7 ms·

You'd have to completely reframe the penalty for crimes to be percentage based instead of fixed amounts. Even when caught the penalties are often so low that th

You'd have to completely reframe the penalty for crimes to be percentage based instead of fixed amounts. Even when caught the penalties are often so low that they don't matter, so white collar criminals go right back to it. When you can routinely make $10 million doing something a $1 million fine the one time you get caught just isn't a big deal. The cost-benefit analysis almost always favors the criminal for white collar crimes (or any non-violent crime, really) when you have money. If I had $100m+ I wouldn't really pay attention to the law either.

harryh 8y ago
What is an actual example where you can make more money committing a crime than you would be forced to pay back if you are caught and convicted? I don't think your assertion is true.
- goliatone 8y ago
  Maybe if you have money you get caught but not convicted? Thinking about banks laundering money for drug cartels
- Retric 8y ago
  It's not about criminal convictions. In theory it's just a civil case with a criminal case to follow. Which is why SEC fines are often less than the net befit. But, the actual number of criminal cases is rather low. EX: "In June 2009, the SEC sued Angelo Mozilo, former CEO of mortgage lender Countrywide Financial, and two other former officers, charging that they misled investors about the quality of Countrywide's loans while knowing the company was fueling its growth by letting its underwriting guidelines deteriorate and originating a growing number of risky subprime loans. In October 2010, the SEC settled the lawsuit and Mozilo was required to pay a fraction of the $521.5 million he had earned, just $67.5 million in penalties" https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_actions_(2009%E2%80%9312) https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_...
  - deleted 8y ago
    [deleted]
  - harryh 8y ago
    It's not at all clear that all of Mozilo's earnings came from fraudulent activity. In fact, it's almost certainly true that this is not the case.
    - acidbaseextract 8y ago
      The issue is that Mozilo's behavior resulted in personal gains against extreme public losses. It's in our best interest as a society to deter such behavior, while enabling whatever legitimate business Countrywide conducted. How do we best do that? The public at large wins — Mozilo should win, the public at large loses — Mozilo should lose. I think GP's point is that a $60M fine (against $520M in earnings) is not a an effective deterrent against such antisocial behavior.
      - harryh 8y ago
        Maybe the fines are too low. I could be persuaded of that. I'm just saying that they aren't, as themagician asserted, lower than the actual gains from the frauds in question.
        Retric 8y ago
        I agree all is a bit much but, it is more than 13% including penalties, especially when you include the effect the 'boosted' earnings had on the stock price.
    - Latteland 8y ago
      But the general thesis that people are making so much money from their crimes that they don't fear criminal penalties seems to hold. like the 2.x billion in profits lost from the 1.9 billion fine?
    - themagician 8y ago
      I don’t give a shit where his earnings came from. This is a man who should be utterly bankrupt and forced to pay restitution for the test of his life.
- csdreamer7 8y ago
  > What is an actual example where you can make more money committing a crime than you would be forced to pay back if you are caught and convicted? > I don't think your assertion is true. I think you just haven't bothered to look. First, our prosecutors arn't convicting, they are settling. HSBC paid 5 weeks of yearly profit for cartel money laundering. https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21 https://www.marketwatch.com/story/netflix-documentary-re-exa... The justice department also called this a fair punishment for an unrelated money laundering crime for Saudi nationals funding of terrorism. They didn't even bother to bring charges. (Which is a perfect answer to your question.)
  - harryh 8y ago
    "of yearly profit" is not the relevant comparison. What is relevant is the amount of money they made from the cartel money laundering. I am preeeeety confident that HSBC didn't make ~10% of it's profits from these transactions.
    - csdreamer7 8y ago
      Please read the second paragraph again. Where they didn't even bring charges for an unrelated crime of financing terrorism that they found out later. That was my answer to your question.
      - harryh 8y ago
        Well that again isn't an example of someone being caught and receiving a penalty lower than the gain from the crime. I don't know why the justice department didn't pursue charges here. Maybe HSBC wasn't guilty? Maybe there wasn't sufficient evidence to win? Who knows. But this isn't an example of a caught party with a "so low that they don't matter" penalty.
        shadowxs76 8y ago
        I would strongly suggest watching the Netflix documentary "Dirty Money" series episode on the HSBC/Mexican cartel fiasco. It goes into many of the details of how it went down and how it was discovered.
- nostrebored 8y ago
  There was a case only last year involving manipulations of cattle futures. The firm made the decision that the cost of being caught was less than the potential penalty, and they were right.
- paulgrant999 8y ago
  You would be in error. Severe, error. But I'm not going to list a howto ;)
taormina 8y ago
Yes, crimes that are only punished by a fine are "illegal only for the poor".
DrJokepu 8y ago
A percentage of what though? A percentage of unlawfully obtained income or a percentage of personal wealth, whether or not it’s connected to any unlawful activities?
- themagician 8y ago
  Total assets. If all you lose is the income from illegal activity and a small fine it’s not much of a penalty now is it? The criminal justice system needs to be as vicious against criminals as collection agencies are against poor people. I really have no problem seizing absolutely everything from somone who manipulates markets or defrauds investors. In fact, step it up. Seize everything and stick them with a lifetime of debt that can’t be discharged.
  - DrJokepu 8y ago
    In that case, regardless of the merits of the idea, it’s constitutionally rather problematic in the United States, as the Eighth Amendment prohibits imposing excessive fines.

