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It's just a list of previous cases of money laundering and the fines to the entities (mostly banks) involved. Would be nice if for example they mentioned the o

by gyaniv 8y ago

It's just a list of previous cases of money laundering and the fines to the entities (mostly banks) involved. Would be nice if for example they mentioned the overall impact of the illegal transactions on the entire systems, or maybe changes or actions that those banks made (other then paying fines). Basically, I feel like this misses either (or both) the overall, total impact of 'dirty money', the global scale of it, it's effect, etc. (because only the bigger cases that were caught were mentioned, it's interesting to see how big the phenomenal). And also I would like to understand what is being done to stop or prevent other and future instances.

DyslexicAtheist 8y ago
thanks for saving me the click.
candiodari 8y ago
It makes the point that governments "punish" these crimes with the velvet glove on. None of those fines are anywhere close to the point they'd endanger even one yearly profit of these institutions. Now try being suspected of tax cheating as a smaller company and see how governments punish that (not "convicted" mind you, "suspected", meaning you likely did nothing wrong, and even if you did there's a decent chance it's an accident/lack of knowledge/... rather than outright fraud). Let's see government limit themselves to not endangering even one year's profitability then.
- sokoloff 8y ago
  I think it's unreasonable to consider fining a bank based on the yearly profits of the bank. If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits. If a small bank does $100M of tainted transactions and a large bank does the same, they should be fined the same, IMO. Your point about the small company is not an analog in my opinion. If you have $500K in profits and a tax cheating penalty of $1MM, it does not follow that the precedent is that tax penalties are 2x annual profits, but rather that tax penalties are proportionate to the tax cheating. If another company has a tax fraud of 50x the scope and 1000x the profits, their tax fraud fine should be 50x yours, not 1000x yours.
  - magpi3 8y ago
    > If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits If the penalty is meant to be a deterrent, then it should hurt. Otherwise it will not be a deterrent. You have to consider the bank's annual profit if you want it to hurt.
    - sokoloff 8y ago
      I believe that the annual profit on that tainted line of business is typically proportional to the size of that line of business, not to the sum of unrelated lines of business and that fines based on the size of fraud/error are appropriate deterrents. Imagine if See's Candy has a product recall due to malfeasance or NetJets has a crash based on pilot error. Should any penalties be based on the facts and circumstances of the situation or on the entire profits of Berkshire Hathaway?
    - leetcrew 8y ago
      depends on your philosophy regarding fines/punishment. personally I think punishments, particularly fines, should be proportional to the damage done to society, not jacked up as high as you feel is necessary to discourage the behavior. I don't think a large bank that does $50mm in illegal transactions did any more harm than a small one that did the same volume. also, as we see in criminal law, setting huge penalties doesn't work very well if you can only get a few convictions. it just turns into a game of hot potato where everyone still does the illegal thing to stay competitive and some unlucky firm occasionally gets stuck holding the bag. a free society should strive for reasonable penalties that are consistently enforced.
      - sokoloff 8y ago
        I would say that deterrence is a valid goal. Imagine tax fraud. If the revenue office estimates that approximately 10% of tax fraud is caught, then the penalty for tax fraud should be at least 10x the amount of the fraud. Anything less than that makes it +EV to cheat. (Obviously, it's not perfect and relies on estimations, but I do think that mathematically sound deterrence is desirable.) This of course is still proportional to the fraud (and the societal damage), not to the overall revenues or profits of the taxpayer in question.
pm24601 8y ago
> And also I would like to understand what is being done to stop or prevent other and future instances. Nothing.
godzillabrennus 8y ago
Drug money saved the banking system: https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...

by gyaniv 8y ago

DyslexicAtheist 8y ago

thanks for saving me the click.

candiodari 8y ago

It makes the point that governments "punish" these crimes with the velvet glove on. None of those fines are anywhere close to the point they'd endanger even one yearly profit of these institutions. Now try being suspected of tax cheating as a smaller company and see how governments punish that (not "convicted" mind you, "suspected", meaning you likely did nothing wrong, and even if you did there's a decent chance it's an accident/lack of knowledge/... rather than outright fraud). Let's see government limit themselves to not endangering even one year's profitability then.

sokoloff 8y ago
I think it's unreasonable to consider fining a bank based on the yearly profits of the bank. If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits. If a small bank does $100M of tainted transactions and a large bank does the same, they should be fined the same, IMO. Your point about the small company is not an analog in my opinion. If you have $500K in profits and a tax cheating penalty of $1MM, it does not follow that the precedent is that tax penalties are 2x annual profits, but rather that tax penalties are proportionate to the tax cheating. If another company has a tax fraud of 50x the scope and 1000x the profits, their tax fraud fine should be 50x yours, not 1000x yours.
- magpi3 8y ago
  > If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits If the penalty is meant to be a deterrent, then it should hurt. Otherwise it will not be a deterrent. You have to consider the bank's annual profit if you want it to hurt.
  - sokoloff 8y ago
    I believe that the annual profit on that tainted line of business is typically proportional to the size of that line of business, not to the sum of unrelated lines of business and that fines based on the size of fraud/error are appropriate deterrents. Imagine if See's Candy has a product recall due to malfeasance or NetJets has a crash based on pilot error. Should any penalties be based on the facts and circumstances of the situation or on the entire profits of Berkshire Hathaway?
  - leetcrew 8y ago
    depends on your philosophy regarding fines/punishment. personally I think punishments, particularly fines, should be proportional to the damage done to society, not jacked up as high as you feel is necessary to discourage the behavior. I don't think a large bank that does $50mm in illegal transactions did any more harm than a small one that did the same volume. also, as we see in criminal law, setting huge penalties doesn't work very well if you can only get a few convictions. it just turns into a game of hot potato where everyone still does the illegal thing to stay competitive and some unlucky firm occasionally gets stuck holding the bag. a free society should strive for reasonable penalties that are consistently enforced.
    - sokoloff 8y ago
      I would say that deterrence is a valid goal. Imagine tax fraud. If the revenue office estimates that approximately 10% of tax fraud is caught, then the penalty for tax fraud should be at least 10x the amount of the fraud. Anything less than that makes it +EV to cheat. (Obviously, it's not perfect and relies on estimations, but I do think that mathematically sound deterrence is desirable.) This of course is still proportional to the fraud (and the societal damage), not to the overall revenues or profits of the taxpayer in question.

pm24601 8y ago

> And also I would like to understand what is being done to stop or prevent other and future instances. Nothing.

godzillabrennus 8y ago

Drug money saved the banking system: https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...