Tuesday, June 30, 2009

150 Years For Madoff

Is a crime a crime, or the severity dependent on the amount that was "fraudulently obtained" by the perpetrator? Court rulings have maintained that the sum of money lost is a primary factor. Another factor has to be how many people were defrauded or affected? If Madoff had bilked the US Treasury for the same amount, somehow I don't think the media would make such a big hoo-hah over the case. Collective mob anger (which is understandable and justified) do sway the severity of the crime. So, if you are going to 'steal money', steal from one party only, or at least try to minimise the number of affected parties.

Sentenced to 150 years in prison on Monday, Bernard L. Madoff, the convicted Ponzi schemer, got one of the nation’s most severe sentences ever handed out in a white-collar crime case.

In recent years, some of the most notorious financial miscreants have received sentences of about 15 to 30 years. Below, a graphical look at of some of the longest prison terms for financial fraud, including sentences for former executives at WorldCom, Enron and the hedge fund Bayou Group.

At the relatively low end of the spectrum is Phillip R. Bennett who was 59 when he was sentenced to 16 years in prison for his role in the financial cover-up that eventually led to the collapse of the commodities brokerage Refco and about $1.5 billion in investor losses. Mr. Bennett, who had been Refco’s chief executive, previously pleaded guilty to 20 crimes, including conspiracy to commit securities fraud.

At the high end is Lance K. Poulsen, the founder of National Century Financial Enterprises, who in March received a 30 year prison sentence — one of the nation’s harshest for a white-collar crime. Mr. Poulsen was convicted of leading a $2.9 billion fraud that brought down National Century and triggered the bankruptcy filings of about 275 health care institutions.

“Mr. Poulsen is an architect of a fraud of such magnitude that it would make sophisticated financial analysts shudder,” the judge said in handing down the sentence.

Bar chart

Source: The New York Times; Google Charts

p/s photos: Yu Yamada


ronnie said...

Mr Madoff should have operated his fund/Ponzi scheme from one of the many countries in Asia. It would have taken ten years to get to court and he would most probably have been acquitted. Or at worse been fined.

A huge incentive for hedge funds/Ponzi schemes to relocate to Asia ?

solomon said...

A crime is committed when there is an ill intention to do so. To me, even one cent theft is evil enough, it is just that the criminal may not possess the good enough skill to defraud more or the greed level is not there yet.

No matter how many years one sentence Madoff, I think the victims only wants their money back. But it is too late now. Moral of story learn the mistakes as suggested in this blog.

Ooi Beng Hooi said...

even jail term of 1500 years is not enough for this kind of crook, considering the pain, shock, frustration, mental torture and monetary loss the victims have been going through...