Here in school we learn that the chance to get actually caught is the primary deterrent and second the weight of the sentence in either monetary terms or time served.
Because people are bad at estimating low probability and high outcome expected values. If you are old you might even not deterred at all by a very long sentence if there is only a small chance that you actually both get caught and have to serve the time.
I think as a general rule, probability is more important to dissuade things like speeding or murder. I think advanced financial crimes and especially fraud have such an inherently low risk of getting caught quickly enough (after all, by definition they weren't caught by the sophisticated investors who have the most to lose) that we will have far more success by having heavy punishments.
Re:Elizabeth Holmes found guilty
by henrikschroder on Tuesday January 04, 2022 @12:46AM
(#29791836)
Wait, what, does she get to keep the money she fraudulently acquired?
I doubt she legally gets to keep all of it. In theory she probably cannot keep any, but if it's sufficiently hidden or already spent or given away it may be impossible to recover. The people she defrauded may accept recoverable cents on the dollar to get something back, and she may have access to more than she has to return.
Sorry to respond a second time, but another thought occurred to me. The frauds took place a while ago. Even if she had invested half in an index fund, she should still have 2x+ of the funds left. I don't know what if any interest is charged, but she might be able to repay the original investors at 110% and still make a tidy amount of cash, depending on what she did with the money.
If you're stealing hundreds of millions of dollars, is anything less than a decade really a deterrent? Especially since sophisticated actors are the most likely to be deterred by long prison sentences.
Heck, does it really do any good to lock up someone who comes home to find his wife cheating and kills her and her lover for 20-plus years? I would contend that locking up the white-collar criminal does more good.
But I'll take on your specific example. Any crazy rich people out there, I will serve 5 years in a minimum security Western European prison for 143MM USD safely accruing interest in accounts for when I get out.