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The U.S. Needs to Crack Down on White-Collar Crime

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Re: The U.S. Needs to Crack Down on White-Collar Crime

#91

Post by atr_gz »

zekevermillion wrote: post #12

We don't need a "crackdown". The problem with our approach to financial crimes is that it is based almost entirely on crackdowns -- splashy press releases that are supposed to deter all the thousands of other financial crimes that we lack resources to prosecute. Sometimes this leads to injustice, e.g., see the documentary film Abacus: Small Enough to Jail. The only bank to be prosecuted criminally for shenanigans in…

The story about Abacus was interesting. I didn't realize they were the only actual bank to be prosecuted. That said, a handful of employees at other small banks around the country were prosecuted - I personally know a low-level mortgage broker who went to prison for fraud related to the 2008 crisis. They were falsifying mortgage applications for unqualified customers.

The enforcement still wasn't enough in my opinion, but (and I'm struggling to find a source backing me up) I believe there were several hundred of these cases. None, however, from the big banks that arguably should take more of the blame.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#92

Post by themagician »

harryh wrote: post #27
Retric wrote: post #25

Earlier quoted context omitted.

It's not about criminal convictions. In theory it's just a civil case with a criminal case to follow. Which is why SEC fines are often less than the net befit. But, the actual number of criminal cases is rather low. EX: "In June 2009, the SEC sued Angelo Mozilo, former CEO of mortgage lender Countrywide Financial, and two other former officers, charging that they misled investors about the quality of Countrywide's lo…

It's not at all clear that all of Mozilo's earnings came from fraudulent activity. In fact, it's almost certainly true that this is not the case.

I don’t give a shit where his earnings came from. This is a man who should be utterly bankrupt and forced to pay restitution for the test of his life.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#93

Post by evancox100 »

AnthonyMouse wrote: post #11
saalweachter wrote: post #7

Earlier quoted context omitted.

At ~current funding levels, the IRS brings in ~$3 for every $1 spent on it. The federal government could bring in more tax dollars just by funding the IRS at a higher level; it doesn't, for reasons.

> At ~current funding levels, the IRS brings in ~$3 for every $1 spent on it. The federal government could bring in more tax dollars just by funding the IRS at a higher level; it doesn't, for reasons. Here are some of those reasons. $3 for every $1 is an extremely misleading way of putting it, as though the IRS is a business and everything is good as long as it's turning a profit. A better way of putting it is that c…

Not sure where GP got his/her numbers, but the $3 to $1 ratio is way off. Maybe it was describing the marginal rate for additional collection of unpaid taxes? US federal income and payroll tax receipts for 2018 was approx $3,000 billion, while the IRS budget for 2018 was only $11.7 billion, a ratio of approx 256 to 1.

It makes sense that the rate at the margin would be much higher than the overall rate, you've already collected all the low-lying fruit, now you're going after the scofflaws trying to avoid paying anything.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#94

Post by csdreamer7 »

harryh wrote: post #44
csdreamer7 wrote: post #39

Earlier quoted context omitted.

Please read the second paragraph again. Where they didn't even bring charges for an unrelated crime of financing terrorism that they found out later. That was my answer to your question.

Well that again isn't an example of someone being caught and receiving a penalty lower than the gain from the crime. I don't know why the justice department didn't pursue charges here. Maybe HSBC wasn't guilty? Maybe there wasn't sufficient evidence to win? Who knows. But this isn't an example of a caught party with a "so low that they don't matter" penalty.

> Well that again isn't an example of someone being caught and receiving a penalty lower than the gain from the crime.

I disagree... and frankly, just saying it isn't is a poor answer.

> Maybe there wasn't sufficient evidence to win?

Once again, your ignorance shows. The Justice Department expressed concern it would threaten the health of the financial system if they were too hard on HSBC at the time so they gave a low fee and ignored another crime.

> But this isn't an example of a caught party with a "so low that they don't matter" penalty.

I didn't say it was. I was answering your above question about a party that was 'caught' and faced a lower... NO penalty, in this case.

Banks are require to abide by a charter that requires good behavior. For evidence of criminal conduct that charter can be revoked and HSBC should have lost their right to operate in the United States. I would certainly call that a fee so low they don't matter penalty.

Especially since HSBC is now being accused of money laundering again... this time by Nigeria.

