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Old 05-01-2019, 01:06 PM
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White collar criminals should NOT get a pass


NASA Says Metals Fraud Caused $700 Million Satellite Failure

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A metals manufacturer faked test results and provided faulty materials to NASA, causing more than $700 million in losses and two failed satellite launch missions, according to an investigation by the U.S. space agency.

The fraud involved an Oregon company called Sapa Profiles Inc., which falsified thousands of certifications for aluminum parts over 19 years for hundreds of customers, including NASA.
Falsifying tests and delivering faulty parts FOR NINETEEN YEARS!!!!. That seems like a pattern of criminal behavior to me. But THIS is what caught my eye:
Quote:
News of the satellite failures comes a week after Norsk Hydro ASA, the current parent company of Sapa, agreed to pay $46 million to NASA, the Department of Defense and others to resolve criminal charges and civil claims related to the fraud, which took place from 1996 to 2015.
They were able to PAY to resolve criminal charges. They paid a fine.

I assume the following:

1) The 46 million is an amount far less than what the company was paid. Further, I assume that this plus their legal fees are less than what they were paid. Meaning the company still made some money

2) No one from the company was ever arrested, booked, fingerprinted, etc...

3) The Company executives all got the salaries, insurance, stock options, etc...

4) If a company employee was engaged in some sort of fraud for personal gain through the company, THAT employee would be arrested and prosecuted.

If I broke into the corporate offices of SAPA in the dead of night, and made off with 4 thousand dollars worth of office supplies, I could be arrested, prosecuted and do prison time. Why do the executives of this company get to have the company pay fine and retain their freedom and clean records after stealing millions?

RESOLVED!

1) Defrauding Government agencies out of tax dollars is every bit as harmful to society as other types of theft, if not more so. *

2) Company Executives are responsible for the actions of the company. **

3) Company Executives should not be able to hide behind the company. They should all held personally accountable for their actions. ***

4) Company Executives who participate in defrauding the Government (stealing from the taxpayers) should be investigated and prosecuted just as vigorously as any other types of theft. I am OK with extraditions for execs who are foreign nationals. I am also OK with raiding parties snatching from their beds and hauling them across the border under cover of night. ****

5) Company Executives should face criminal penalties commensurate with amounts taken.

If 4 guys can get 10 years each for robbing a bank (breaking in, no violence), then company executives should face at least that much.

* The old adage 'you can steal more with a briefcase than you can with a gun'. Or 'the best way to rob a bank is to own it'. They are thieves and they steal from us all.

** Assuming, of course, they had knowledge of and\or approved the illegal action

*** Companies do not commit crimes, people do. If individuals do not face personal consequences, then there is a disincentive to act ethically.

**** Seriously, fuck these guys.  

***** Iím thinking 10 years minimum.


Mods, if this is inappropriate, feel free to move, delete, bend, staple, fold....
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Old 05-01-2019, 01:28 PM
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1) The 46 million is an amount far less than what the company was paid. Further, I assume that this plus their legal fees are less than what they were paid. Meaning the company still made some money
If I'm reading this correctly, they were only paid 1.8 million by NASA.
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Old 05-01-2019, 01:35 PM
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If I'm reading this correctly, they were only paid 1.8 million by NASA.
NASA wasn't the only agency/company they defrauded.
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Old 05-01-2019, 01:35 PM
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While in general I agree with your title - that WC criminals should not get a pass - I have problems w/ many of your specific resolutions. (Sorry, I didn't read the link, and know nothing of the specific case.)

2-5 might run afoul of some of the most basic principles of incorporation. Sure, there are instances in which executives ought to be held personally liable, but I'm not eager to greatly expand officer liability across the board.

WRT your final comment, I'm somewhat concerned by the recent trend of criminalizing activity and imposing incarceration. I'm not certain that incarceration is a desirable or appropriate response to a great deal of nonviolent crime.

