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After Madoff, White-Collar Time to Match White-Collar Crime


Scammers may want to consider whether crime really pays.

Pay attention, all you wannabe white-collar crooks: With a 150-year sentence for Bernard Madoff, US District Judge Denny Chin has given new meaning to the cliché "Don't do the crime if you can't do the time."

Given the central role the Southern District of New York plays in federal court cases involving Wall Street's white-collar crime, Judge Chin's sentence undoubtedly ups the ante for those facing judgment for their lives of crime.

Admittedly, Madoff's crimes -- estimated conservatively by the judge at $13 billion -- are off the charts, way beyond what prosecutor Lisa Baroni called "garden-variety fraud."

Indeed, federal sentencing guidelines are so out of date that the highest dollar amount for the so-called "upward departure" of a sentence is set at $400 million -- a number too low for any self-respecting scammer these days.

Imagine how Madoff's sentence might look to a crook in his late 30s -- like Nicholas Cosmo, for example, promoter of the Long Island-based Ponzi scheme known as Agape World. And, after this, how could 58-year-old R. Allen Stanford be so cocky when denying his $8 billion worth of dirty deeds?

Until yesterday, the 25-year and 24-year sentences given to former Worldcom CEO Bernard Ebbers and former Enron CEO Jeffrey Skilling, respectively, might have been short enough to make crooks believe they still had a chance at a golden retirement -- a chance to retrieve their hidden stashes after their release -- even if they did get caught. No more.

Regardless of whether Judge Chin's sentence stands up under appeal, his language is sure to be considered by judges across the country.

Here's Judge Chin's reasoning about why 150 years was the appropriate sentence.

"The symbolism is important, for at least 3 reasons. First, retribution. One of the traditional notions of punishment is that an offender should be punished in proportion to his blameworthiness. Here, the message must be sent that Mr. Madoff's crimes were extraordinarily evil, and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but that it is instead, as we have heard, one that takes a staggering human toll. The symbolism is important because the message must be sent that in a society governed by the rule of law, Mr. Madoff will get what he deserves, and that he will be punished according to his moral culpability.

"Second, deterrence. Another important goal of punishment is deterrence, and the symbolism is important here because the strongest possible message must be sent to those who would engage in similar conduct that they will be caught and that they will be punished to the fullest extent of the law.

"Finally, the symbolism is also important for the victims. The victims include individuals from all walks of life. The victims include charities, both large and small, as well as academic institutions, pension funds, and other entities. Mr. Madoff's very personal betrayal struck at the rich and the not-so-rich, the elderly living on retirement funds and Social Security, middle-class folks trying to put their kids through college, and ordinary people who worked hard to save their money and who thought they were investing it safely, for themselves and their families."

Judge Chin was moved by the pleas of the victims; he said he wanted to make sure he could restore faith in the system, in the rule of law.

That's a sentiment his fellow jurists are sure to embrace.
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