The Wall Street Journal reported that Citi has agreed to pay $285 million to settle fraud charges. It's one of several settlements from banks like Goldman Sachs, Citigroup, J.P. Morgan, and others. Those financial penalties don't make up to a hill of beans when juxtaposed alongside the market valuations of those companies. Essentially, they skirted any punishment at all.
In Citi's case, the bank admitted to selling mortgage bonds under fraudulent pretenses. Basically, it sold the bonds without disclosing to investors that at the same time it was selling the bonds, Citi was placing side bets, or shorting the deal in a Machiavellian twist that would enable Citi to profit from its belief that the value of the assets would decline. By not fully disclosing the terms of the deal, the SEC alleged that Citi had deceived investors. The government has given Citi a pass, however, allowing it to use shareholder money to settle the fraud charges.
Whereas the government readily excuses big corporations that violate laws, it locks ordinary Americans in prison at a record pace. I am currently imprisoned at the federal prison camp in Atwater, California. I've been in prison since 1987 because of bad decisions I made during a reckless transition between adolescence and adulthood. I led a scheme to sell cocaine. Although I did not have a history of violence or weapons, when my judge imposed a prison term, he slammed me with a 45-year sentence. Since then, I've spent more than half of my life locked in prisons of every security level.
When I began serving my sentence in a high security United States Penitentiary, tens of thousands of new nonviolent drug offenders were being locked in prison each month. Today, thousands of low-level, white-collar offenders are being churned through America's prison system. I regularly hear stories from men who were ripped away from their families at gunpoint for business related offenses. Some of my fellow prisoners, for example, provided inaccurate information to qualify for a mortgage.
Others serve time because they did not report their taxes accurately. Others provided inaccurate information on bankruptcy forms. The government didn't have compassion on them. It didn't give them a pass, enabling them to settle disputes through civil proceedings. Instead, they were locked inside the federal prison system, exposing them to all of the ancillary consequences of imprisonment.
It sickens me to read of judicial duplicity. Clearly, our country has a double standard. Whereas the government demands its pound of flesh from ordinary citizens who err in judgment, it goes easy on the mighty banks of Wall Street. Perhaps that injustice is worth protesting.
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