But having said that, I'm not a strong supporter of unbridled capitalism, and am all for the perpetrators of fraud being punished. The problem is that the "rules" are often so complicated, and the corporate resources so greater than the government's, that it is often difficult to prove fraud.
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Old 05-01-2019, 01:39 PM
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Old 05-01-2019, 01:58 PM
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From what I'm reading, the $46 million is mostly to settle a civil case.
The criminal charges that keep getting mentioned are mail fraud.
I'm not sure paying $46 million dollars, pleading guilty to a federal crime and not being allowed to take government contracts anymore constitutes getting a pass.
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Old 05-01-2019, 02:03 PM
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ISTM that one of the problems in these types of cases is often that the middle management and employees on the ground refuse to flip on their bosses. I think they system should be set up so that the person who ultimately made the call to commit the crime is the one who should receive the harshest punishment. This would encourage the midlevel offenders to turn on the boss since then they would no longer be the one on the hood for having made the call.
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Old 05-01-2019, 02:05 PM
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The problem is we have what's essentially a two-tier legal system.

Most people break a law, get arrested, and receive some appropriate punishment.

But we also have a legal system that allows people who have enough money to lawyer up and buy their way out of facing the consequences for breaking the law.
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Old 05-01-2019, 02:08 PM
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...

2-5 might run afoul of some of the most basic principles of incorporation. Sure, there are instances in which executives ought to be held personally liable, but I'm not eager to greatly expand officer liability across the board.
....
OK, then treat the corporations as people, just as we do in Citizens United. So, if a company is found guilt of a crime, the company will be "incarcerated" for the length of the sentence. Since a company can't physically go to jail, incarceration would be that they can't do business at all during the length of the sentence, just like a natural person wouldn't be able to continue doing business if found guilty of a crime.
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Old 05-01-2019, 02:10 PM
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I'm not sure paying $46 million dollars, pleading guilty to a federal crime and not being allowed to take government contracts anymore constitutes getting a pass.
Really? If I robbed a convenience store and the judge offered me a deal where all I had to do was plead guilty, pay back some of the money I'd stolen, and promise not to rob any more convenience stores in the future, I'd consider myself lucky.
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Old 05-01-2019, 02:22 PM
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From what I'm reading, the $46 million is mostly to settle a civil case.
The criminal charges that keep getting mentioned are mail fraud.
I'm not sure paying $46 million dollars, pleading guilty to a federal crime and not being allowed to take government contracts anymore constitutes getting a pass.
But it is that artificial person(the corporation) that pays the fine and is forbidden to take government contracts, isn't it? Can the humans that made the decision to defraud just form another corporation and do business with the government again?
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Old 05-01-2019, 02:31 PM
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Originally Posted by Joey P View Post
From what I'm reading, the $46 million is mostly to settle a civil case.
The criminal charges that keep getting mentioned are mail fraud.
I'm not sure paying $46 million dollars, pleading guilty to a federal crime and not being allowed to take government contracts anymore constitutes getting a pass.
Some lawyers plead on behalf of the company. No individuals were charged, let alone pleaded to anything.
The company cannot take on government contracts, but those company executives are free to start and\or join other companies and bid on contracts or sit on Boards of Directors, etc.....
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Old 05-01-2019, 02:33 PM
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WRT your final comment, I'm somewhat concerned by the recent trend of criminalizing activity and imposing incarceration. I'm not certain that incarceration is a desirable or appropriate response to a great deal of nonviolent crime.
But as it stands now, a simple cost\benefit analysis says defrauding is the right thing to do. You can profit greatly and face no personal consequences. it doesn't tarnish your career and you may not even loose your current job if caught.
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Old 05-01-2019, 02:48 PM
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OK, then treat the corporations as people, just as we do in Citizens United. So, if a company is found guilt of a crime, the company will be "incarcerated" for the length of the sentence. Since a company can't physically go to jail, incarceration would be that they can't do business at all during the length of the sentence, just like a natural person wouldn't be able to continue doing business if found guilty of a crime.
I'd be OK with civil forfeiture. We can't allow these legal entities to use assets like factories and laboratories to commit crimes, so the government should seize those assets and sell them at auction to fund their white collar crimes unit.

