Bernard Madoff Deserves The Life Sentence He’s Likely To Get
December 20, 2008
(ChattahBox) — While this devastating fraud case still remains somewhat clouded in mystery as Mr. Madoff’s version of events can only be drawn from statements attributed to him by federal prosecutors, as he has not commented publicly on the case.
But this much we know, Bernard Madoff’s worldwide $50 billion Ponzi scheme lasted longer, reached wider and cut deeper than any similar scheme in history, entirely eclipsing the puny regional ambitions of Charles Ponzi, the Boston swindler who gave his name to the scheme nearly a century ago.
It all began to unravel as investors, rattled by the financial crisis and reaching for cash, started taking money out faster than Madoff could find new victims to bring fresh cash in the door. He was arrested on Dec. 11 at his Manhattan apartment and charged with securities fraud, turned in the night before by his sons after he told them his entire business was a fraud.
Many of Wall Street’s elite are dropping faster than the financial markets they work in. In June, federal prosecutors in Brooklyn, N.Y., charged former Bear Stearns hedge-fund managers Ralph Cioffi and Matthew Tannin with lying to investors about their funds’ true value and prospects. And in September, the FBI revealed that it is investigating the people who ran Fannie Mae, Freddie Mac, Lehman Brothers and AIG, all of which were casualties of this year’s market meltdown.
This ‘alleged’ reprehensible conduct has crippled the nation’s financial system and will cost investors and taxpayers billions. And the punishment should fit the crime.
Most big-time fraud cases are prosecuted in federal court, where the federal guidelines largely control sentencing. Using a complex set of calculations, those guidelines mechanically sort criminals into different “offense levels” based on different aspects of their crimes. Higher offense levels reflect more harmful conduct and give rise to longer prison terms. Offense-level assignment, in turn, is fixed largely by measuring ostensibly discernible quantities, such as the amount of drugs in a narcotics case or, in cases involving fraud, the amount of money lost.
Jeffrey Skilling was found guilty of causing losses to Enron shareholders of more than $1 billion and was given a 24-year-plus sentence. WorldCom’s former chief, Bernard J. Ebbers got 25 years based principally on the $2.2 billion loss suffered by his company’s shareholders. Some contend these stiff sentences are out of proportion to the average sentences for crimes like murder (twenty-two years), kidnapping (fourteen) and sexual abuse (eight).
In some ways this does seem out of whack with violent crimes, but one could argue that these fraud cases actually require a great deal of pre-meditation and ultimately cause untold suffering and literally destroy many lives. Some would also argue that economic offenders pose little future threat because they’re generally stripped of powers that would permit continued criminal conduct, but it does not strip them of their ill-gotten wealth and the lives they lead before they were caught, supported by the crimes they committed.
There are checks in our legal system to allow judges to use common sense to reduce radically long sentences produced by the guidelines. But I for one hope they don’t in Madoff’s case presuming he’s found guilty.