Elizabeth Holmes just took the stand in a landmark white-collar case in which she is the chief defendant. For those unable to keep up with the many criminal cases taking place simultaneously, Holmes is on trial as the former CEO of Theranos.
Theranos is a bogus company that claimed to revolutionize blood work procedures while falsifying claims about their technology and lying to doctors, shareholders and employees alike. If found guilty of conspiracy to commit wire fraud, she could face up to 20 years in prison.
But Holmes is just one example of a white-collar criminal facing serious punishments for their crimes. Unfortunately, examples of companies or individual criminals being held accountable are few and far between. On the whole, prosecution of white-collar crime has decreased in the last decade while crimes themselves have gone up or at least remained steady, a stark contrast to the way blue-collar criminals are treated in the U.S.
Tanya McDowell spent five years in prison for lying about her address to send her son to a better school district, while not one member of the Sackler family, owners of Purdue Pharma, were found guilty of criminal charges regarding aggressive marketing of Oxycontin. Their actions caused the deaths of 500,000 people over 20 years and yet they have had no criminal charges brought against them.
But the evidence is not just anecdotal. In January 2020, only 359 defendants were charged, while in 2010 and 2011 the indictment rate was more than 1,000 a month. “Cases of federal fraud rose by 15 (percent) in 2019, while losses incurred due to fraud rose by 80 (percent) for the same time period,” according to Bajoka Law Group.
The Department of Justice disputes claims that prosecutions have decreased, but the data used in recent studies obtained through the Freedom of Information Act requests speaks volumes. In the absence of prosecution, financial crime has flourished.
The reason for this inverse relationship between financial crimes and their prosecution is a matter of speculation, but public opinion is not one of them. Historically, low prosecution of white-collar crime has coincided with positive public opinion of corporate activity, but in 2021 a national survey revealed that, “the public has a deep concern with increasing the apprehension and sanctioning of white-collar criminals.”
People want white-collar criminals to be held accountable. Suffering through the 2008 financial crisis and waiting indefinitely for prosecutions of the financial misconduct that led to the collapse of the housing market has embittered the nation. That said, incarceration of white-collar criminals may not be the answer.
Financial crimes should be punished by significant financial penalties. Currently, financial punishments for those that violate the law from corner offices are a slap on the wrist — the cost of doing business. Small punishments coupled with decreased prosecution creates an environment where rich criminals are not held responsible.
The decreased prosecution of white-collar criminals can potentially be attributed to the laissez-faire policies of the Trump Administration, but that is an easy out. Prosecutions rates took a dip well before the former President Donald J. Trump ever took office.
Transactional Records Access Clearinghouse, the organization who put out a report on prosecution of white-collar crime, claims that the decrease in prosecutions can be attributed to decreased funding of the Internal Revenue Service. If you cut funding for organizations responsible for investigating white-collar crime, naturally, prosecution rates will decrease.
All this is to say the mechanisms of criminal justice are broken. Those who can afford it get away with heinous crimes. Holmes might be found guilty, or she might not, but in either case she is already a minority: a white-collar criminal brought to trial.
The Department of Justice cannot deny claims that they have dropped the ball on white-collar prosecutions. They have to provide the country with an action plan to ramp up investigations and common sense punishments for financial criminals, be it fines or loss of licenses.
Current Deputy Attorney General Lisa Monaco has announced an increased focus in the Department of Justice on corporate crime, but they must follow through on these claims. We, as voters, have to hold the current administration accountable for reducing white-collar crime and making sure that disparities in punishment between the rich and the poor decrease.
We might be powerless to prosecute these companies, but we can make a difference in the way we vote. Taking money out of politics and criminal justice is no small feat, and any changes will have to be incremental, but it all starts with your vote.
Finding candidates with no ties to corporate donors is a challenge, but, candidate by candidate, we can vote for individuals who support fair punishment for those who misuse their financial power.
The Daily Targum's editorials represent the views of the majority of the 153rd editorial board. Columns, cartoons and letters do not necessarily reflect the views of the Targum Publishing Company or its staff.