Verizon Tech Given 4-year Federal Prison Sentence For $4.5M Equipment Scam 163
McGruber writes "Michael Baxter, the network engineer at the southeastern regional headquarters of Verizon Wireless who submitted hundreds of fraudulent service requests to Cisco, has been sentenced to four years in federal prison, followed by three years of supervised release. Baxter was also ordered to pay $2.3 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon. Instead of placing the replacement parts into service in the Verizon Wireless network, Baxter took the parts home and sold them to third-party re-sellers for his own profit. He used the money to buy cars, jewelry and multiple cosmetic surgeries for his girlfriend."
Company Liable? (Score:5, Informative)
So when an employee does something great using the company's resources, the company gets the money. But when an employee does something illegal on the company resources, the company doesn't suffer?
I understand that guy getting something. But Cisco should be suing Verizon, not the person. Verizon would then sue their former employee.
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Cisco isn't suing anyone. This schmuck was prosecuted under Federal Wire Fraud charges. The fines constitute restitution.
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So when an employee does something great using the company's resources, the company gets the money.
His employer didn't really get the money in this case. If the employee had sold the equipment and then given all the profits to his employer, so that his employer could give him a raise or a promotion, then yes, you probably would have a point.
Or if the employer prevents you from investigating the case properly by blocking you every step of the way, then yes, then you sue the employer, you sue everybody who doesn't cooperate, this will then force people to turn on each other.
Personally in this case, I'd sue
Comment removed (Score:5, Funny)
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Could have gone better too -- if he'd only set his sights a little higher he could have gotten a job on Wall Street.
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But when an employee does something illegal on the company resources, the company doesn't suffer?
What makes you think Verizon isn't suffering from the use of its resources?
I understand that guy getting something. But Cisco should be suing Verizon, not the person. Verizon would then sue their former employee.
Why? What's Verizon's part in this? I gather you are claiming that since Verizon resources were misappropriated as part of the scam, it somehow generates responsibility for the resulting crime. I can think of a simple example that illustrates the absurdity of this claim. If I rob a 7-11 (say even I was an employee who used my job to gather information for planning the crime) and use the funds I obtained to buy a gun, does the 7-11 bu
Crime pays (Score:4, Informative)
He is a living proof that crime pays.
He got millions of dollars and a great lifestyle for years and now he basicaly got free home and free meals for a number of years.
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Not in federal prison.
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She's probably going to get better offers.
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She's probably going to get better offers.
She's got all the assets she needs !
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Not if those "assets" have been repossessed! **shudders**
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It just shows how stupid this guy is. (Score:5, Insightful)
If you have an extra $10,000, buy your girlfriend new boobs.
If you have an extra $1,000,000, get a hotter girlfriend.
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Re:Crime pays (Score:5, Insightful)
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I suspect that with "good behavior" and prison overcrowding, he could be out on parole in as little as 18 months ...now how he intends to feed himself and make a living after that is another question entirely.
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He scammed 45 million dollars. He's going to retire to the Cayman Islands somewhere with the 5-6 million they couldn't account for.
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Sigh, reading fail.
He scammed 4.5 million, so he'll retire to the Cayman Islands with the 1-2 million they couldn't account for or take back from him.
As long as he wasn't a total moron at least.
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Sigh, reading fail.
He scammed 4.5 million, so he'll retire to the Cayman Islands with the 1-2 million they couldn't account for or take back from him.
As long as he wasn't a total moron at least.
He got caught and sent to prison, of course he's a total moron.
Re:Crime pays (Score:4, Informative)
Re:Crime pays (Score:4, Informative)
Is this [thebeehive.org] the life to which you aspire?
(shudder)
Sorry, but that's stupid (Score:2)
Exactly - the problem with prison time isn't just the prison time, it's wearing the scarlet letter of "FELON" for the rest of your life.
Is this [thebeehive.org] the life to which you aspire?
As opposed to half of recent college grads being unable to find full time work, according to a Rutgers University study? http://www.heldrichpodcasts.com/Chasing_American_Dream_Report.pdf [heldrichpodcasts.com]
The problem isn't "The Scarlet FELON", it's that the jobs just aren't there for anyone, unless they have in-demand skill sets. Convicted felons and half of all recent college graduates typically don't have them.
On the flip side, half of recent college graduates do have full time jobs, and convicted felons can get jobs; in b
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Re:Sorry, but that's stupid (Score:4, Insightful)
People with philosophy degrees flipping burgers for example.
