Bye Bye Bernie (For Now at Least)

Bernie Madoff’s 150 year sentence is exactly what he deserves. It is highly unusual for anyone with his money and connections to get such a stiff sentence, and it is still possible he will get out of jail free.

Our history of sentencing white collar criminals over the last 30 years is pretty thin. Andrew Fastow, second banana at Enron, got 37 months for helping to bilk thousands of stockholders, many of whom were his own employees, out of millions and millions of dollars. His boss, Ken Lay was never sentenced because he conveniently died.

Neil Busch paid a $50,000 settlement fee for stealing over $4 million from Silverado Savings and Loan. His brother Jeb was never charged for a fraudulent $4.5 million loan from Broward Federal Savings and Loan, which he never repaid.

The king of them all (Before Bernie) Charles Keating, stole millions and millions from pensioners by telling them that their investments in the bonds issued by Lincoln Federal Savings and Loan were federally insured. He was sentenced to 10 years on a state charge, but it was overturned because of a flawed jury instruction given by Judge Lance Ito (the same judge who presided over the OJ Simpson circus). Keating was given 12 years by a federal court, also overturned for technical reasons. In short Keating served only 4.5 years and can still claim he is completely innocent. (He actually claims he was railroaded by a vindictive government, which had caused his failure.)

One factor contributing to the stiff sentence for Madoff may also be the lack of any action taken against anyone else involved in the current market meltdown. (Robert Alan Stanford, with a $50 billion Madoff look-alike scheme, and a couple of other small Ponzi operations excepted.) No one from Bear Stearns, Lehman Brothers, Freddie and Fannie no one from Country Wide. No significant actions in the offing.

Will Bernie go down for their sins, or rise again on the third day?

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