[ludocode]

I absolutely believe he should go to prison. If a fine is the only punishment for a crime, then that law only exists for the lower classes. The only way to punish a rich person and deter other rich people from crime is to take away their freedom.

[philwelch]

This isn't necessarily true in the general case, let alone in this specific case.

In the general case, some countries calculate fines according to the criminal's income for this very reason.

In this specific case, fines or, in the case of a civil lawsuit, damages in excess of the amount of money the person illegitimately gained would be sufficient.

[ludocode]

Fines as a percentage of income do not solve the problem. If I'm a poor person living paycheck to paycheck with nothing left over for savings, a 5% fine would be devastating. If I'm a rich person living off of (debt secured by) my investments, a 5% fine, even if it's hundreds of thousands of dollars, is pocket change compared to my true income and wealth.

A fine is obviously not sufficient given how widespread this practice is. If the fine is double what you gained but you are less than 50% likely to get caught, logic dictates you should commit the crime. Again, prison is the only deterrent that works on the rich.

[philwelch]

Follow-up point I forgot to add:

> If the fine is double what you gained but you are less than 50% likely to get caught, logic dictates you should commit the crime.

It turns out that people’s decisions whether or not to break the law have very little to do with any rational economic calculation about the probability of being caught. Consider how shoplifting is basically not enforced in San Francisco anymore. People just steal things from the store in broad daylight and nobody bothers even trying to stop them. Sure, this does result in a lot of shoplifting, but the question is, why does anyone bother paying when they could just brazenly take their desired merchandise out the door with no risk of ever facing any consequences?

[philwelch]

> If I'm a poor person living paycheck to paycheck with nothing left over for savings, a 5% fine would be devastating.

If you’re a poor person living paycheck to paycheck with nothing left over for savings even after committing enough white collar crime to be convicted in a federal court, I am really curious what you did with all the money.

People always think the old saying “an eye for an eye” is brutal and vindictive, but originally it was about proportion. An eye for an eye means that if someone takes your eye, you can be satisfied by taking their eye in return instead of taking their life. In that vein, I think fines are extremely just for financial crimes.

[Phillip98798]

Aren't there better targets to make a point with though? Military contractors, oil companies? We're talking about billions of dollars in bribes. Do you think this case will even put a dent in that corruption? This is not a lot of money and as the popularity of this thread insinuates, this is how things have always been. There is no Silicon Valley without these types of deals unfortunately.

[vkou]

The best target to make an example of is the one you caught.

[bogwog]

Imagine if it was only a fine: say, 90% of all your money/assets. That sounds like a crazy gamble, but people gamble money all the time. Lots of people would be willing to take that risk.

But prison time scares everybody. You can't get those years back, no matter how wealthy you are.

[Phillip98798]

I hear that. I just wonder what exactly it is we're accomplishing here in terms of justice. More corporate compliance and fear? Where is the line going to be drawn? Hyperbolic perhaps, but what's to stop the law from going after salaried people with side projects? Oh, you visited the stackoverflow career page during your 9-5? That's fraud. I'm exaggerating, but the precedent is there. Cases like this can create a slippery slope to complete subservience to big corporations.

[bogwog]

> Oh, you visited the stackoverflow career page during your 9-5? That's fraud. I'm exaggerating

So you're saying that what this guy did isn't clearly fraud? I don't see how you could say that, unless you misunderstood the situation. It is, very clearly, 100% fraud.

In addition to the money Netflix was paying him as part of his salary, he was also secretly taking a cut of the money flowing to contractors.

It's like when a government sends aid money to another government after a natural disaster, but all the corrupt officials steal it so that eventually there's very little left for the original purpose.

[Phillip98798]

Outside SV, I have friends in manufacturing. They tell me stories like this all the time. They have to get this executive on their side to win this deal or that deal. I wouldn't dare try to defend the morality of it, but this is capitalism right? I personally believe the corrupt officials example you bring up is much worse than this though. One is often a life and death situation and the other is about protecting the interests of a successful multi-billion dollar corporation.

[bogwog]

> but this is capitalism right?

Nope, just fraud. If a contractor makes a deal with the company, that's perfectly fine, normal capitalism. If they make a personal deal with an executive who is supposed to be representing the company in negotiations, then that's straight up bribery.

Capitalism certainly motivates people to commit this type of fraud, but that's why we have laws and regulations. Unregulated capitalism doesn't work.

I'm not saying it doesn't happen, or even that it isn't common (this whole comment section suggests that it's quite rampant), just that it's clearly wrong, both from a moral point of view, and because it can cause damage to shareholders. It can even hurt the larger market and society because it means that a company with a superior product/service/innovation will fail because their competitors aren't playing fair.

> the other is about protecting the interests of a successful multi-billion dollar corporation.

It's about protecting shareholders. What would the economy look like if the government didn't make an effort to prevent fraud? Investors wouldn't want to invest, companies wouldn't be able to find funding, etc.

[philwelch]

Judging by how many people end up there, prison time does not seem to be a particularly effective deterrent either.