it,” Burrell said, “he may leave the court no choice but to imprison him.”
Defense attorneys argued that Sandhu became enraged when he discovered in 2010 what he thought was a massive stock fraud on the part of Netflix. They said in court papers that he resorted to the angry phone calls and emails when he didn’t think that regulators seriously considered his complaints. His efforts to contact them became an “obsession that has destroyed his life,” Sandhu’s lawyers said.
Friday’s sentencing concluded a hearing that got underway the previous week. In his May 12 appearance, Sandhu, in addressing the court, launched into a discussion of Sikh history, his studies of civilization, global corporations and his views on what he termed the destruction of the working class. He said he regretted his behavior but that he resorted to it because “I wasn’t listened to by anybody.”
“You’re my only hope,” he told the judge.
Burrell broke up the defendant’s statement by telling him at one point: “I”m concerned about you, Mr. Sandhu.”
When Sandhu was finished, the judge said he was not convinced Sandhu should be incarcerated. He told assistant U.S. attorneys Nirav K. Desai and James R. Conolly to meet and confer with Sandhu’s federal defenders, Mia Crager and Timothy Zindel, to come up with a proposed sentence “that is going to help this man.”
On Friday, Desai still argued for the 37-month prison term, saying that Sandhu is “a rational actor” and that if he gets off without incarceration, “the message to him is that he is free to act with impunity.”
Desai read a letter from two SEC employees in Washington, D.C., who said they suffered from anxiety every time they heard the phone ring, that their bosses missed important calls because of Sandhu and that his incessant calling prevented them from doing their jobs and working with the public.
Crager, however, characterized her client as “an intelligent, educated man” who normally functioned well in society but that he became “delusional” in his market research work and directed his attacks on the SEC and Netflix.
In sentencing Sandhu, Burrell cited the 9th Circuit’s 1992 Cantu case in which a three-judge panel ruled that a defendant’s “distorted reasoning” resulting from significantly reduced mental capacity allowed for a judge to depart from federal sentencing guidelines and impose a lower term.
“It is apparent,” Burrell said from the bench, “that Sandhu suffers from some kind of distorted reasoning.”
Prosecutors said in their court papers that beyond the charged counts, Sandhu either called or emailed employees at the two federal agencies more than 100,000 times going back to 2011, making their work lives miserable.
“If they chose not to answer the phone, the result was more ringing,” the prosecutors wrote. “If they hung up on the defendant, the result was more ringing. If they blocked his number, more ringing. If they transferred his calls to voicemail, the result was more ringing. And if they tried to talk to him to help him or get the ringing to stop, the result was abuse nobody should endure at their job.”
The defense’s sentencing memorandum said that Sandhu’s “mind triggered” once he left, due to health reasons, the successful semi-conductor company that he founded. With more spare time, he “became increasing(ly) obsessed with understanding the economy and spotting signs of weakness,” it said, watching the stock market on four monitors in his living room from 5 a.m. until well into the evening.
“Proving the fraud to others before it took down the American economy became an all-consuming pursuit,” Crager and Zindel said in their papers.
Prosecutors declined to comment after the sentencing.
In email, Zindel said the defense lawyers “are deeply grateful for Judge Burrell’s care in sentencing Mr. Sandhu.”