Friday, April 15, 2011

Who Decides Which Gamblers Are Arrested?

The government is going after the three largest poker sites in the country.
Eleven executives at PokerStars, Full Tilt Poker, Absolute Poker and a number of their affiliates were charged with bank fraud and money laundering in an indictment unsealed in a Manhattan court. Two of the defendants were arrested on Friday morning in Utah and Nevada. Federal agents are searching for the others.

Millions play online poker and watch televised tournaments despite the fact that "[i]n 2006 Congress passed a law curtailing online gambling. Most of the leading sites found ways to work around the law, but prosecutors allege that in doing so they broke the law."

Government officials allege, “These defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits,”

No one is for fraud, and those who benefit from millions of dollars in illegal profits should be prosecuted.  Still if the government can prosecute 11 people who ran allegedly illegal gambling sites why can't they arrest and prosecute those whose gambling caused the banking crisis that caused the worst economic crisis since the great depression?  Apparently, failing to prosecute these individuals is unique and risky.

But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.

Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud.
I guess if something's too big to fail it's also to big to prosecute; he only time to safely "go all in" is if one can bring down the whole house.

No comments: