Just finished listening to Conspiracy of Fools, a fantastic book about Enron, while driving back and forth to various airports. One interesting item from the book is that it lays out exactly how much white collar crime pays. Andrew Fastow and Michael Copper looted from Enron’s shareholders in ways that attracted the ire of the Justice Department. Fastow earned something like $100 million from his Enron salary and, mostly, the off-books partnerships that he created to enrich himself while helping the Harvard Business School and McKinsey crowd produce the quarterly numbers that they wanted to show the public. As part of a plea bargain with the Federales, Fastow had to refund about $20 million of his illegal profits and serve up to 10 years in prison. Copper is in a similar boat, having to refund a small percentage of the tens of $millions that he obtained illegally. So it would seem that crime pays roughly $8 million per year spent at Club Fed.
8 thoughts on “Crime actually does pay reasonably well”
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Is there a civil case to recover money lost by investors etc ?
I had the same thought when I read the book. These guys should lose ALL of their gains as part of the sentence. I might go to jail for 5 years if I’d could walk away with some million $$$ afterwards. Doesn’t sound that much worse than spending 10 hours in a $#$%$##@ cubicle eveyr day.
The same applies to the settlements companies made with the SEC after the dot com crash. They probably made much more money than they paid to the SEC so they’ll do it again. Henry Blodget also did pretty well. Why should he stop lying to people?
I’d rather have 10 years of my life than 80 million bucks, to be honest. you’ve only got 70-odd years. And if you spend 12 of them in school and the last 8 in a resthome watching gameshows on TV, then 10 years is one 5th of your life that’s actually worth living. I reckon the sucker loses out.
You’re right tho, Hans, it’s probably not that much worse than sitting in a cubicle every day.
Bryan: I’m sure it will be painful for Mr. Fastow to serve his time. On the other hand, his wife and children will be enjoying the money that he made from Enron and the off-books partnerships. So he might get some satisfaction out of providing for them, in the way that a merchant mariner who spends most of his time at sea feels good about sending money home to his dependents. For an unmarried childless criminal, the $8 million per year might seem less attractive.
Philip: Regarding “his wife and children will be enjoying the money” — recall that Mrs Fastow went to jail. Why not put the kids in the slammer, too? Such a policy would deter any criminal who wants to “feel good about sending money home to his dependents.”
Not bad. However, I’d imagine it pays better to be one of the white collar criminals who doesn’t get caught.
The greater the risk, the greater the reward…
Maybe Harvard Business School should be teaching their graduates to plunder foreign populations instead of American… It would be kinda like the old revolutionary privateers, um, I mean Yankee Traders
Just where does one get audio versions of books like this one? I don’t buy or read many books but might consume more as audio. Thanks.