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Old 05-01-2019, 03:26 PM
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We're human beings with human emotions. Fraud by deception is always going to get judged more lightly than shoving a gun in someone's face and threatening to kill them.
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Old 05-01-2019, 03:57 PM
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But as it stands now, a simple cost\benefit analysis says defrauding is the right thing to do. You can profit greatly and face no personal consequences. it doesn't tarnish your career and you may not even loose your current job if caught.

I guess I'm just not a huge fan of incarceration - at least to the extent we do it in America. I fully support civil penalties - maybe they should be higher. And restitution is a good thing. But for many nonviolent offenders, I'm not persuaded incarceration is the best option. Probably more of a general position of mine, not necessarily relevant to this thread.
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Old 05-01-2019, 04:26 PM
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https://www.justice.gov/opa/pr/alumi...mers-including

First, before you guys get your underwear in a righteous twist, this is a settlement, not the results of a trial. So the DOJ, NASA, etc... all agreed that this is better than going to trial on this. It's not like somehow someone weaseled out of anything.

Second, the Sapa testing lab supervisor DID get 3 years in jail and is required to pay $170,000 in restitution for his role in this. Also there's another 34.6 million that Sapa/Norsk Hydro is on the hook to pay to NASA as part of a related civil settlement for not complying to specifications.

So in the end, the company's on the hook for 80 million dollars, more or less, and the guy most directly responsible is in jail and on the hook personally for $170k.
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Old 05-01-2019, 04:45 PM
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Really? If I robbed a convenience store and the judge offered me a deal where all I had to do was plead guilty, pay back some of the money I'd stolen, and promise not to rob any more convenience stores in the future, I'd consider myself lucky.
If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn't be getting a pass.

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But it is that artificial person(the corporation) that pays the fine and is forbidden to take government contracts, isn't it? Can the humans that made the decision to defraud just form another corporation and do business with the government again?
It should be noted that at least one person that one of the articles linked here states that the person who directed others to falsify the test results got a 3 year prison sentence as well as a $170,000 fine.

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Some lawyers plead on behalf of the company. No individuals were charged, let alone pleaded to anything.
Yes, some individuals plead guilty, were charged and were sentenced to jail.
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Old 05-01-2019, 05:27 PM
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We're human beings with human emotions. Fraud by deception is always going to get judged more lightly than shoving a gun in someone's face and threatening to kill them.
But that doesn't explain why frauds by corporations are judged more lightly than fraud by individuals, or theft where there was no violence at all (safecrackers, pickpockets, scam artists, con men)
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Old 05-01-2019, 05:31 PM
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If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn't be getting a pass.
what if in the process you accidentally set off the sprinkler system in the mall containing the convenience store causing $700 thousand dollars in damage (the equivalent of crashing a 700 million dollar satellite.)

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Old 05-01-2019, 05:34 PM
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If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn't be getting a pass.


It should be noted that at least one person that one of the articles linked here states that the person who directed others to falsify the test results got a 3 year prison sentence as well as a $170,000 fine.


Yes, some individuals plead guilty, were charged and were sentenced to jail.
From bump's link:

Quote:
Balius also instructed employees to violate other testing standards, such as increasing the speed of the testing machines or cutting samples in a manner that did not meet the required specifications. Balius pleaded guilty in July 2017 and was sentenced to three years in prison and ordered to pay over $170,000 in restitution.
3 years is not good enough, but it's something.

Do you have a site for any others?
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Old 05-01-2019, 05:42 PM
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If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn't be getting a pass.
No, it certainly would not. But that would be a very rare occurrence. Especially since if you are robbing convenience stores, you are unlikely to be able to afford a good lawyer and even less likely to be able to come up with 50K for restitution.

But even you did, it would be apples and oranges. My point being that if you have the funds to pay for a good lawyer and be able to pay the fine, it wouldn't really hurt that much. I am fairly certain that you would be hard-pressed to find a person in prison who wouldn't have chosen to pay a fine instead of the prison sentence.
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Old 05-01-2019, 06:12 PM
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I guess I'm just not a huge fan of incarceration - at least to the extent we do it in America. I fully support civil penalties - maybe they should be higher. And restitution is a good thing. But for many nonviolent offenders, I'm not persuaded incarceration is the best option. Probably more of a general position of mine, not necessarily relevant to this thread.
The problem is the people who committed the fraud do not suffer the consequences (usually).

