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Why aren’t more bankers in jail?

By David McMillin · Bankrate.com
Friday, July 11, 2014
Posted: 4 pm ET

Recent headlines have not been kind to the banking industry. Some of the notable highlights include money laundering, manipulating interest rates, working with countries tied to terrorist operations and attempting to defraud the Internal Revenue Service.

These are very serious offenses. However, Public Citizen, a Washington, D.C.-based nonprofit citizen advocacy group, points out that they all share another important similarity: The U.S. Department of Justice has failed to pursue criminal charges against any of the alleged institutions.

© sundatoon/Shutterstock.com

Rather than attempt to compile evidence to convict banking executives of crimes and send them to jail, the DOJ aims for deferred prosecution agreements and non-prosecution agreements.

These agreements allow defendants to avoid serving jail time in exchange for fulfilling a list of requirements. For banks, those requirements tend to include some big fines. In fact, BNP Paribas, one of the biggest banks in the world, recently agreed to pay an almost $9 billion fine for moving money for clients in Sudan, Cuba and Iran through the U.S. financial system.

Just how often does the DOJ use DPAs and NPAs? From 2000 and 2004, data from global law firm Gibson, Dunn and Crutcher, LLP, show that it entered into an average of around four each year. Since then, the number has soared to an average of 28 agreements each year. If that many financial institutions are committing crimes, Public Citizen is asking a question that many other organizations have pondered over the past few years: Why isn't anyone behind bars?

According to Lisa Gilbert, director of Public Citizen's Congress Watch division, the answer seems simple. These banks are too big.

"Not prosecuting big banks that have engaged in criminal activity has given rise to the perception these financial institutions are 'too big to jail,'" Gilbert said in a statement. "These softball prosecutions further highlight the real need to increase transparency on DOJ processes and decision-making when it comes to large financial institutions."

What do other experts think about the current size of banks? Find out in "Should The Big Banks Be Downsized?"

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51 Comments
JAMMES56
July 15, 2014 at 8:53 pm

To become a politician, you need funds. Where do funds come from? Contributions.How does an average American know or make a decision on how to vote? They watch television,HULU or something like that. Just how much does that cost for a one minute commercial? Could Abraham Lincoln or Theodore Roosevelt get elected today?
The fact is Banks, Insurance and Advertisine elect our officials. Just where is your local Advertising office, and can you get an application for a job there?

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Thomas Jefferson
July 15, 2014 at 8:16 pm

Yes, the DOJ has 'coerced' some monstrously large fines from our criminal bankers. So who benefits? The criminals are still in place and engaged in the next big scheme so they can generate big revenues to justify outrageous BONUSES to the very same banksters. The public is still there, although mightily impoverished particularly after the 2008 mortgage scams run by the banks, eagerly awaiting to be victimized again. So who benefits? Let's see, the DOJ collects all the billions, so far over $9 billion in fines from what I've read, which the Obama administration is using for various ACORN like projects in their aim to "radically transform" America. Banks have learned their lesson which is they need to keep bribing the politicians to keep their get-out-of-jail card. But wait, didn't the banks suffer financially so that they will be unable to pay those big bonuses? Not really. The FED has been busy letting the banks borrow billions and billions at no interest which they re-deposit at the FED which pays them interest. It's called free money. But wait! It's only free to them. The cost of the free money is a national debt which has ballooned from $7 trillion to almost $18 trillion dollars. Does it matter? It will when the US dollar loses it's reserve currency standing. So while the Obama administration is showing you with one hand that they've been really, really hard on the banks which makes you feel good about the Democrats, the banks have been showering them with political contributions (BRIBES) while the Obama administration has been 'investing' in their Acorn like re-distribution projects with their other hand. So the public is deceived into thinking that justice has been served for all the pain inflicted on the public in the 2008 meltdown but when they stop and think about it no one has benefited from this public flaying other than the banksters, the Democrats, and their re-distribution projects. WAKE UP AMERICA!

Hank
July 15, 2014 at 7:55 pm

When Obama summoned the investment bankers to the White House, they showed up in fake humility (like De Niro in 'True Confessions'). Like they were about to meet TR 'The Trust Buster', of 'big stick' fame. What they got was President Rodney King, of 'can't we get along' fame. Of course, Obama was clued in, just on time, to the fact that you cannot run a billion dollar campaign without these bankers. Oh yeah, I heard the nonsense that his campaign was run by the $10 donations. That would take 100 million people, the amount of people that voted for both Obama and Romney!

DOUG
July 15, 2014 at 7:42 pm

CAN YOY SPELL OLIGARCHY!

JAMMES56
July 15, 2014 at 7:39 pm

If you want to throw someone in jail, you have to start with slavers and people who exploit the poor. Who lends the unscrupulous money to do these things? BANKS!The ELITE!
Read your history. At one time in history,USURY was illegal. BANKING! Look it up. Blood diamonds, slavery required logistics like equipment to drill the earth, slave ships,etc. Just where do you think the money cme from?
Even more disturbing:Do you know a black man in America that knows what tribe he came from or even an an American Indian or even a Mexican that can trace his life back to the Aztecs or Mayans ?

Butler
July 15, 2014 at 5:24 pm

Sadly, believe it or not, it is "The American Way"! Little man
pays the time, Big Man gets away with the crime. Throw in the fact our financial institutions and political leaders don't have a clue at what its like at the "bottom of the food chain" for many citizens.

Herb
July 15, 2014 at 4:53 pm

It is sad to say, but our laws depend on money and money buys the politicians who write the laws, so you get what you vote for in politicians. Have you ever heard of a poor politician or banker?
How about politicians who make promises before elections and then promptly forget about their promises after their election??????
We live in a wonderful country, but................Is there a better place to live?

Hubert I. Flomenhoft
July 15, 2014 at 3:55 pm

Engines run on fuel. The economic system runs on money. After every financial crisis, there is a flurry of activity to get more liquidity (money) into the system. Thus, we depend on the very people who cause a crisis to get us out of it. Two things are needed to recover from a recession, money and credit. The government supplies money and the banks supply credit. That is why it is so difficult to take action against them, beside the political problems of campaign contributions. It's the same problem as why some BP Oil executives were not thrown in jail for documented cases of negligence leading to many deaths and tremendous damage. Too many investors depend on income from BP.

Carol
July 15, 2014 at 3:40 pm

Why aren't the politicians in jail? They have probably done more illegal things tatn anybody.

Zspoiler
July 15, 2014 at 3:18 pm

If they broke the law they they belong in jail.And not some "little" fine.And they should be broken up so they aren`t so large.But that will never happen with both the courts and policticians and the courts baught and paid for.

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