It's a Golden Age for White Collar Crime

Sen. Amy Klobuchar, much like Kamala Harris before her, is guilty of mercilessly prosecuting poor people while turning a blind eye to the crimes of the wealthy.
Harris and Klobuchar were just the tip of the iceberg.

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OVER THE LAST TWO YEARS, nearly every institution of American life has taken on the unmistakable stench of moral rot. Corporate behemoths like Boeing and Wells Fargo have traded blue-chip credibility for white-collar callousness. Elite universities are selling admission spots to the highest Hollywood bidder. Silicon Valley unicorns have revealed themselves as long cons (Theranos), venture-capital cremation devices (Uber, WeWork) or straightforward comic book supervillains (Facebook). Every week unearths a cabinet-level political scandal that would have defined any other presidency. From the blackouts in California to the bloated bonuses on Wall Street to the entire biography of Jeffrey Epstein, it is impossible to look around the country and not get the feeling that elites are slowly looting it.

And why wouldn’t they? The criminal justice system has given up all pretense that the crimes of the wealthy are worth taking seriously. In January 2019, white-collar prosecutions fell to their lowest level since researchers started tracking them in 1998. Even within the dwindling number of prosecutions, most are cases against low-level con artists and small-fry financial schemes. Since 2015, criminal penalties levied by the Justice Department have fallen from $3.6 billion to roughly $110 million. Illicit profits seized by the Securities and Exchange Commission have reportedly dropped by more than half. In 2018, a year when nearly 19,000 people were sentenced in federal court for drug crimes alone, prosecutors convicted just 37 corporate criminals who worked at firms with more than 50 employees.
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Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004. That’s roughly two decades’ worth of street crime every single year.

While the cost of white collar crime is massively greater than street crime, justice policy is going in the opposite direction.

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PriceRip's picture

          These sort of abuses were dealt with in the past but how those that are supposed to regulate have joined the robber barons.

          What is in everybody's interest conflicts with those that care only about their own self interest. Most of those that run for the various offices do so for very unethical reasons.

          I once tried to explain the bit-coin fiasco to an individual. It rapidly became clear she was not interested in understanding, preferring to enjoy the "fruits of her labor".

RIP

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"I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant."
Robert J. McCloskey, U.S. State Department spokesman. From a press briefing during the Vietnam war.

@PriceRip
Good thing Trump drained the swamp

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PriceRip's picture

@gjohnsit

          I have watched every step of the way from about 1968. At every opportunity people of a certain mindset have told me that I didn't know what I was talking about.

          So, now, finally, around those people I just keep my mouth shut. I really want to survive long enough to tell those people to "go to hell" as they lose their grip at the edge of the financial abyss. The best revenge is to simply outlive the bastards.

RIP

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10 users have voted.

"I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant."
Robert J. McCloskey, U.S. State Department spokesman. From a press briefing during the Vietnam war.

@gjohnsit
we don't know if the level of white collar crime has increased.

Prosecutions were up during Obama's tenure because of all the criminality in the prior decade, much of it revealed by the market crash, but few resulted in more than a fine and slap on the wrist.

As for Trump draining the swamp, he's unlocking the prison cell doors. Milken kept his ill-gotten fortune and only did a short stint in prison (secured compassionate release -- what a faker), and now he gets a pardon.

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@Marie

Without prosecutions we don't know if the level of white collar crime has increased.

Surely Wall Street has learned their lessons. Otherwise there would be prosecutions, amirite?

Or we can look at it realistically and say that laws aren't being enforced upon the wealthy, and the wealthy are aware of this fact.

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@gjohnsit
"tough on crime" bills? NYC is a good example because those Republicans claimed that crime was increasing because enforcement was too lax. Then with significant increases in prosecution, Guiliani and Bloomberg took credit for reducing crime. The truth was that crime wasn't increasing, was actually decreasing, when they initiated their draconian get tough policies.