Look at the likes of Deutsche Bank which over the last few years has run up an impressive list of major infractions (there have been a few more since that story was published). The banks pays a fine but that just punishes the shareholders.

Or HSBC which admitted to massive money laundering schemes for drug lords and freaking terrorists but only had to pay a fine. There are people in jail for LIFE for selling $20 of weed and you do not think these bankers deserve prison time?

Worse, the people responsible got their bonuses and fat salaries breaking the rules years ago. We cannot sue them personally so the worst that happens is they get fired. But, by-and-large they don't.

So, there is literally no reason for them to play by the rules when there is no accountability. Indeed, the incentive is to break the law.
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Old 05-01-2019, 08:23 PM
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what if in the process you accidentally set off the sprinkler system in the mall containing the convenience store causing $700 thousand dollars in damage (the equivalent of crashing a 700 million dollar satellite.)
Then you'd end up paying more money. I'm not sure where the issue is there.

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3 years is not good enough, but it's something.

Do you have a site for any others?
I don't have any cites other than the two links in this thread and have no knowledge about the case beyond skimming those two articles. Opening this thread earlier today was the first time I'd ever even heard about it.

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No, it certainly would not. But that would be a very rare occurrence. Especially since if you are robbing convenience stores, you are unlikely to be able to afford a good lawyer and even less likely to be able to come up with 50K for restitution.
But even you did, it would be apples and oranges.
You're the one that brought up the c-store thing, I was just running with your hypothetical.

Quote:
My point being that if you have the funds to pay for a good lawyer and be able to pay the fine, it wouldn't really hurt that much. I am fairly certain that you would be hard-pressed to find a person in prison who wouldn't have chosen to pay a fine instead of the prison sentence.
This is true. I think you have to look at this not from the point of view of 'white collar criminals' but rather 'white collar crimes'.
People that commit non-violent crimes that typically involve money are going to, generally, see less jail time than people that present a [physical] threat to the public or can't convince the judge they won't jump bail.
A wealthy person that does a million dollars in damage to a mall is going to harsher punishment than a homeless person playing Three Card Monte in the subway.
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Old 05-02-2019, 07:50 AM
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The problem is the people who committed the fraud do not suffer the consequences (usually).

...

Worse, the people responsible got their bonuses and fat salaries breaking the rules years ago. We cannot sue them personally so the worst that happens is they get fired. But, by-and-large they don't.

So, there is literally no reason for them to play by the rules when there is no accountability. Indeed, the incentive is to break the law.
I can imagine a situation where monetary damages and other oversight actions are imposed on the current corporation, causing the loss to be borne by current shareholders. The issue is whether those penalties/reactions are large enough to deter malfeasance. If the penalties are sufficient, perhaps the current shareholders could pursue private action against the officers they feel responsible.

Someone wiser than me will have to weigh in on the economic benefits of shielding corporations and corporate officers. I'd better step out of the discussion, as I mostly slept thru Corporations in law school!
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Old 05-02-2019, 08:56 AM
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From bump's link:



3 years is not good enough, but it's something.

Do you have a site for any others?
FYI, he was actually convicted of mail fraud.

https://www.justice.gov/criminal-vns...93996/download
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Old 05-02-2019, 09:02 AM
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Then you'd end up paying more money. I'm not sure where the issue is there.
Actually, you'd probably be charged with two separate crimes- one for robbery, and one for illegally setting off a fire system, or something like that.

The problem as I understand some of you to be articulating it, is that the penalties of illegally setting off a fire system are statutory, and unrelated to any damage. So the guy sets off the fire system, gets a year in prison or whatever, even though he caused an immense amount of damage.