I don't understand how this qualifies as underemployed...
The Rutgers study (Score:2)
FYI, that study doesn't say half of college grads are out of work, many of them have jobs but are underemployed. People with philosophy degrees flipping burgers for example.
I refer you to the part of my post where I specifically stated "in-demand skill sets".
A lot of people would dearly like to be paid to do things which society simply does not value. I know at least one tone-deaf singer who'd like to be paid to sing, but I'm pretty sure Yoko Ono has cornered the market on that, unless you count autotuning as singing, in which case I'd say the market is larger than I initially thought, but she's probably still not going to get paid. Personally, I'd like it to be my job to li
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Getting a degree in anything just proves you are intelligent, organised and motivated enough to learn how to study up to a certain level, which employers find u
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convicted felons can get jobs... they have to have in-demand skill sets
The point is that unless they are some sort of super genius specialised rocket surgeon (or something), there will always be at least one other person with the same in-demand skill sets but no conviction for theft/fraud, and it's hard to argue that away just by being good at the HR interview.
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With the money he stole he won't need a job. If he can invest (i.e. the money isn't buried in a skull island), he'll have much more when he's out.
Yes, I'm sure no one bothered trying to trace where the money had gone when they calculated the fucking restitutions he has to pay.
Re:Crime pays (Score:4, Insightful)
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Insightful.
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I know I did, and $1-2m is a lifetime's worth of pay...if he has access to that money after he gets out, that's a damn good deal, he'll never have to work again, or could have many options for starting his own business if he wants to.
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I know I did, and $1-2m is a lifetime's worth of pay...if he has access to that money after he gets out, that's a damn good deal, he'll never have to work again, or could have many options for starting his own business if he wants to.
Do you really think that the authorities worked out he stole 4.5m USD and just said "oh well, guess he must have spent it all, never mind"?
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And yet you are likely to give up far more than 4 years of your life for far less money.
You don't give up ALL your life to your work unless you're an idiot. You have to make a compromise between spending a certain amount of time doing something you'd rather not and living an even more miserable life by being poor.
Anyone over about fourteen who thinks that working for a living is the same as being in prison is just...ignorant.
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Lets see. Invest 4 years of your life to get several million dollars. I think there are a large number of people that would take that deal just to support their families.
You are assuming that this self-entitled minor criminal is also some sort of financial genius who has salted away those millions he stole in cunningly hidden, untraceable offshore investments or something. That is not impossible, but it is hardly likely.
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He is a living proof that crime pays.
No, he got caught and lost it all including his freedom. His girlfriend is living proof that crime pays.
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He is a living proof that crime pays.
He got millions of dollars and a great lifestyle for years and now he basicaly got free home and free meals for a number of years.
Plus he'll probably have more sex than he's ever had in his life, and he's practically guaranteed a great job when he gets out. Clearly, it's a win-win for him.
You really are a fucking retard.
He should've stolen billions (Score:2)
Then he simply would've received a harshly worded letter or speech from congress. Eh, like everything else, when it comes to 'justice', it all depends on who you are.
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Then he simply would've received a harshly worded letter or speech from congress
You mean like the strongly worded letter Bernie Madoff, former head of NASDAQ, got?
Man, that was stupid... (Score:5, Insightful)
...incidentally, I don't mean the theft part, which is pretty dumb on its own. What I mean is, he should have been socking that money into Cayman Island accounts (or maybe Venezuelan bank accounts and such), then get out of dodge once he hit the $2m mark or so. Get enough scratch and live in a 3rd-world country that doesn't do extradition, and you can get an entire flock of local women instead of having to throw a ton of money on just one.
Then again, dunno how much money he himself got, as the $4.5m figure could be what Cisco values the parts to be, which given Cisco's pricing could be as little as three fans and a 6509 power supply w/ SmartNet support. :p
I am curious as to WTF these guys think when they start pulling stunts like this, however. I mean, if you're gonna flirt with PMITA Prison time, you'd best be damned smart about it, do at least some research, and get your shit planned in advance...
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Even a criminal is capable of being in love with someone.
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Even a criminal is capable of being in love with someone.
Or hedonistically in love with her body.
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He wasn't in love with her body until she had all the plastic surgery done...
