Greetings fans of Loki’s Law Blog, all three of you! What, the title wasn’t provocative enough? Recent events in the news have brought up some old, familiar memories- specifically, so-called “white collar” crime. If you want a good article to get you started, feel free to be Voxplained to-
But while the article makes some excellent points, and is fundamentally correct, it also misses the forest for the trees. White collar crimes (specifically, financial crimes) have always been hard to prosecute, and will only get harder. And it doesn’t take some misguided Supreme Court decisions to cause this- it’s endemic to our system of justice. So, let’s examine why!
1. Money Matters. This should be the most obvious point, yet it’s barely mentioned. Our legal system, especially on the criminal side, is more concerned with “procedural” issues than it is with, um, ultimate questions of innocence and guilt. That’s why you can have Justice Scalia, in Herrera v. Collins, 506 U.S. 390 (1993), state, “There is no basis in text, tradition, or even in contemporary practice (if that were enough), for finding in the Constitution a right to demand judicial consideration of newly discovered evidence of innocence brought forward after conviction.” Theoretically, by guaranteeing procedural fairness (due process), the truth will emerge in an adversarial system.
Of course, if you have a lot of money, it is easier to either make the truth emerge, or to confuse the jury regarding the truth and keep it down in a deep, dark hole. Money allows you to pay for expert witnesses, for example, to testify about disputed issues. Money allows you to pay for your own investigators to ferret out information. And money allows you to buy not just the best attorney that money can buy, but the best TEAM of attorneys that money can buy. And it will ensure that this team of attorneys is fully dedicated to making sure you don’t spend a day in prison. Moreover, because of the many issues regarding procedural fairness, more attorneys means more motions, more motion practice, more issues related to discovery, and so on (money also allows for a well-heeled Defendant to get jury consultants, and same-day transcripts, and all sorts of things that give you small advantages). A rick Defendant can literally stop the wheels of justice from moving in some cases. Which leads to ...
2. Prosecutors Like to Win. If you are familiar with the criminal justice system, you are familiar with the use of plea bargains in the criminal justice system. So, for a typical “street-level” or, um, “blue collar” (aka, “poor”) criminal, they will often be able to get a plea bargain for their first few offenses (minimal jail or probation time), until they get hit with a certain offense ... and then they are toast. And part of the reason they are toast is, of course, because they have a record. And they have a record BECAUSE of the past plea bargains. On and on it goes.
But here’s the thing. Prosecutors, like everyone else,* are human. They want to win. And extracting onerous plea bargains and/or convicting someone with a prior record and a public defender and the testimony of LEOs (knowing that the defendant will not have the resources to hire their own experts) ... that’s an easy victory. On the other hand, financial crimes? Convicting someone with a team of well-paid attorneys who will contest everything and will obstruct all your attempts to gather evidence? That’s hard. And time-consuming. Even if you have an extremely good case, most prosecutors would be tempted to chalk up a win (agreed-to fine, agreement not to, um, do it again) rather than deal with a criminal case.
3. No One Told Me There Would Be Math. Most attorneys didn’t go to law school because they were really good at math; or, if they did, they went into patent law or tax law, not criminal law. The sad truth is that financial crimes suffer because no one is good at math. There are very very few people who are trained to investigate and ferret out these crimes. There are very very few attorneys who understand these crimes, and, for that matter, can explain these crimes to a jury. And, most importantly, there are very people on juries that understand these crimes. Confusion about math can often be parlayed into reasonable doubt. But it’s a constant winnowing effect- few investigators are trained to understand it (resources), few attorneys can prosecute it, and those that can know that it can be a hard sell to juries.
These same issues (lack of knowledge, lack of resources) are what plague computer crime investigations. Put it this way- if you are amazing at ferreting out financial crimes, you could probably make a lot more money in the private sector ... covering them up.
4. Who is Responsible? In some cases, like Madoff, or Manafort, it might seem easy to allocate responsibility. Other cases are ... harder. For example, if you look back at the history of the Very Large Banks(tm) during the Great Recession, you saw a lot of ... well, criminal activity taking place. And many of the VLBs were fined for this. But there is always the dilemma- do you go after the individuals, who are often just cogs in the machine, or do you go after the company? And if you go after the company, what does that mean for all of the employees who had nothing to do with the wrongdoing, since a criminal prosecution by the government is the death-knell for most corporations (see Andersen, Arthur).
5. “That’s a civil matter.” One common refrain you will hear from prosecutors when it comes to white collar crime, especially with regards to financial crimes, is that it is a civil matter. And by this, they mean that “since it’s only money,” people can just bring their own lawsuits to be made whole. So you get the strange situation wherein if an employee steals $100 from the cash register, that’s something the police will get involved in, but if a shareholder steals $100 million dollars from the company, “that’s a civil matter.”
There are numerous other factors that I am not addressing, but the dichotomy exists. In short, if you want to do crime in America, go BIG or go HOME.
*Lizard people are, of course, the exception.