Poorly arranged swaps cost Philadelphia perhaps $186 million, city treasurer Nancy Winkler told City Council members at a 2012 hearing. When Councilman Jim Kenney asked who should be punished, Winkler noted that Rubin and his staff "were convicted and are mostly either in prison or awaiting sentence."
But Rubin won't end up behind bars. Though he pleaded guilty in 2011 to crimes prosecutors said should have gotten him sent away for years, he was given probation and fines by U.S. District Judge Kimba Wood, whom President Clinton had wanted to make the U.S. attorney general.
Judge Wood appears to have been swayed by Rubin's claims that he evolved from a greedy thief corrupting our democratic institutions, into a public-spirited citizen who ratted out his former employees and their contacts at a Swiss bank, some of whom got prison sentences (while JPMorgan and other Wall Street banks Rubin did business with agreed to civil penalties) - and that prison would be tough on Rubin's family. Wood said she's convinced Rubin is really, truly sorry.
Rubin may be lucky that federal authorities in Philadelphia didn't find, or didn't try too hard to find, that he broke the law here.
Last week, Andrew Bogdanoff, who headed small-business-loan broker Remington Financial Group, was sentenced by U.S. District Judge William H. Yohn to 18 years for ripping off 2,000 small-business owners across the country of fees they paid for loans that Bogdanoff couldn't be bothered to book for them while he was spending their money living high.And earlier this month, federal Judge Paul Diamond overrode defense arguments that Michael Pouls, who pleaded guilty to stealing millions from banks (one later failed), deserved leniency because he's sorry, has a nice family, was successful, and meant to give it back.
Diamond gave Pouls eight years.
Pouls might have been stopped long ago, New Jersey investigator Robert Bugai tells me, if criminal prosecutors had pursued past complaints, the subjects of civil suits, and college-publication articles suggesting that Pouls' previous credit-card-solicitation business was ripping off workers and clients.
America will have career white-collar criminals as long as it fails to put them away, Bugai says.