harryh 8y ago

What is an actual example where you can make more money committing a crime than you would be forced to pay back if you are caught and convicted? I don't think your assertion is true.

goliatone 8y ago
Maybe if you have money you get caught but not convicted? Thinking about banks laundering money for drug cartels
Retric 8y ago
It's not about criminal convictions. In theory it's just a civil case with a criminal case to follow. Which is why SEC fines are often less than the net befit. But, the actual number of criminal cases is rather low. EX: "In June 2009, the SEC sued Angelo Mozilo, former CEO of mortgage lender Countrywide Financial, and two other former officers, charging that they misled investors about the quality of Countrywide's loans while knowing the company was fueling its growth by letting its underwriting guidelines deteriorate and originating a growing number of risky subprime loans. In October 2010, the SEC settled the lawsuit and Mozilo was required to pay a fraction of the $521.5 million he had earned, just $67.5 million in penalties" https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_actions_(2009%E2%80%9312) https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_...
- deleted 8y ago
  [deleted]
- harryh 8y ago
  It's not at all clear that all of Mozilo's earnings came from fraudulent activity. In fact, it's almost certainly true that this is not the case.
  - acidbaseextract 8y ago
    The issue is that Mozilo's behavior resulted in personal gains against extreme public losses. It's in our best interest as a society to deter such behavior, while enabling whatever legitimate business Countrywide conducted. How do we best do that? The public at large wins — Mozilo should win, the public at large loses — Mozilo should lose. I think GP's point is that a $60M fine (against $520M in earnings) is not a an effective deterrent against such antisocial behavior.
    - harryh 8y ago
      Maybe the fines are too low. I could be persuaded of that. I'm just saying that they aren't, as themagician asserted, lower than the actual gains from the frauds in question.
      - Retric 8y ago
        I agree all is a bit much but, it is more than 13% including penalties, especially when you include the effect the 'boosted' earnings had on the stock price.
  - Latteland 8y ago
    But the general thesis that people are making so much money from their crimes that they don't fear criminal penalties seems to hold. like the 2.x billion in profits lost from the 1.9 billion fine?
  - themagician 8y ago
    I don’t give a shit where his earnings came from. This is a man who should be utterly bankrupt and forced to pay restitution for the test of his life.
csdreamer7 8y ago
> What is an actual example where you can make more money committing a crime than you would be forced to pay back if you are caught and convicted? > I don't think your assertion is true. I think you just haven't bothered to look. First, our prosecutors arn't convicting, they are settling. HSBC paid 5 weeks of yearly profit for cartel money laundering. https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21 https://www.marketwatch.com/story/netflix-documentary-re-exa... The justice department also called this a fair punishment for an unrelated money laundering crime for Saudi nationals funding of terrorism. They didn't even bother to bring charges. (Which is a perfect answer to your question.)
- harryh 8y ago
  "of yearly profit" is not the relevant comparison. What is relevant is the amount of money they made from the cartel money laundering. I am preeeeety confident that HSBC didn't make ~10% of it's profits from these transactions.
  - csdreamer7 8y ago
    Please read the second paragraph again. Where they didn't even bring charges for an unrelated crime of financing terrorism that they found out later. That was my answer to your question.
    - harryh 8y ago
      Well that again isn't an example of someone being caught and receiving a penalty lower than the gain from the crime. I don't know why the justice department didn't pursue charges here. Maybe HSBC wasn't guilty? Maybe there wasn't sufficient evidence to win? Who knows. But this isn't an example of a caught party with a "so low that they don't matter" penalty.
      - shadowxs76 8y ago
        I would strongly suggest watching the Netflix documentary "Dirty Money" series episode on the HSBC/Mexican cartel fiasco. It goes into many of the details of how it went down and how it was discovered.
nostrebored 8y ago
There was a case only last year involving manipulations of cattle futures. The firm made the decision that the cost of being caught was less than the potential penalty, and they were right.
paulgrant999 8y ago
You would be in error. Severe, error. But I'm not going to list a howto ;)

taormina 8y ago

Yes, crimes that are only punished by a fine are "illegal only for the poor".

DrJokepu 8y ago

A percentage of what though? A percentage of unlawfully obtained income or a percentage of personal wealth, whether or not it’s connected to any unlawful activities?

themagician 8y ago
Total assets. If all you lose is the income from illegal activity and a small fine it’s not much of a penalty now is it? The criminal justice system needs to be as vicious against criminals as collection agencies are against poor people. I really have no problem seizing absolutely everything from somone who manipulates markets or defrauds investors. In fact, step it up. Seize everything and stick them with a lifetime of debt that can’t be discharged.
- DrJokepu 8y ago
  In that case, regardless of the merits of the idea, it’s constitutionally rather problematic in the United States, as the Eighth Amendment prohibits imposing excessive fines.