The lesson from 2008 is that you should never commit financial crimes on a small scale. Do it bigly. If you go big enough, you'll never get punished.

Maybe Bernie Madoff's problem was that he didn't scale up further...

I think actually it's: do it bigly AND do it in coordination with other folks across a number of institutions.

If it's just you doing it bigly, then you're in for a bad time (see Nicholas William Leeson [1])

[1] https://en.wikipedia.org/wiki/Nick_Leeson

You might be taking this a little bit far. What Madoff was doing was plainly, and blatantly criminal. There really wasn't a business at all. I don't know how he'd "scale up" without imploding, and am skeptical that people would intentionally ignore and obvious Ponzi scheme.

So I guess another way to put it is that Madoff really didn't pretend to be legit, at least when you popped the hood. Honestly, I'll admit that I know less about the criminal side of the housing crisis (vs. Madoff), but I think even after the fact, stakeholders where claiming "nothing to see here, I did nothing wrong"; this is a much harder case to make when all you're doing is stealing people's money.

The analogy might work if he was actually doing some investment, misrepresenting these investments to the customer, but wound up doing really well anyway, and getting big. This is more like what Shkreli got busted for. Of course, he didn't get away with it, but that could be because of his notoriety.

There are jokes this that go like this:

- lawyer to defendant [in private]: tell me the truth. how much did you steal?

- defendant: not much, just [enter small sum]

- lawyer: then i won't be defending you

Madoff's issue was that he stole from rich people. If he had only stolen from poor people, he probably would have been fine.

Seems most people who do big financial crimes, get away with it. Perhaps they get a slap on the wrist, with a few exceptions like Bernie Madoff.

Cheap debt and steady economic growth has made it easy for bad actors to fly under the radar. That may change if there’s a prolonged economic downturn.

https://www.cnbc.com/2022/07/13/inflation-rose-9point1percen...

Just read any recent SEC regulatory action. You'll get things like:

* JPMorgan participated in an illicit scheme for a profit of 5M so they got a 200k fine

* Citadel engaged in fraudulent mislabelings of orders for a total of 280.000 actions of the same type over some three years, got a fine of 100k (for some 30cents/infraction).

* and so on and so forth.

Past a point, it's just the cost of doing business.