News FeedRich Man, Poor Man
I read of several financial professionals who were charged with securities fraud and other fraud charges during the past week. On February 25, James Nicholson of Westgate Capital Management, was charged with crimes that defrauded investors of more than $100 million. Paul Greenwood and Stephen Walsh of WG Trading Investors were arrested on fraud charges involving more than $500 million. Mark Bloom of the North Hills Fund admitted to divesting more than $10 million of investor money for his personal use. The list seems to have no end.
All of those financial professionals, presumably, were well educated people of privilege. Regulatory agencies issued their licenses that authorized them to accept investor funds. Clearly, they held positions of leadership and trust. Why, then, do laws fail to reflect a higher standard for these people of privilege than the laws that punish people who engage in less sophisticated criminal acts?
Despite the millions of dollars those white-collar swindlers stole from investors, sentencing statutes maximize the terms they would serve at 20 years. My experience suggests that, when convicted, those criminals will receive sentences that were considerably less.
I am incarcerated alongside a prisoner with a degree in economics from Princeton who converted $10 million of investor’s money to his own account and he serves four years; another neighbor who earned his MBA from the University of Pennsylvania’s Wharton School serves three years for a Ponzi scheme that looted investor accounts of $7 million.
I am not minimizing the difficulty of any term of imprisonment, but I sense a grave injustice when I read of the wealthy receiving prison terms that dwarf the sentences of less sophisticated offenders. Justice should hold those who have advanced degrees, privilege, and positions of leadership to a higher standard than it holds those of more humble origins.
Our prison system is filled with uneducated people who were not born with the same opportunities that these white-collar offenders took for granted. Many did not finish high school and could not qualify for employment that would pay a livable wage. They did not have histories of violence or weapons, but they trafficked in drugs with other consenting adults. Their schemes were against the law, wrong, and motivated by a desire to earn an income. Punishment was in order. A great injustice occurred, however, when such people routinely suffered through sentences of 10, 20, 30, 40 years or more. That injustice was compounded when people of wealth and privilege faced terms of significantly less time.
We need a fundamental shift in the ways we measure justice in our enlightened society. A much better barometer of justice, I suggest, would not be measured in calendar years of confinement, but individual efforts to reconcile with society, atonement, and redemption.
Mr. Santos,
As I begin to read your article Rich Man, Poor Man I correlated a recent major fraud by Ausaf Umar Siddiqui to your article. This ex vise president of merchandizing, for Fry’s Electronics, was fired after allegations of receiving $167million from numerous vendors to place their products on front page advertisements. Siddiqui and the CEO of Fry’s Electronics, John Fry, were like brothers since their early childhoods. However, it’s reported now that Mr. Fry felt that his own brother had stabbed in the back. Furthermore, as a Fry’s associate myself, although I didn’t know Siddiqui, I feel deceive as well. Instead of Ausaf trickling this money down to the associates, which indirectly put him in the position he was, he decided to literally waste those $167 million on hundred thousand hands in Las Vegas casinos.
Moreover, a few months upon his trial he had an electronic monitoring device tracking his every move, and Siddiqui was “stuck” in his 1,850-square-foot Palo Alto condominium, over seeing the gorgeous view of the south land. Now is this a manner a person should be treated prior to being in trial. I would have to agree with you Mr. Santos that kind of treatment of white collar criminals should not be acceptable. However, the matter of the fact is that how you said, they are literally the privilege class. This white collar criminals flash their millions of dollars to post bail and eventually receive intermediate sanctions. But, can this be entirely blamed on the offender, no. As the economy is on a downward elevator, I believe courts are a tad more lenient on these offenders. Courts place a bail where it’s high enough but low enough for the offender to pay. And by doing this who comes at the victor? The courts because they receive their bail money or the offender because they were granted their liberty again?
In sum, I believe the amount of money in bank accounts shouldn’t influence a court’s decision on the sanction presented . Furthermore, as this white collar criminals conduct their acts of immorality, do they stop and think of the lives they are directly or indirectly harming, I believe not. Therefore, I believe that our American courts should take their eyes off the green for once and present these criminals with harsher sanctions.
Mr. Santos:
In your article entitled “Rich Man, Poor Man” you indicated the injustice of the sentences that the “white-collar swindlers” receive compared to the rest of the prison population. Although I agree with you that the sentence is too light for their crime, I also do not condemn the reasoning for their light terms. Some questions I have for you are:
1) You mentioned that we should “shift the way we measure justice in our enlightened society”. But then you also suggested that the punishment should not be measured in the amount of time served but in the “individual efforts to reconcile with society, atonement, and redemption”. From what I understand, you feel that the sentences for these white-collar crimes are not harsh enough, and you suggest for other ways to punish these kinds of criminals. However, for my question, what exactly would you recommend, because punishment other than longer incarceration (and perhaps the death penalty) would seem like the easy way out to me in my opinion?
2) For my second question, in support of the ruling for these white-collar offenders, with prison over-crowding, would you agree that for the greater good that it would be best to not overspend on the individuals that are not an immediate threat to society and make room for more of the violent offenders?
I enjoy reading your book and articles on the blog and look forward to your updates. I wish you further success in the future. Thank you for your time.
-Ron Sioson
Dear Ron:
Thank you for giving me this opportunity to clarify my thoughts. I am of the opinion that our society has come to place too much emphasis on imprisonment as a response to all criminal conduct. As you may know, reports show that America incarcerates more people per capita than any nation on earth. The costs are extraordinary, as detailed by Pew Research. What I strive to show readers is that alternatives to imprisonment exist, and taxpayers ought to demand more use of them.
With regard to white collar offenders, it is not that I think their punishments are not severe enough. My objection is to the extreme disparity in sentencing between white collar crime and other nonviolent crime.
I believe society ought to have standards, and those who occupy positions of higher power and privilege ought to be held to a higher standard. In Pennsylvania, for example, two judges were recently convicted of accepting bribes from corrections officials in exchange for filling private prisons with people who should not have been incarcerated. Those were judges, and in my opinion, society should have held them to a higher standard. Despite their receiving millions in bribes, they received lower sentences than people I know who sold pot to consenting adults. To me, that screams of injustice.
Regardless of what sentences judges impose, I believe a more effective system would offer mechanisms that encourage offenders to work toward earning freedom through merit. Such prison reforms would lead to lower recidivism and lower operating costs.
I hope you find my answers responsive to your questions, and I wish you continuing success on your journey.
Sincerely,
Michael