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Get enough scratch and live in a 3rd-world country that doesn't do extradition
Hmm I think Gottfrid Svartholm [slashdot.org] tried that approach and you can see where it got him.
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I doubt he planned this advance. He probably ordered a part that they ended up not needing, Verizon got billed for it, he ended up with it and sold it. Then he just sort of kept doing that.
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It sounds stupid because you don't hear about the guy who got away with it.
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We had something similar (Score:3)
We had a Department of Corrections employee (for the state) who bought $123,000 worth of IT equipment then sold it on eBay for $54,000.
Obviously he was caught when the audit was done. So far, no comment from his attorney.
Girlfriend Changelog (Score:5, Funny)
cosmetic surgeries for his girlfriend
Just HOW MUCH does it cost to modify a blow-up doll?
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Apparently it's somewhat pricey [realdoll.com]. Although $2.3 million is easily enough to order the most depressing harem in history!
Enhanced girlfriend (Score:2, Funny)
"multiple cosmetic surgeries for his girlfriend" (Score:2)
Boob job, nose job, vaginoplasty?
Probably all three. She should have to "return" them as well if she knew about the fraud or spend time in jail.
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Pics or it didn't happen!
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multiple cosmetic surgeries for his girlfriend
It would probably have been cheaper to just get a better looking girlfriend.
Girlfriend...? (Score:2, Offtopic)
Cosmetically enhanced girlfrield? (Score:2)
What a stupid (Score:2)
reason to put someone in prison.
There are better ways to punish and develop corrective measures.
Something missing here (Score:2)
I have been doing this same procedure with Cisco for years an years, When a card breaks in the feild and you do a RMA on that part (which can happen allot if you have lots of gear) you get the new replacement part in the mail right away, you then have a certain amount of time to return the old bad part.
If Cisco does not receive that part in a certain amount of time they will be contacting your boss or someone until they get that part back.
I have had Cisco say I did not return a part that I did return and fi
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Yes but this is stolen gear, and I have never worked for a company that did not have service contracts on all the gear they have with live customers on it.
It would ne hard for a bigger company to tell its employees to not open a ticket on certain gear because its stolen.
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He did pretty well, actually (Score:2)
A $4.5 million dollar scam. Restitution of $2.3 million to Cisco, $462,828 to Verizon. So that makes his net profit approximately $1.75 million. He'll be in prison for 4 years. Probably out in 2 with good behavior but let's say he does the full 4. That's $1.75 million / 4 = $435,000 a year. Not bad.
I'd hardly call that a deterrent to crime. Hell, he's currently more profitable than the company I work for.
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Except it would be unlikely he got full price reselling things. And his future earnings are going to be significantly impacted as well.
This is not the first hit on Verizon... (Score:5, Interesting)
Verizon has been targeted many times. They would steal network equipment, then call Cisco to get an advance replacement RMA, which would take their stolen equipment and double it. Then they would sell the gear on the 'Grey Market' for Cisco hardware. They focused primarily on Cisco 12000 line cards, where an individual card sells for $100k+ and are installed in a redundant fashion.
Then they started just getting serial numbers for equipment and starting RMA's for that, and selling it on the Grey market. When Cisco called to get the status on the return... Verizon would reply with "what return".
I helped track one of these cats back in early 2000's - once he found we were hot on his trail, he abandoned his Bentley, and his Mansion and fled back home to Russia - where he lives currently. Interestingly, this same type of scam popped up in eastern Europe shortly after his relocation.
Our suspect had a friend who worked in security at one of the Verizon data centers. He would grant 'back-door' access to a facility, and permit the theft of the hardware. Stories abound of this guy being too poor to buy gas one day, borrowing $50 from friends in order to make to to the airport to fly out to New York then from New York to California, then California back home - pulling a massive roll of C notes from his pocket and repaying the $50 loan + a couple of C-notes to show his gratitude.
Perhaps the reason we hear about this happening with Verizon was that they became aware of the scam early, then kept tracking the perps until they were finally able to catch them. Kudos to Verizon Security for being able to close the loop on this one. These cases are extremely hard to track and crack.
http://www.nytimes.com/2004/11/27/nyregion/27theft.html?_r=2&ex=1152936000&en=28ee4e10417b8e50&ei=5070&oref=login [nytimes.com]
http://www.zdnet.com/level-3-falls-victim-to-data-centre-robbery-3039284520/ [zdnet.com]
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Verizon has been targeted many times. They would steal network equipment, then call Cisco to get an advance replacement RMA, which would take their stolen equipment and double it. Then they would sell the gear on the 'Grey Market' for Cisco hardware.