I think the typical remedy here would be that the stores involved would sue the person to recover damages, but if you're robbing mall convenience stores, you probably don't have that much money, or will ever make enough money to pay that off. Them's the breaks; that's why you carry insurance.
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Old 05-02-2019, 09:47 AM
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It should be noted that the settlement was paid by a parent company which didn't own Sapa at the time of the fraud and couldn't have been involved in it. They bought the company, and therefore acquired its obligations.
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Old 05-02-2019, 10:27 AM
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If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn't be getting a pass.
Convince me that in nineteen years of falsifying their records, this corporation made less than forty-six million dollars and is now looking at a net loss.

The usual pattern is a corporation breaks the law and makes five hundred million and if it gets caught it pays a fifty million dollar fine. Paying the fine is just seen as a cost of doing business; like a robber having to buy a gun.
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Old 05-02-2019, 10:37 AM
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https://www.justice.gov/opa/pr/alumi...mers-including
So in the end, the company's on the hook for 80 million dollars, more or less, and the guy most directly responsible is in jail and on the hook personally for $170k.
(bolding mine)"The guy most directly responsible" is the lab supervisor?

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Old 05-02-2019, 11:10 AM
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Outrage over lack of criminal sentences for some white collar criminals, or disproportionately light sentences in comparison to those of other criminals is highly understandable.

It's also false that white collar criminals in general "get a pass".
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Old 05-02-2019, 12:47 PM
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Outrage over lack of criminal sentences for some white collar criminals, or disproportionately light sentences in comparison to those of other criminals is highly understandable.

It's also false that white collar criminals in general "get a pass".
Perhaps I need to be more specific.

When I say 'White Collar', I am referring to executives of companies committing crimes.



Once again I have failed.

When I say 'White Collar', I am referring to executives of legitimate companies committing crimes through the business.

We cannot count someone like Madoff. Madoff's firm was sham from the get-go. The fact that his clients and many of his employees did not this till the very end notwithstanding. His firm was less legitimate than a mob front business. A mob front business still had to do the occasional legit job.
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Old 05-02-2019, 12:58 PM
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Outrage over lack of criminal sentences for some white collar criminals, or disproportionately light sentences in comparison to those of other criminals is highly understandable.

It's also false that white collar criminals in general "get a pass".
I'd say that article shows the opposite. It lists the longest sentences ever handed out to white collar criminals. And some of those guys - who were setting the records - are receiving sentences of "only" forty years.

Sure, forty years is a long prison sentences. But I knew hundreds of regular criminals who were serving sentences longer than that. And if I knew hundreds of them, then there must have been thousands of them out there.

If a forty year sentences gets you in the record book, it means people like you are receiving relatively light sentences.
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Old 05-02-2019, 01:15 PM
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OK, then treat the corporations as people, just as we do in Citizens United. So, if a company is found guilt of a crime, the company will be "incarcerated" for the length of the sentence. Since a company can't physically go to jail, incarceration would be that they can't do business at all during the length of the sentence, just like a natural person wouldn't be able to continue doing business if found guilty of a crime.
Or, as Robert Reich put it, "Iíll believe corporations are people when Texas executes one."
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Old 05-02-2019, 01:25 PM
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(bolding mine)"The guy most directly responsible" is the lab supervisor?
He's the guy deliberately directing the falsification of the lab and testing results.

And that's the thing- you can't just wave your hands and say the CEO or plant manager should be jailed- he may have done something stupid like created a perverse incentive that the lab manager latched onto for doing his falsifications.

You'd have to prove that someone above him deliberately commanded him to falsify this stuff.

I suspect that since the company and the DOJ settled out of court, that all that stuff was extremely murky and not as clear as everyone seems to think it must have been. Otherwise they'd have been less inclined to settle out of court.

Look at it this way- let's say the CEO said something movie villain-esque like "I don't care what you need do; we HAVE to start shipping more products.", with a clear implication to those actually in the room, that he means for them to start cheating.

How are you going to prove that's what he meant, months, if not years after the fact? The depositions are going to say that he said what he said, and his lawyers are going to argue that there's an unspoken "within the law" implication to what he said- that saying "I don't care what you need to do" is a figure of speech, not a literal statement, etc....

