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Scott Burns

Are Madoff's alleged crimes the financial equivalent of murder? Many think so

By Scott Burns
January 16, 2009
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Roy Bean, the famous hanging judge of Texas, would be disappointed. Most of the 3,000 readers who wrote in response to my recent column said hanging is too good for Bernard Madoff.

Madoff is the alleged mastermind of a $50 billion Ponzi scheme that left thousands of investors and many charitable foundations penniless. The dollar value of the crime is equal to three full years' worth of all crimes against property in America - every larceny, burglary, and auto theft. It boggles the mind.

Here is what I've been able to distill from readers' notes:

  • We're mad as hell and we're not going to take it anymore. I simply can't print some of the suggested punishments. They are too violent. Imprisonment at Guantanamo or Abu Ghraib was mentioned frequently.
  • I believe we're at the beginning of something as powerful as the civil rights movement or the protests against the Vietnam War. Many readers made the leap from a criminal Ponzi scheme to the equivalent by government. Reader B.E. suggested that Congress easily topped the $50 billion fraud annually, by putting IOUs in the Social Security trust fund and spending the surplus employment tax receipts.

  • Enforced poverty may be the new punishment. Few readers felt that conventional white-collar imprisonment was appropriate for a crime this large. People are looking for something tougher and more visceral. Many suggested that Madoff and every member of his family be stripped of all wealth. Many suggested that he be forced to live with, and serve, the poorest people in our society. Reader L.B., for instance, wrote that white-collar criminals should be forced to learn what real poverty means. She suggested cleaning toilets at a homeless shelter, for life.
  • We may soon have a financial "equivalency" for murder. People feel it isn't right a man can get five or 10 years in prison for robbing a 7-Eleven, when a white-collar crime can be more devastating to more people, but get a lighter sentence. As reader G.C. wrote: "You can kill someone in one of three ways: physically, emotionally, or financially. But only one is punishable by death."
  • We'll be a long time figuring out the equivalences, but if employers can talk in terms of "full-time equivalents" for jobs, it isn't far-fetched to imagine that white-collar crime may soon be seen as a new form of mass murder.

    Some will think this is an extreme statement, so let me explain. The highest figure I could find for the value of a human life was the average amount paid to families that suffered a loss from the 9/11 terrorist attacks, $3.1 million. Yet even using this gigantic figure, the $50 billion fraud is the financial equivalent of destroying 16,100 lives.

    I'm not a fan of the death penalty. As I wrote a few years ago, I think we need to buy Devil's Island from the French.

    Scott Burns is a syndicated columnist. He can be reached at scott@scottburns.com.

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