How the hell does Cisco not noticed that RMA'ed equipment never seems to show up? At $100k+ a card someone at Cisco should have gotten reemed for not doing their job.
Re:This is not the first hit on Verizon... (Score:5, Insightful)
Well, if a piece of Cisco network equipment goes down that is covered contractually, they must ship a replacement. With a company as huge as Verizon, there are parts being shipped out *all* the time, and defective parts shipped back *all* the time. If you have 30 days to ship parts back, and the parts don't come back, the procedure is to initiate emails, then escalate from there. Quite often, Verizon gets involved trying to track down the missing parts, trying to solve the mystery - and never is able to resolve the issue until they see a pattern emerge and start to investigate.
The problem is that when conducting business, you must assume that your counterpart is working with you in good faith. In this instance, you have a man-in-the-middle who is transacting the business and defrauding both parties. It takes some time to find that 'leak', especially when you are doing billions a year in network gear, and RMA's of 10's of millions, and this person is doing fraud in the range of 100k+/yr. Then the person doing the fraud is using disposable phones, disposable numbers, and so tracing the fraud down after-the-fact is even more difficult.
His only mistake... (Score:3)
$4.5M or $2.8M (Score:2)
The Slashdot title says $4.5M, but the article it links to says $2.8M
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Wow. Just more uninformed people on /. (Score:3)
The prison time is only PART of the sentence! " Baxter was sentenced to 4 years in prison to be followed by 3 years of supervised release, and ordered to pay $2.33 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon."
Nearly $2.8 million to pay back off of the $2.8 million they say he stole. I am guessing that he doesn't have ALL of the proceeds from his caper.
IF he gets minimum security Federal Prision Camp, he will likely go closest to home. FCP Montgomery. http://www.bop.gov/locations/institutions/mon/MON_aohandbook.pdf [bop.gov]
Don't sound like 4 years of fun to me. In any institution or camp there is going to be a heirarchy. This guy is none of the things that are going to make his life in "camp" fun. He is not rich! He may be a tough bird, but he is an old bird at 62. All those ailments that get treated outside of "camp" are going to go untreated. No more private doctors. Dentists that only pull teeth. Hey, maybe he can get one of the best jobs there and make $1.46/hour.
Neither Cisco or Verizon lost their lives or were even traumatized by his actions. However, they need a sentence that works as a deterrent, which this is.
Punishment fits the crime.
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I have seen different $ amounts reported of his haul. $4.5 and $2.8 I don't know which is more accurate. Suffice it to say that they got all his property and accounts. Maybe that Cayman Islands or Isle of Man account survived, but I doubt it.
Will She Wait? (Score:2)
Or will she go find another Sugar Daddy?
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You don't know anything about federal prison. Some of them can be brutal.
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Threatening someone else's life at gunpoint in 60 seconds is completely different than stealing $2.8 mil over the span of a decade.
But I think you're seeing in terms of theft of $20 vs. $2.8 mil.
I think terrorizing someone else is worth at least several thousand dollars in therapy. For some people it takes years to trust another human being again. Others never recover. But if you're a tough guy, you can carry on like it's no big deal. For Sprint and Cisco, $2.8 mil is a drop in their financial bucket.
Re:What kind of prison? First? (Score:4, Interesting)
I've heard the argument made and I disagree. Yes, threatening someone with a weapon causes some very real emotional distress, but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives. These "harmless" white collar crimes that involve millions of dollars have the power not only to affect far more than just one person, but to put them through years of anguish. One robbery might scare a clerk shitless for 10 minutes, one mortgage scammer can affect thousands of people, destroy their health, end their marriages, and put their families on the street without ever seeing the victim face to face. At least most robberies are committed out of desperation rather than a sense of greed and entitlement.
Re:What kind of prison? First? (Score:5, Insightful)
but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives
You're experiencing selection bias. It's hard to meet people who have been killed in robberies.
If you cause a violent confrontation, there is real risk someone gets seriously hurt or killed. They could certainly be injured in a manner that costs society far more than $2.8 million in medical treatment costs over the life of the victim.
If you steal some equipment, there's a financial loss, but no one is going to get hurt.
Discouraging people from creating violent situations is far more important than discouraging people from stealing from companies with insufficient controls.
