With a 20-to-1 return, pursuing fraudsters in court is a no-brainer
Posted on: 12.11.2009 1:29:42 PM Posted by Rob Garver
A point made in a Senate hearing this week by Judiciary Committee Chairman Patrick Leahy (D-Vt.) bears repeating: when the United States government goes after financial fraudsters, every dollar it invests in criminal fraud litigation returns $20 in asset recovery.
Putting aside the irony that the government stands to reap Madoff-like returns from prosecuting the likes of Madoff, this is a point that should be taken to heart by both the government and the public sector.
Sen. Leahy's figures, drawn from a Department of Justice study, drive home the importance of pursuing the assets of financial fraudsters. The compensatory benefit to fraud victims of seizing and returning assets taken by fraudsters is unquestioned. But there are benefits that extend beyond simply making victims whole — or as close to whole as possible.
Vigorous efforts to trace and recover the assets of criminals increase the "cost" of crime to the criminal actor. A potential fraudster who knows that, should he be caught, the government will exhaust every effort to trace his funds and recover them is going to be less likely to swindle others than a potential fraudster who expects to be able to secrete assets offshore with little chance of losing them.
The 20-to-1 ratio that Sen. Leahy mentions is not the only reason to pursue the assets of fraudsters, but it certainly strengthens the argument that doing so is a worthwhile investment.
