ALT “The approach of US prosecutors to fraud is always negotiate a settlement. They don’t want a trial. Upshot is the institution has to pay a fine, sometimes in 100,000,000s but they don’t actually admit to criminal liability. Their lawyers say they won’t contest the charge, but if they pay, they haven’t technically been found guilty of anything.” “So if the government discovers Goldman Sachs or Bank of America has committed fraud they effectively just charge them a penalty fee.” “That’s right.” “So the question is: has there ever been a case where the penalty was more than the amount made from the fraud itself?” “Oh no, not to my knowledge. Usually substantially less.” “What are we talking here, 50%?” “More like 20–30% on average. It varies considerably.” “Doesn’t that effectively mean the govt is saying you can commit all the fraud you like, but if we catch you, you’re going to have to give us our cut?” “Well obviously I can’t put it that way myself as long as I have this job…”