All you are giving is negative arguments. Saying things are not, and raising speculation without a basis does not add to the discussion. I am done with this.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#95

Post by InclinedPlane »

jjeaff wrote: post #78
pjc50 wrote: post #14

Well, yes: if you leave enough crime by the well-connected alone for long enough, in a country with poor election integrity and unlimited campaign finance spending, then you get a country run by gangsters. It came about pretty rapidly in Russia where there was no established democracy to displace.

While there have recently been some issues with some elections in the US, we definitely don't have an "election integrity" issue. There is very little evidence that any elections in the US have been affected by fraud by any significant amount.

Fraud in the form of the outcome of a specific election being different than the actual votes counted: well, probably not super widespread or rampant but not exactly non-existent.

Disenfranchisement, gerrymandering, polling place reductions, unequal representation, etc. are, however, quite rampant. Not all votes are equal in the US, and not all voters are treated as equal either. The result is the same (subversion of democracy), but the tactics are different.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#96

Post by AnthonyMouse »

evancox100 wrote: post #93
AnthonyMouse wrote: post #11

Earlier quoted context omitted.

> At ~current funding levels, the IRS brings in ~$3 for every $1 spent on it. The federal government could bring in more tax dollars just by funding the IRS at a higher level; it doesn't, for reasons. Here are some of those reasons. $3 for every $1 is an extremely misleading way of putting it, as though the IRS is a business and everything is good as long as it's turning a profit. A better way of putting it is that c…

Not sure where GP got his/her numbers, but the $3 to $1 ratio is way off. Maybe it was describing the marginal rate for additional collection of unpaid taxes? US federal income and payroll tax receipts for 2018 was approx $3,000 billion, while the IRS budget for 2018 was only $11.7 billion, a ratio of approx 256 to 1. It makes sense that the rate at the margin would be much higher than the overall rate, you've alread…

> Not sure where GP got his/her numbers, but the $3 to $1 ratio is way off. Maybe it was describing the marginal rate for additional collection of unpaid taxes? US federal income and payroll tax receipts for 2018 was approx $3,000 billion, while the IRS budget for 2018 was only $11.7 billion, a ratio of approx 256 to 1.

That's including all the taxes paid by people with unchallenged tax returns. That's basically just the cost of processing the checks. It's quite a lot more expensive to get money from someone who filed a fraudulent return and you have to do an audit to get them to pay. Especially when a lot of the audits you do won't turn up any real fraud.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#99

Post by AnthonyMouse »

leetcrew wrote: post #80
munin wrote: post #71

Earlier quoted context omitted.

Cigarettes are legal and people still smuggle and sell them on the black market to avoid paying taxes. Your scheme would be mostly indistinguishable from the current prohibition and would still be dominated by cartels and SWAT teams.

i would argue that if taxes are so onerous as to support a black market for a legal good, the taxes are probably much too high. for instance, consider the price of cigarettes in the state of new york. the average cost of a pack (after tax) is $12.85. the federal tax is about $1 per pack, and the state government levies an additional $4.35. without accounting for local taxes that are added in some counties/cities, tha…

> i would argue that if taxes are so onerous as to support a black market for a legal good, the taxes are probably much too high.

Nah, when something has large negative externalities you set the tax to the point of mostly discouraging it. That'll be pretty high. It's supposed to be.

> in addition to being an absurd tax from the get-go (in my opinion), it is also quite regressive, since poor people are significantly more likely to be smokers.

"Regressive tax" only applies to necessities. Cigarettes are a luxury item, like lottery tickets or whiskey. Nobody ever starved or froze or lost their job for lack of a cigarette.

Re: The U.S. Needs to Crack Down on White-Collar Crime

#100

Post by rrcaptain »

dragontamer wrote: post #82
sokoloff wrote: post #72

Earlier quoted context omitted.

After his “Naughty by Nature” and “Shortseller Enrichment Commission” tweets, do you believe that his twitter behavior has been curbed effectively? I guess, neither of those are blatant securities fraud or libel against a person, so maybe it has, but...

> After his “Naughty by Nature” and “Shortseller Enrichment Commission” tweets, do you believe that his twitter behavior has been curbed effectively? Obviously not yet. But if Tesla fails to curb Elon Musk, I'd expect the SEC to continue to clamp down. Remember: Tesla's settlement was to agree to clamping down on Musk's tweets. If Tesla violates that, then SEC can bring down the hammer again.

So how many chances are we going to give billionaires? Three? Four? One hundred? Most people get one mistake.
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