Bernie Madoff failed to avoid jail time because he employed a ponzi scheme - a type of fraud that is is (somewhat) easily understood and has a legal precedent o

Bernie Madoff failed to avoid jail time because he employed a ponzi scheme - a type of fraud that is is (somewhat) easily understood and has a legal precedent of being successfully prosecuted. It also has the tendency to blow up spectacularly when it unwinds, and Madoff refused to implicate anyone else in the scheme, making it easier to hand him a harsh sentence. His main accountant and auditor Frank DiPascali, on the other hand, cooperated fully with investigators and testified at the trial of 5 other high level members of the fraud. Although he could have been given over 100 years, he received 1 year home detention and 1 year of supervised release during his final sentencing in May 2015 (6 years after pleading guilty). So it's not really about ripping off rich people, it's more about committing fraud in a very legally and technically opaque manner, passing responsibility down the chain (LIBOR), and never EVER committing it in a manner that can be recorded or traced. This last point is widely believed to be the reason why GS recently fired ~30 new analysts. If they were negligent enough to cheat on a test in a trackable manner (googling answers on company computers), they represented a huge potential liability to the firm.