This is more evidence of the flaws of the (US, anyway) penal system that an argument against custodial sentences in general, no?
I get where you are coming from, but do you have practical alternatives? A slap on the wrist is probably overall a worse (global) outcome...
It is more that people tend to be extremely selective about when they see that bigger picture.
There are lots of smart people rotting in prison who committed very similar crimes who never seem to elicit sympathy. Coincidentally, they tended not to be white collar strivers before being busted.
When you've created 20 shell companies, I think at this point you've gone beyond "messing up". Just like there's a difference between a crime-of-passion single murder and a serial killer.
Rehabilitation is another issue entirely. I really wish we had a system in place to make that happen, but we don't. Putting him away isn't about revenge at all, at least not to me.
Not punishing this is the same as allowing it.
We should definitely punish the fraud. But also look at rehabilitation.
In this case, we are taking someone that could under the right circumstance be a net positive for society and putting him in jail for 5 years where he will most probably come out as a destroyed human.
I will never understand how people desire for revenge negate the bigger picture.