So they can't really go after the CEO in that case, but they can go after the lab manager, who seems to have been caught dead to rights.
  #36  
Old 05-02-2019, 02:23 PM
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He's the guy deliberately directing the falsification of the lab and testing results.
But what is his motive? How does he benefit from the falsification??

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You'd have to prove that someone above him deliberately commanded him to falsify this stuff.
No, you have to prove that someone knew about it and profited from it.
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Old 05-02-2019, 02:34 PM
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...

So they can't really go after the CEO in that case, but they can go after the lab manager, who seems to have been caught dead to rights.
But, what about the company itself? It's a person that committed a crime and should face jail time, or the equivalent for an artificial person -- maybe the inability for that person to conduct business for the length of the sentence. If a company can have a religious preference (like Hobby Lobby) and have free speech rights (like Citizens United), it should also be able to face jail time.
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Old 05-02-2019, 02:38 PM
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But what is his motive? How does he benefit from the falsification??
Sure, but that motive doesn't have to be illegal. Let's say he gets a bonus for reducing the QA cycle time, with the understood caveat that everything actually has to pass. He's got an incentive to fudge stuff without even being directed to do anything illegal.


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No, you have to prove that someone knew about it and profited from it.
I don't think there's even a question of profit involved- if he was directed to do it and it was knowingly illegal, that's probably just as criminal. For example, if a company's in dire financial straits, and management orders someone to cut illegal corners to ship product faster, that's illegal to order AND to carry out, regardless of whether anyone actually profits from it.

Or... you'd have to prove that someone above him was aware of it, and deliberately turned a blind eye in order to profit from it. It's the intent, not whether anyone actually profited from it or not.
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Old 05-02-2019, 06:26 PM
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Okay, how about no incarceration, but a public flogging with a cat'o nine tails?

I know I'd buy a ticket to watch.
  #40  
Old 05-03-2019, 03:15 PM
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But, what about the company itself? It's a person that committed a crime and should face jail time, or the equivalent for an artificial person -- maybe the inability for that person to conduct business for the length of the sentence.
[Bolding mine]

The problem with doing that is that all the lowest level employees of that company, who had no say wrt the white collar crime, would be out of work.
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Old 05-03-2019, 03:24 PM
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[Bolding mine]

The problem with doing that is that all the lowest level employees of that company, who had no say wrt the white collar crime, would be out of work.
As long as we're going to treat corporations as people, all the way to having essentially the same free speech and religion rights, then they should be treated as people in other contexts. The can't just get the freedoms without getting the consequences.

In any case, when we incarcerate a criminal, his/her children and spouses suffer, even though they did nothing criminal. Are you against incarceration for natural persons as well?
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Old 05-04-2019, 05:02 PM
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As long as we're going to treat corporations as people, all the way to having essentially the same free speech and religion rights, then they should be treated as people in other contexts. The can't just get the freedoms without getting the consequences.

In any case, when we incarcerate a criminal, his/her children and spouses suffer, even though they did nothing criminal. Are you against incarceration for natural persons as well?
FWIW, I'm not a fan of corporate personhood and I think white collar crimes should be punished more severely than they are now. To the quoted comment, there is a huge difference between the suffering of an incarcerated criminal's spouse/children (if there are any) and the damage caused to an economy when hundreds/thousands/tens-of-thousands of people become unemployed overnight.
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Old 05-04-2019, 07:20 PM
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I think corporate personhood makes sense in some contexts (signing docs, limited liability), but not other contexts (same speech and religious freedoms). However, the fact is, corporate persons have those other rights, so there should be consequences as well. In a different world, where they weren't treated like natural persons in so many ways, stricter enforcement of white collar crime would be sufficient. Maybe shutting them down for years is too much - dissolve their board and require new incorporation docs? Require a new owner?
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Old 05-04-2019, 08:28 PM
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But as it stands now, a simple cost\benefit analysis says defrauding is the right thing to do. You can profit greatly and face no personal consequences. it doesn't tarnish your career and you may not even loose your current job if caught.
As a general rule your career suffers if you cause $46 million in damage against a profit of $1.8 million.
  #45  
Old 05-07-2019, 09:17 PM
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There are people in jail for LIFE for selling $20 of weed and you do not think these bankers deserve prison time?
This sort of horseshit needs called out every time it is used. The guy did not get "LIFE" (OMG!!!!) for selling $20 worth of weed. Nobody gets life for selling $20 worth of weed.