Prosecutions of white collar crime has always been lax, but before the "Reagan Revolution," there were more regulations and regulators; so, the chances of getting caught were higher and when caught the penalties were severe. We know that it increased significantly during the Roaring 80s because financial collapses revealed at least some of them. Even then many of the perpetrators paid little to no price; and a few like Milken, despite being caught within a decade of his criminal activities, imprisoned and incarcerated, ended up as a billionaire. Madoff was perpetrating his fraud throughout the eighties, nineties, and up until the '08 market collapse.

Economic booms, reduced regulation, new technologies, and innovative repackaging of old scams facilitate large and more white collar theft. The "cops" generally don't appear until long after the money is gone. Economic busts and the crooks scurry away as the "cops" try to nab a few. Thus it likely decreased in 2009 and began to increase in tandem with whenever the economic boom began.

Those New Deal financial regulation designers (and those that preceded them in NYC a few years earlier) understood all the components to financial fraud (it never really changes) and that only under very strict regulation could it be limited. Perhaps with the next bust we'll get real again on this matter.

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street thug will rob you of your wallet. The folks in the $2,000 dollar suits will steal your life.

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27 users have voted.

I had business in court for a few days. I sat in the peanut gallery watching "justice" in action. I was totally revolted. 80% of the cases were poor people being sued by the richest entities - banks, corporations, insurance companies, and rental owners. In most cases the defendant didn't bother to show. The process is so esoteric and expensive that most poor people are just depressed about it. That's an automatic judgement against you. Some showed attempting to defend themselves in court. That never worked. The goal of the oligarchs is to garnish wages of as many poor people as possible. Yeah, they will just have to go back and do it again when the person changes jobs. There were a few lawyers in town who specialized in this and aggregate cases from multiple clients. This is certainly one of the most brutal, ugly faces of capitalism. The court system always favors the plaintiff. If you can't pay or don't have a wage that they can garnish then the judge will inform you that your debt will accrue at 12% interest (that's a doubling time of 6 years, 16x in 24 years) for the rest of your life and if you ever have an income you will have to pay the judgement. This is not justice, this is class oppression. So get this- we pay for the court system through our tax dollars, which is then used by the oligarchs to oppress the poor. That's socialism for the rich, despotism for the rest of us.

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16 users have voted.

Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

was that "some of it wasn't illegal" and the person in charge of prosecuting their acknowledged crimes, Eric Holder,created new legal theories in order to protect the guilty parties.

Eric Holder, Wall Street Double Agent, Comes in From the Cold

Barack Obama’s former top cop cashes in after six years of letting banks run wild

"Holder denied there was anything weird about returning to one of Wall Street’s favorite defense firms after six years of letting one banker after another skate on monstrous cases of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses."

"Here’s a man who just spent six years handing out soft-touch settlements to practically every Too Big to Fail bank in the world. Now he returns to a firm that represents many of those same companies: Morgan Stanley, Wells Fargo, Chase, Bank of America and Citigroup, to name a few.

Collectively, the decisions he made while in office saved those firms a sum that is impossible to calculate with exactitude. But even going by the massive rises in share price observed after he handed out these deals, his service was certainly worth many billions of dollars to Wall Street.

In the article Matt Taibbi says " but he was a revolutionary. He institutionalized a radical dualistic approach to criminal justice, essentially creating a system of indulgences wherein the world’s richest companies paid cash for their sins and escaped the sterner punishments the law dictated. (emphasis mine)

Taibbi names off "five pillars of the Holder revolution:" and I picked the following examples to highlight but the entire list is damning.

Two: Holder famously invented a concept called “collateral consequences,” under which the state could pursue non-criminal alternatives for companies if they believed prosecuting them might result in too much “collateral” damage. Britain’s HSBC bank, which admitted to massive money laundering violations, and the , Swiss bank UBSwhich was caught manipulating the Libor interest rate benchmark, were examples of firms that escaped vigorous prosecution because Holder and his lackeys were, ostensibly anyway, concerned about market-altering consequences.

Significantly, both banks were later caught up in even more serious scandals, leading to criticism that stiffer punishments the first time around might have prevented future damage. Holder’s successor Loretta Lynch was even forced to rip up Holder’s UBS deal for being insufficiently punitive. It’s worth noting that Holder, before he became attorney general, represented UBS at Covington & Burling."

