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DC Reade's avatar

I've gotten to think that the most effective penalty for a financial crime conviction would be a levy or punitive tax rate on future earnings- for 5, 10, 20 years following the conviction, or possibly for life. That would provide some semblance of restorative justice.

Even a prison sentence doesn't do that. In the unlikely event that a wealthy financial criminal ends up doing time, they're practically always able to buy protection from other inmates and favored treatment from prison authorities, who are incidentally well aware that they'd face a massive civil liability suit for huge sums of money by a well-funded legal team upon the first evidence of mistreatment or abuse. Big money buys influence and power, first and foremost. Meanwhile, under the current regime of legal penalties, the convicted offender has most often taken steps to ensure that a substantial portion of their former fortune will still be available to them when they return to life on the outside.

This is especially true for wealthy criminals who provide "substantial assistance" as informers who enable more criminal convictions. It should be understood that such informant assistance does not need to consist of "busting up the ladder", i.e., a drug wholesaler giving evidence about their supplier, or a money launderer informing on superiors. It's much more common for drug "kingpins" to obtain a lesser sentence and retain a large portion of their criminal profits by "dismantling the organization"- informing on their partners and subordinates. (ex. Rayful Edmond dismantlng his own cocaine trafficking gang by betraying his underlings; and Carlos Lehder Rivas, Steven Kalish, and Ricardo Bilonick snitching on Manuel Noriega, the leader of a national regime that merely provided a protected transport hub for shipping drugs and cash.) In that game, the people who lose the most are those at the bottom, who are left with no information to bargain with for leniency, so they get stuck with the time.

In the money laundering business, the leniency and permission to hold onto the proceeds of crime is most often obtained by providing information on the clients, not the money laundering networks of the financial industry. (Ex. Max Mirmelstein, money launderer for the Medellin Cartel.)

Anyway, I think that a penalty for financial crime that includes garnishing of future earnings and/or a punitive tax rate would allow financial criminals to return to "productive employment" and the opportunity to use their skills to seek their fortune again (as has so often been the case for white-collar criminals) - while at the same time never allowing them to forget that they owe extra to the government for their misdeeds. And their parole and probation gets to consist of intensive annual audits by the IRS.

I think it would be an easy penalty to exact, and a punishment that would fit the crime. However, so many of my fellow citizens have internalized prole disempowerment and anti-democratic apathy that it's questionable whether enough of them would bother to raise the outcry required to pass and implement legal reforms like those. No matter how much sense the policy makes.

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