No Bail for Madoff’s CFO: Thoughts on Appropriate Penalties

From Reuters: Madoff firm’s CFO pleads guilty, denied bail

Bernard Madoff’s long-time deputy, Frank DiPascali, on Tuesday pleaded guilty to financial crimes including helping others carry out Wall Street’s biggest investment fraud, but shed little more light in court on the decades-long swindle.

“I’m standing here today to tell you that from the early 1990s to 2008 I helped Bernie Madoff and other people carry out a fraud that hurt thousands of people. I am guilty,” DiPascali, 52, said in Manhattan federal court in a dark suit and reading from a prepared statement.

U.S. District Judge Richard Sullivan denied DiPascali bail. He was handcuffed and escorted out of court after pleading guilty under a cooperation deal with the government….

The story notes that DiPascali faces 10 charges, and “faces a maximum possible sentence of 20 years each on some of the charges”. Madoff himself has been sentenced to an “effective life term of 150 years.”

A few years ago, when I wanted to understand more about punishment for white-collar crime, I went to someone who understands the issue, quite literally, “from the inside.”

Some of you may have heard of Walt Pavlo, who spent two years in jail for fraud and money laundering at MCI. He now works as a lecturer and consultant on white-collar crime. Nearly 3 years ago, I interviewed Pavlo about the 24-year jail term handed out to former Enron CEO, Jeff Skilling. Here’s the interview: Business Ethics Blog Interview with Walt Pavlo.

(As it happens, Pavlo served his time at the same facility where Bernie Madoff is currently located: the medium-security federal penitentiary at Butner, North Carolina.)

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