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> 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 t

> 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.
    - csdreamer7 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 disagree... and frankly, just saying it isn't is a poor answer. > Maybe there wasn't sufficient evidence to win? Once again, your ignorance shows. The Justice Department expressed concern it would threaten the health of the financial system if they were too hard on HSBC at the time so they gave a low fee and ignored another crime. > But this isn't an example of a caught party with a "so low that they don't matter" penalty. I didn't say it was. I was answering your above question about a party that was 'caught' and faced a lower... NO penalty, in this case. Banks are require to abide by a charter that requires good behavior. For evidence of criminal conduct that charter can be revoked and HSBC should have lost their right to operate in the United States. I would certainly call that a fee so low they don't matter penalty. Especially since HSBC is now being accused of money laundering again... this time by Nigeria. All you are giving is negative arguments. Saying things are not, and raising speculation without a basis does not add to the discussion. I am done with this.
      - hueving 8y ago
        No penalty is not the same thing as a lower penalty. You don't go around saying people got a lower penalty that were never actually prosecuted for something. You claim the parent is speculating without basis but the parent is asking for an example where a normal penalty is lower than the profit, because that is an extraordinary claim. If hsbc was able to profit from money laundering while paying they penalty, they would still be doing it. They obviously had no moral barriers to doing it before so why would they stop?
- smadge 8y ago
  “Moreover, the dollar transfers earned HSBC hefty fees. The Senate investigation quoted an HSBC email lamenting how the bank would lose $2.6 billion in revenue from U.S. dollar accounts that it was forced to close because of the Mexico fiasco.” * First, apparently HSBC was making 2.6 billion USD (annual?) revenue from these accounts, and was fined 1.9 billion USD. Second, it is not a certainty that a company engaging in illegal behavior will get caught and fined. The company’s “expected value” function would multiply the expected fines by the chance of being caught. We can only observe the world in which they get caught and perhaps pay a fine larger than what they made. We don’t see the world in which they don’t get fined, which makes the illegal behavior on average profitable. * https://www.npr.org/sections/parallels/2014/03/20/291934724/awash-in-cash-drug-cartels-rely-on-big-banks-to-launder-profits https://www.npr.org/sections/parallels/2014/03/20/291934724/...
  - harryh 8y ago
    1) 2.6B in revenue != 2.6B in profit. HSBC earns maybe 20% margins so we're talking about ~500M in revenue or far less than the fine. 2) Your point about expected value is well taken, but here you are saying something far different from what themagician said and I was objecting to.
    - gpm 8y ago
      You can't just apply the margin like that. You have to estimate the marginal cost of the extra business. For something like banking I'm fairly certain that the marginal cost is tiny. It takes a lot of money to setup all the systems needed for moving money around, but once they are in place the difference between 10b and 11b flowing through them is tiny. As such HSBC probably pocketed most of that revenue.
  - shadowxs76 8y ago
    My take on legal punishment of banks that commit these sorts of frauds: the only method of punishment that strikes me as likely to actually make them feel the pain of their acts is to also pursue indictment of specific executives that knowingly allowed activity that was very evidently shady to continue. Multimillion and multibillion dollar fines levied against giant corporations are ineffective for the very reasons stated above by others, they're proportionally absurd for these kinds of corporate actors and the costs of these fines are mostly an abstraction (no one bank executive or group of them really feels the drain from their own pocket) that most likely get subtly passed onto customers anyhow.

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.
  - csdreamer7 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 disagree... and frankly, just saying it isn't is a poor answer. > Maybe there wasn't sufficient evidence to win? Once again, your ignorance shows. The Justice Department expressed concern it would threaten the health of the financial system if they were too hard on HSBC at the time so they gave a low fee and ignored another crime. > But this isn't an example of a caught party with a "so low that they don't matter" penalty. I didn't say it was. I was answering your above question about a party that was 'caught' and faced a lower... NO penalty, in this case. Banks are require to abide by a charter that requires good behavior. For evidence of criminal conduct that charter can be revoked and HSBC should have lost their right to operate in the United States. I would certainly call that a fee so low they don't matter penalty. Especially since HSBC is now being accused of money laundering again... this time by Nigeria. All you are giving is negative arguments. Saying things are not, and raising speculation without a basis does not add to the discussion. I am done with this.
    - hueving 8y ago
      No penalty is not the same thing as a lower penalty. You don't go around saying people got a lower penalty that were never actually prosecuted for something. You claim the parent is speculating without basis but the parent is asking for an example where a normal penalty is lower than the profit, because that is an extraordinary claim. If hsbc was able to profit from money laundering while paying they penalty, they would still be doing it. They obviously had no moral barriers to doing it before so why would they stop?
smadge 8y ago
“Moreover, the dollar transfers earned HSBC hefty fees. The Senate investigation quoted an HSBC email lamenting how the bank would lose $2.6 billion in revenue from U.S. dollar accounts that it was forced to close because of the Mexico fiasco.” * First, apparently HSBC was making 2.6 billion USD (annual?) revenue from these accounts, and was fined 1.9 billion USD. Second, it is not a certainty that a company engaging in illegal behavior will get caught and fined. The company’s “expected value” function would multiply the expected fines by the chance of being caught. We can only observe the world in which they get caught and perhaps pay a fine larger than what they made. We don’t see the world in which they don’t get fined, which makes the illegal behavior on average profitable. * https://www.npr.org/sections/parallels/2014/03/20/291934724/awash-in-cash-drug-cartels-rely-on-big-banks-to-launder-profits https://www.npr.org/sections/parallels/2014/03/20/291934724/...
- harryh 8y ago
  1) 2.6B in revenue != 2.6B in profit. HSBC earns maybe 20% margins so we're talking about ~500M in revenue or far less than the fine. 2) Your point about expected value is well taken, but here you are saying something far different from what themagician said and I was objecting to.
  - gpm 8y ago
    You can't just apply the margin like that. You have to estimate the marginal cost of the extra business. For something like banking I'm fairly certain that the marginal cost is tiny. It takes a lot of money to setup all the systems needed for moving money around, but once they are in place the difference between 10b and 11b flowing through them is tiny. As such HSBC probably pocketed most of that revenue.
- shadowxs76 8y ago
  My take on legal punishment of banks that commit these sorts of frauds: the only method of punishment that strikes me as likely to actually make them feel the pain of their acts is to also pursue indictment of specific executives that knowingly allowed activity that was very evidently shady to continue. Multimillion and multibillion dollar fines levied against giant corporations are ineffective for the very reasons stated above by others, they're proportionally absurd for these kinds of corporate actors and the costs of these fines are mostly an abstraction (no one bank executive or group of them really feels the drain from their own pocket) that most likely get subtly passed onto customers anyhow.