Monday, June 29, 2009

Madoff: 150 Years at the Cross-Bar Hilton

Bernie Madoff Sentenced to 150 Years for Ponzi Scheme:

A federal judge sentenced Bernard L. Madoff to 150 years in prison on Monday for operating a huge Ponzi scheme that devastated thousands of people, calling his crimes “extraordinarily evil.”

In pronouncing the sentence — the maximum he could have handed down — Judge Denny Chin turned aside Mr. Madoff’s own assertions of remorse and rejected the suggestion from Mr. Madoff’s lawyers that there was a sense of “mob vengeance” surrounding calls for a long prison term.

“Objectively speaking, the fraud here was staggering,” the judge said. “It spanned more than 20 years.”
Before we bust out the champagne and start celebrating the fact that a white-collar criminal finally got his just deserts, let's keep a few facts in mind.

Number one, the scale of his crime was unprecedented, therefore garnering a 150 year sentence isn't all that extraordinary. The fact remains, we have people doing life without parole stretches in this country for stealing a slice of pizza, a bag of chocolate chip cookies, and one pack of double AA batteries. In that sense, 150 years for swiping $50 billion (with a "b") is chump change.

Second, this doesn't herald a new era of white-collar prosecution. No white-collar criminal accused of fleecing investors out of $50 billion to benefit their company would have received a sentence like this. While pinching investors for personal enrichment will be punished, fleecing for the benefit of the company is still largely ignored. To put it another way, had Madoff run his Ponzi scheme as a CEO of a major investment bank on Wall Street, he would have received a bailout rather than a prison sentence.

Third, Madoff will more than likely spend his "golden years" at a minimum-security "Club Fed" institution. Medium security might be an option too, given his notoriety, but if you think he's going to be hustling cigarettes for an inmate named "Tiny" in the maximum-security "Big House," think again.

Fourth, as Madoff ages out, he'll receive the best quality health care the government has to offer, all at no cost (none). Medications, procedures, check-ups, that growing prostate problem...all with no co-pays, premiums or deductibles. Meanwhile, several of the older investors he ripped off will spend their "golden years" going into medical-induced bankruptcy and dying prematurely.

And they say crime doesn't pay.

UPDATE: Frank Rich of the NYT has an excellent 7/5 op-ed on why all the "outrage" over Madoff is a joke, and why the real bank heists on Wall Street which have plunged the economy into the worst recession since the 1980's have largely gone unpunished.

He also mentions a controversial expose by Matt Taibbi in Rolling Stone on Goldman Sachs that is worth your time as well.

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