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Ponzi Pays - Why Armed Robbery Is For Suckers In Today's Judicial System

That there are large sentencing disparities between white collar criminals and armed robbers shouldn’t be a surprise to anyone. The American legal system exhibits a strong bias toward individuals with resources who can afford top lawyers to negotiate a lenient sentence for, say, defrauding 600 investors out of $1 billion.

But according to data provided by Dynamic Securities Analytics in partnership with Ponzitracker.com, the gaps in sentencing might be larger than one might expect.

Ponzi scheme operators who stole more than $100 million in 2016 were sentenced to 14 years, about 168 months in prison, or 21 days for each $1 million stolen.

 

By comparison, federal sentences for robbery were 117 months (9.75 years) with a median loss of $2,989, which works out to about 40,372 months in prison for each $1 million stolen.

In other words, robbers served 50,000x more time per dollar than your average financial fraudster.

And the disparity widens as the amount stolen increases. Those who stole less than $5 million received sentences of, on average, 2.75 years, or about 159 months per $1 million stolen.

The disparity for those convicted of theft is less jarring. Typically, convicted thieves served 22 months for a median loss of $137,828. That’s about 159 months per million, or 227 times as long as the average Ponzi operator.

 

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Aside from the presumed wealth of those convicted, what is it that differentiates a Ponzi scheme from a robbery that makes such a dramatic difference in sentencing? A robbery implies force, sure, but is that enough to warrant a sentence that’s 50,000 times longer relative to the amount taken?

Of course, not every Ponzi scheme receives the intense media coverage that Bernie Madoff's did when he stole $60 billion, the largest financial fraud in US history. New York City dominated the Ponzi scheme tables again in 2016 thanks to the collapse of Platinum Partners, whose executives were charged with stealing more than $1 billion. Ten Ponzi schemes collapsed in California, the most of any state.