Deutsch Bank fraud fine -- how does this make sense?

[The Winslow]

http://www.thelocal.de/money/20101222-31957.html

Deutsche Bank has struck a deal with US prosecutors to pay $553.6 million and admit criminal wrongdoing to settle a long-running probe into tax shelters that allowed customers to dodge billions of dollars in US taxes.

This reminds me of that anecdote were the cost to park your car in a local carpark was about twice the cost of a fine for illicit parking. The result was that nobody went to the park since it was cheaper to pay the fine, and you weren't even guaranteed you'd have to pay it.

Here, it's the same thing. A bank frauds for billions, with a B, and its punishment is to pay millions, with an M. The fine they should have been slapped with should have been in trillions. Because this here is just a signal to continue frauding as much as they want as it remains profitable to do so.

[Dr_Avalanche]

I would assume the prosecutors didn't feel confident enough that they could convict the bank, otherwise I see no point in a deal.

[Freedom Canadian]

This reminds me of that anecdote were the cost to park your car in a local carpark was about twice the cost of a fine for illicit parking. The result was that nobody went to the park since it was cheaper to pay the fine, and you weren't even guaranteed you'd have to pay it.

Here, it's the same thing.

It's really not.

The bank was not the one to defraud the government. It only facilitated such. So you can't really say they benefited to the tune of billions and compare that to the fine. You would need to see how much their clients got fined before you could make that comparison.

Since the bank is not pleading guilty, one assumes that prosecuting their tax fraudster clients will be somewhat easy.

Usually, in cases of tax fraud, you have to pay back the money you owe, plus interests and a penalty ranging from 100% to 200% of the fraud amount. So the bill for the bank's clients should be way higher than the amount of their theft. I do not know if such is the case here, though.

That said, I do believe that financial crimes should be punished way more harshly than they are now, and that includes this fine.

[Aloysius]

That said, I do believe that financial crimes should be punished way more harshly than they are now, and that includes this fine.

Wall, blindfold, rifles. Confiscation of the property of the executed rascal. Rinse, repeat.
I could accept for the use of water guns, if the part about confiscating the property of the rascal is kept.

[Name Lips]

Corporations exist to maximise individual profit while minimizing individual accountability...

It's usually impossible to prove -- actually PROVE -- who knew about the fraud, when they knew about it, whether they knew it was actually illegal, and so forth.

The decisions could potientially have been made piecemeal between 30 or 40 individuals, none of whom individually did anything illegal, but when you add it all up it turns into fraud. If the individual actions aren't illegal, can you prosecute the individuals?

Barring actual letters or emails that explicitly admit criminal activity, it's hard to do anything more than slap fines on the entire corporation.

[Freedom Canadian]

Wall, blindfold, rifles. Confiscation of the property of the executed rascal. Rinse, repeat.
I could accept for the use of water guns, if the part about confiscating the property of the rascal is kept.

Sounds good to me ! :D