I'm far more worried about a guy who might point a gun at my head when I'm trying to pick up some milk than I am a guy who is going to steal some hardware when I'm not looking.
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It's easy to see at the extremes.
Imagine a world with twice as much property theft and zero violence. Imagine a world with twice the violence and zero property theft.
Which would you rather live in?
Re:What kind of prison? First? (Score:4, Insightful)
I'll take zero violence and double property theft any day of the week.
You can always buy more stuff. Death is permanent.
Re:What kind of prison? First? (Score:4, Insightful)
If you steal money, you can be ordered to pay restitution. (Granted, I doubt Baxter will be able to pay that kind of fine.) If you kill someone, you can't unkill them.
Honey... (Score:5, Funny)
Verizon called. They want their boobs back.
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Punching someone in the stomach and taking a few quid in cash may be hugely less damaging than stealing all their money in a fraud and bankrupting them
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It is very dangerous to start labelling some crimes as victimless.
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The end result was that the hard working IT guys had a big piss-up for free
You appear to have misspelled "self-entitled, dishonest fuckbags"
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"never recover [from an armed robbery]"
You have to be joking, and either way it is not the robbers fault if someone is so sensitive that 60 seconds with a complete stranger who never touches them can lead to permanent psychological damage; They were going to live a horrible life no matter what.
Quite how anyone who is capable of turning on a computer, connecting to the internet, setting up a slashdot account, and writing in sentences can be so moronic is hard to fathom.
Re:What kind of prison? First? (Score:5, Insightful)
If he'd held up a convenience store he could easily have gotten 7 mandatory or more
If he had been the company president and a big political contributor, some poor tech way down the ladder would be facing charges instead. If he was a higher up at Goldman Sachs, he would be given a cabinet position at the white house.
The guy committed fraud, hardly worth locking him up. Just take his property and garnish his income for the rest of his life, or until the money is paid back.
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Agree fully. Why put people like this in jail? Put them in indentured servitude instead. He could be put to work in a homeless shelter, making minimum wage. That way he can pay for his own upkeep AND be a benefit for society.
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Agree fully. Why put people like this in jail? Put them in indentured servitude instead. He could be put to work in a homeless shelter, making minimum wage. That way he can pay for his own upkeep AND be a benefit for society.
You could say the same for any criminal. Even violent criminals like murderers could be allowed to avoid jail by doing useful work instead, as long as they were closely monitored.
It's amusing here on slashdot how as soon as a crime becomes computer related, everyone starts getting all "there but for the grace of God go I" prison-reformy, where otherwise it's all about shooting the perps dead like rabid dogs.
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Why make him work somewhere for minimum wage? - that is stupidly inefficient. He should be made to work somewhere for the maximum his skills can demand - so that the debt he owes can be repaid sooner. The quicker the repayment, the less harm the theft will cause.
Er, I think the idea is that the criminal only gets minimum wage and the excess is used to pay off the debt. Obviously, if the guy is living in society he has to have some money for food, shelter, clothes etc. I think what you would actually do is work out the bare minimum needed and give him that at a flat rate each week, with no extra for entertainment or whatever.
Logical Flaw (Score:2)
If he had been the company president and a big political contributor, some poor tech way down the ladder would be facing charges instead.
If you are going to claim that how do you know it did not happen in this case and he isn't the "poor tech way down the ladder"? You claim this as a viable possibility and then immediately dismiss it out of hand for this case which suggests that you don't really believe it is a sensible possibility (which I would tend to agree with). There is clearly a problem with accountability at the top of large corporations, especially the banks, but they seem to get away with their behaviour because nobody holds them
Re:What kind of prison? First? (Score:5, Insightful)
Federal != "white collar". Minimum security == "white collar". My friend's brother got a ten year sentence in Federal prison for loaning money to a dope dealer (as did half his HS graduating class; dealer got busted and set up everyone he knew whether or not they'd ever had anything to do with drugs, dope dealer spent 2 year in Club Fed). Mike's brother was out in five years, and his life was completely ruined. He was a diesel mechanic who worked on big rigs, but of course lost his job. His wife met another man while he was in prison and divorced him. So he's now unemployable and single with few prospects of ever having another woman.
"Chickenshit sentence"? I hope I've left you a little less ignorant.
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Well prison is mostly for violent crimes. So that sentence makes sense to me.
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