He got life because he is a recidivist. He was convicted of four prior felonies according to your own cite.

Oppose recidivist laws if you want; I'm not very supportive of them as applied, but don't shit all over the board by giving the impression that some 19 year old kid can walk out on the street and get life for ONLY selling weed. It is a dishonest argument tactic.
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Old 05-07-2019, 10:05 PM
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Maybe shutting them down for years is too much - dissolve their board and require new incorporation docs? Require a new owner?
Confiscate and place under management of a state's trustee, then put up for sale before or after reorganization (whichever makes for a better deal). Execs and directors who abided the malfeasance must go and surrender all stock and options.

Last edited by JRDelirious; 05-07-2019 at 10:05 PM.
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Old 05-07-2019, 10:35 PM
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Someone wiser than me will have to weigh in on the economic benefits of shielding corporations and corporate officers. I'd better step out of the discussion, as I mostly slept thru Corporations in law school!
To that you have to go back to the reason why corporations were first invented. British ship owners who took consignment of traders' goods would be personally bankrupted in the event that a ship sank, as they would be held liable for the loss of all the goods aboard.

So there was a disincentive to overseas trade. But overseas trade was beneficial to the economy as a whole. So the corporate entity was invented wherin liability would be limited to the company assests alone, not extending to the personal assets of the company officers.
  #48  
Old 05-08-2019, 12:22 AM
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In a different world, where they weren't treated like natural persons in so many ways, stricter enforcement of white collar crime would be sufficient. Maybe shutting them down for years is too much - dissolve their board and require new incorporation docs? Require a new owner?
Invoke the 13th Amendment. When a corporation is convicted of a crime, it can be sentenced to a period of involuntary servitude, when its assets work for the government.
  #49  
Old 05-09-2019, 12:39 AM
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To that you have to go back to the reason why corporations were first invented. British ship owners who took consignment of traders' goods would be personally bankrupted in the event that a ship sank, as they would be held liable for the loss of all the goods aboard.

So there was a disincentive to overseas trade. But overseas trade was beneficial to the economy as a whole. So the corporate entity was invented wherin liability would be limited to the company assests alone, not extending to the personal assets of the company officers.
Until relatively recently (15 years, maybe?), the British Lloyd's still had its associates personally liable. It ended when some disaster at sea or another ended up bankrupting a number of them (who didn't expect that to actually happen).


Even though it's probably useful for the economy, stock holders still benefit from what is essentially a gigantic privilege : not being liable for an activity you engage in. If I accidentally drop a flower pot on someone's toe, I'm liable. But if I own, say, 35% of a chemical corporation and dictate policies that result in a 5 000 deaths when a very toxic chemical leaks (assuming not illegal actions), I'm not.

I sometimes amused myself by mentioning to Libertarian types that in Libertaria, stock-holders should be personally liable and so that they should agitate for policies abolishing this privilege.
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  #50  
Old 05-09-2019, 01:00 AM
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To that you have to go back to the reason why corporations were first invented. British ship owners who took consignment of traders' goods would be personally bankrupted in the event that a ship sank, as they would be held liable for the loss of all the goods aboard.

So there was a disincentive to overseas trade. But overseas trade was beneficial to the economy as a whole. So the corporate entity was invented wherin liability would be limited to the company assests alone, not extending to the personal assets of the company officers.
I'm aware of why corporations were formed. And I can see a good argument for how it benefits the overall economy to allow people to place limits on the financial liability they acquire from making investments.

I can't see any argument, economic or otherwise, where it benefits society to allow corporations to be used to shield people who are breaking the law.
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