Events Calendar
In This Section
Most Read Stories
Police accuse bank robbery suspect of gobbling up note (with dashcam video)
Victim of beating in Kent last week is declared dead at Akron hospital
Dad accused of forcing son into field, killing him
Can DNA tests free ex-Akron captain?
Man found dead in North Akron home is identified
Browns' roster nearly devoid of consistent players
Does it work? Test team returns to try out new products advertised on television
Coventry man killed in crash at I-77 ramp
Blogs:
Pets:
Cat-loving chihuahua suckles seven abandoned kittens
The Heldenfiles:
Friday Night Notebook
Patrick McManamon:
Browns vs. Lions live …
Akron Zips:
Akron trounces Howard to reach .500
Tribe Matters:
Seven players added to Tribe’s 40-man roster
Cleveland Browns:
Robiskie, Harrison inactive
Kent State Sports:
Kent State blown out in second half, loses to Temple 47-13
Cleveland Cavaliers:
Gameblog: Cavs vs. Philadelphia 76ers
Buckeye Blogging:
OSU – Michigan college football rivals meet in Baghdad
Varsity Letters:
Four area football teams play tonight
All Da King's Men:
The Sunday Sanity Challenge
Blog of Mass Destruction:
Will Health Care Reform Pass?
Akron Law Café:
Health Care Financing Reform: (69) The Brookings Institute Study on "Bending the Curve" – Four General Strategies
See Jane Style:
Vintage Chic
Car Chase:
TIME TO GET YOUR COLLECTOR CARS WINTERIZED
Let's Talk Real Estate:
Silverdome Potentially SOLD!
Ohio Travels with Betty:
George is looking for a Thanksgiving buffet in Akron.
Sound Check:
Steely Dan Plays "The Royal Scam" at E.J. Thomas Hall
HRLite House:
A Random Rant on Testing
Akron Gamer:
Nintendo's Mario endures even as games come and go
Ebbers, another Bernie, is given only 25 years. Ponzi-style schemes nearly impossible to rationalize
By Loren Steffy
Houston Chronicle
Published on Saturday, Jul 04, 2009
Last Monday, a federal judge in Manhattan sentenced Bernie Madoff to 150 years in prison for running the biggest investment fraud in history, which cheated his clients out of billions.
In 2005, a federal judge sentenced Bernie Ebbers to 25 years for running one of the biggest corporate frauds in history, cheating investors, creditors and employees out of billions.
Madoff is 71 and Ebbers is 67, so for both, the sentences may equate to life in prison. (Ebbers is scheduled for release in 2028, when he'll be 85.)
Why, then, does Madoff get a sentence six times that of Ebbers or Enron's Jeff Skilling?
Ebbers was chief executive of WorldCom, which until Lehman Brothers' demise last fall, was the biggest corporate bankruptcy ever. Nonetheless, crimes like his and Skilling's at Enron, while painful for victims, tend to evoke less emotion than investment scams.
In a corporate fraud, the blame and consequences get spread around. Some people profit off the manipulation as the company's stock rises. When the scheme ends and the stock falls, the perpetrators lose money along with investors.
With schemes like Madoff's, though, the losses are much more personal.
''You have the perception of him reaching directly into the pockets of the victims and taking money out for himself,'' said Sam Buell, a law professor at Washington University in St. Louis and a former prosecutor who led the effort to indict Skilling. ''People react with a greater degree of outrage at the Ponzi scheme case.''
Losses for corporate fraud investors also tend to be more on paper hits to investment plans or retirement accounts. While that can be devastating, it's not the same thing as depositing savings with an adviser who simply walks off with it. Executives can claim that they simply
got caught up in the fraud, that they tried to save the company and failed.
''In a Ponzi case, there's no rationalization that can be given,'' Buell said. ''There's no veneer of respectability at all.''
Consider the Madoff victim who described to the judge how the con man consoled her after the death of her husband, even as he prepared to steal her life savings.
845 years in prison
Forbes magazine recently compiled a list of the longest sentences for white-collar crime cases. The record is held by Sholam Weiss, sentenced in 2000 to 845 years in prison for an investment scheme involving the $450 million collapse of National Heritage Life Insurance. He's scheduled for release in November 2754, the magazine said.
Norman Schmidt was convicted of running an investment scam involving NASCAR racers and was sentenced by a Colorado judge to 330 years in prison. He's set for release in 2291.
Buell said the maximum sentence for Madoff isn't surprising, given his guilty plea.
''There was never even a whisper of a defense,'' he said. ''That's an indicator right there of the magnitude of the fraud.''
Someone with Madoff's wealth could afford to mount a vigorous defense, he said. Ebbers and Skilling, of course, did, although both proved unsuccessful.
In meting out the 150-year sentence, the judge said he was sending a strong message, but at some point, a sentence several times life becomes moot.
Nor is the sentence likely to deter budding Bernies. Few con men believe they'll get caught. Does the threat of 150 years scare potential fraudsters more than 20 or 30 years?
''It seems a little far-fetched to think that it would,'' Buell said.
Stanford implications
If Ponzi crooks tend to face stiffer sentences, though, what does that mean for R. Allen Stanford, the Texas country boy turned Caribbean banker now facing trial on charges of conspiracy, fraud, bribery and obstruction of justice? Stanford is accused of running a $7 billion Ponzi scheme, a pittance compared to Madoff's fraud.
Based on the comments of his attorney, Stanford plans to mount a defense. Four others were indicted with him, and two other Stanford executives also are facing charges, making his case appear more like Ebbers' than Madoff's, Buell said.
Stanford, in other words, may run the gamut of both infamous Bernies.
Last Monday, a federal judge in Manhattan sentenced Bernie Madoff to 150 years in prison for running the biggest investment fraud in history, which cheated his clients out of billions.
Get the full article here.
Comments
Click here to post your comments
Akron, , OH
Posted 08:25 AM, 07/04/2009
When much is given much will be ask!
These folks are not good stewards of anything except their greed!!
Don't pick up the soap in the shower, in prison!!
