Last week, a federal judge in Mississippi sentenced a mother of two named Anita McLemore to three years in federal prison for lying on a government application in order to obtain food stamps... The total "cost" of her fraud was $4,367.More at the link.
She has paid the money back. But paying the money back was not enough for federal Judge Henry Wingate... He ultimately gave her three years, saying, "The defendant's criminal record is simply abominable …. She has been the beneficiary of government generosity in state court."
Compare this court decision to the fraud settlements on Wall Street. Like McLemore, fraud defendants like Citigroup, Goldman Sachs, and Deutsche Bank have "been the beneficiary of government generosity." Goldman got $12.9 billion just through the AIG bailout. Citigroup got $45 billion, plus hundreds of billions in government guarantees.
All of these companies have been repeatedly dragged into court for fraud, and not one individual defendant has ever been forced to give back anything like a significant portion of his ill-gotten gains. The closest we've come is in a fraud case involving Citi, in which a pair of executives, Gary Crittenden and Arthur Tildesley, were fined the token amounts of $100,000 and $80,000, respectively, for lying to shareholders about the extent of Citi’s debt. Neither man was forced to admit to intentional fraud. Both got to keep their jobs...
This is the reason why all of these settlements allowing banks to walk away without "admissions of wrongdoing" are particularly insidious. A normal person, once he gets a felony conviction, immediately begins to lose his rights as a citizen. But white-collar criminals of the type we’ve seen in recent years on Wall Street – both the individuals and the corporate "citizens" – do not suffer these ramifications. They commit crimes without real consequence, allowing them to retain access to the full smorgasbord of subsidies and financial welfare programs that, let’s face it, are the source of most of their profits...
30 November 2011
Perhaps it depends on how you define "fraud" ??
From an article by Matt Taibbi at Rolling Stone:
Let's not ignore the judge's indication that this woman had an "abominable" criminal record. This was not an isolated offense.
ReplyDeleteAnonymous,
ReplyDeleteThe point of the author is that bankers have bigger, more abominable records of fraud involving astronomical sums of money. Your concerns are duly noted though..
from cranky old Bob Dylan:
ReplyDelete"Steal a little and they put you in jail,
Steal a lot and they make you king."
Anon, I'll second Steve's comment. The article (and this post) are not about the woman. She's only a reference point for pondering the treatment of the bankers.
ReplyDeleteThe big guns can tie you up in court for years...can have a "talk" with the right people and strings can be pulled...can invoke the danger to the economy if everyone starts getting sued, etc.
ReplyDeleteThe regular folks, many of them just trying to have the more basic things of life, don't have the deep pockets and influence--as well as friends in gov't--to help their case.
And to think that I used to be a hardcore capitalist. Now I see that ALL economic systems breakdown at some point and must be modified or rebooted.
3 years / 4,367 USD = 0.000687 years/USD
ReplyDeleteThat is about 0.25 days per US dollar fraudulently acquired from the government.
Using this rate as a benchmark the wrongdoers at Goldman should spend approximately 8,861,919 years in jail.
Lets be generous and assume that time can be divided evenly amongst all the wrong doers. Assume an upper limit of 1,000 bad guys at Goldman.
According to the "National Corrections Reporting Program," inmates released from prisons in 2000 had served an average of 55% of their total sentence in prison.
So with good behavior they should all be out in the year 6886.
"Perhaps it depends on how you define "fraud" ??"
ReplyDeleteAnd perhaps it depends on how you bend perceptions to make it appear as though the the scales of justice are tilted??
Individuals that commit fraud in the banking industry are normally charged with crimes when caught, just like Gary Foster who was just charged with embezzelling 19 million.
Corporations that are caught defrauding consumers are also charged and fined quite heavily as was Citigroup when it just recently paid a 285 million dollar fine for defrauding/misleading customers.
Thr bailout of course is a seperate issue althogether and currently has nothing to do with fraud, it was just thrown into the article because as everybody knows we hate bankers and bailouts.
Anita McLemore also committed fraud, a fairly serious case of defrauding not just the government, but the people who pay taxes.
The whole premise of this article is fraudulent and was crafted to ensnare the weak willed men and faint hearted women of the age and feed the concept that justice is not equal..
I think that between Bernie Madhof and Gary Foster we can assume that the premise that white collar criminal do not get caught and do not go to jail and pay fines just is not true and as in the case with Ms Mclemore justice was served in all cases.
Cliff: Nowhere do you mention stealing money from the Government by a bank. In the first case someone stole money from a bank, and went to jail. In the second case, Citigroup stole money from it's owners, and was fined. But did anyone from Citigroup go to jail? Did any of them loose their jobs? Are they still working at Citigroup today? That is what this whole point has been about.
ReplyDeleteAnd Anonymous, yes it is true that the Judge said that Anita McLemore had an "abominable" criminal record. But exactly WHAT was on her record that made it so abominable? For all we know, it could have been a whole bunch of minor things that she committed years ago as a kid, but has since reformed and tried to follow the straight and narrow (with the fraud being similar to voting fraud that often happens here in Minnesota where someone convicted of a crime, but not yet refranchised has attempted to vote, or in other words, a crime which she committed unknowingly) since then. I JUST DO NOT KNOW.
Back before the Republicans lost their collective minds over gay marriage and such issues they were actually concerned about punishing Wall Street fraud because the concern was that once the Middle Class came to understand that the game was fixed against them, they'd stop putting their life savings into the system.
ReplyDeleteArthur Anderson (one of the original Big Eight Accounting firms) was put out of business over Enron. The upper management of that firm probably lost half of their net worth (leaving them with more money than I'll ever see, but still). We need to see some big banks go under - if Goldman Sachs or Blackrock goes down, maybe I'll have some faith in the system. Until that happens, the casino is rigged.
@debris
ReplyDeleteGary Foster was jailed, admitted his guilt and faces a possible 30 year sentence. He will more than likely serve 10-15 years in federal prison.
Litigation is pending on Brian Stoker, the Citi employee alleged to be primarily responsible for structuring the CDO that was reponsible for the fraudulent activity. Whether employees under him are going to be charged remains to be seen, as they were under his direction probably not.
So in answer to your question yes indeed Citi did fire these employees, they are facing jail time and fines for their alleged crimes.
Also the 285 million fine recently proposed as a settlement for the fraudulent activities has been rejected by the judge it is now going to trial and the damages more than likely will be more substantial.
Fraud is fraud. I see no one who when caught that has got away with much of anything.
Maybe you can point out just who got away with what crime unpunished?
The article in question alludes that the banking industry is treated different than citizens and that is really not factual.
It does however make for good news.
Never mind the shills, bankers don't get cases brought against them because we have a collusion of elite wealth and government. It's not just a case of willful fraud, but a case of a government that's so bought by Wall St. that they don't want to hurt their own.
ReplyDeleteHere's a good conversation on why not bankers have gone to jail:
We speak on PBS newshour about why no bank executives have gone to jail
Every CEO interview I have ever watched that asks, "why are you directing the company in the way that is unamerican?" has the same response - I can only do what the stockholders let me do. When our jobs are shipped overseas, when benefits dry up, layoffs commence, etc. It is because the stockholders DEMAND it. Who are these stockholders and why are they not also accountable?
ReplyDelete(the enemy is us but I like to wonder how much of all of this may be a subversive strategy by rich anti US investors)