Three: Holder also pioneered the extrajudicial settlement, striking huge deals with companies in which judges did not sign off on the agreements. The arrangement prevented pesky judges like the irksome Jed Rakoff (who voided a pair of settlements he felt were inadequate) from protesting lenient justice.

This essentially institutionalized the backroom deal. Everything was done in secret, and there was no longer any opportunity for judges or anyone else to check the power of the executive branch to hand out financial indulgences." (my emphasis)

In the interest of keeping this shorter I want to pick a few parts from #4 (all highlights are mine)

Four: "....Anyone who even tries to claim that none of the banks actually did anything illegal should be directed to the HSBC settlement of December 2012. In this deferred prosecution agreement, Europe’s largest bank paid $1.92 billion to settle their responsibility for violations of the Bank Secrecy Act and other laws.

This is from a description of HSBC’s crimes by Holder’s Justice Department:

“As a result of HSBC Bank USA’s AML failures, at least $881 million in drug trafficking proceeds – including proceeds of drug trafficking by the Sinaloa Cartel in Mexico…were laundered through HSBC Bank USA.”

You might remember the Sinaloa cartel for their ISIS-style, unforgettably upsetting torture videos. HSBC washed their cash. They even created special teller windows to make their deposits easier. This is admitted, not alleged.

But Holder went out of his way to let them keep their U.S. charter. He gave their executives a grand total of zero days in jail, zero dollars in individual fines.

To reiterate: HSBC laundered money for guys who chop peoples‘ heads off with chainsaws. So we can dispense with the “but no one broke any laws” thing.

https://www.rollingstone.com/politics/politics-news/eric-holder-wall-str...

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17 users have voted.

Even with a pared down IRS there is a huge commitment of resources to auditing returns that use the Earned Income Credit. That's where all the thieves are, right? Wait 'till they use some of that $71 million to crack down on common street crime, like left wing or anti war demonstrations.

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RantingRooster's picture

is allowing people to die because they have been the target of "economic discrimination", ie they can't afford to pay for life saying healthcare services. When nearly 50 thousand of our fellow citizens are allowed to die, EVERY FUCKING YEAR, that's manslaughter on an industrial scale.

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"Men who look upon themselves born to reign, and others to obey, soon grow insolent; selected from the rest of mankind their minds are early poisoned by importance;" - Thomas Paine, Common Sense

Roy Blakeley's picture

Fed policies and tax policies over the past 11+ years have been geared to inflate stock prices so much that you have to be a huge idiot not to make a lot of money in the stock market. So if you have a few million, all you have to do is sit on your ass and make millions. So going out of your way to make a few million more illegally is purely pathological. Our system is run by people who are, literally, sick.

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dystopian's picture

Use a pen to steal millions for a corporation, you probably won't go to jail. Use a knife to steal a candy bar and you will. Isn't it amazing how all these prosecutors everywhere all the time think 'going after crime' is going after darker people on the street, instead of whiter people in offices.

All the street crime in the world doesn't add up to what Wall St. did, and does. No cops, go figure.

Did you hear about Mike Bloombergs program where he held Wall St. accountable for their crimes? The one where he was all over their arses? Me neither.

Always steal with a pen, never a sword.

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We cannot solve our problems with the same thinking we used when we created them.
Look deep into nature, and then you will understand everything better.
both - Albert Einstein

with clients all the time.
White women get good plea offers or jury verdicts in criminal cases. White guys with good jobs and some credentials, such as a TWIC card, get good deals.
Even when representing pocs, a black guy or Hispanic guy with some great income will get a hand slap. Women of color with income or next on the expected pecking order.
Next comes dirt poor women of color.
Last, is dirt poor men of color. Dead last, oftentimes.
Even in civil suits where the black man wants custody of his kids by white woman, he better have money and some standing in the community to overcome the obstacles.
This is absolutely nothing new. I am in my 35th year of law practice, and NOTHING HAS CHANGED.
NOTHING.

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