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Bagging the big boys

Bagging the big boys

by Rick Turoczy on March 19, 2005

As sagas of fraudulent behavior at several major corporations unfolded over the last few years, one common if cynical refrain was, “They’ll never get the big guys who caused all this.” That refrain only grew louder when it became clear that billions of dollars in stockholder equity had vanished into the night, along with the jobs and retirement savings of thousands of ordinary workers. The cynical refrain even had its own little epilogue: “Even if they do nail those crooks, the bad guys will get off with slaps on their wrists. Robber barons always do.”

The “they” in this refrain – federal prosecutors – have proved the skeptics wrong. Their successful prosecution of former WorldCom CEO Bernard Ebbers, who was convicted Tuesday on charges that he orchestrated the $11 billion fraud that brought down his company, is just the latest heartening proof that cynicism doesn’t always yield good predictions.

In case after high-profile case, prosecutors aren’t fishing for small fry – or letting big fry off their hooks. They have charged those at the very top with serious crimes. Then they have set out to prove their complex cases to juries. In the cases of former Tyco CEO Dennis Kozlowski and former Credit Suisse First Boston investment banking star Frank Quattrone, they have made repeat efforts to enforce the law as they read it. Quattrone’s first trial on obstruction of justice charges ended in a hung jury. He was convicted in his second trial and sentenced to 18 months in prison. Kozlowski’s first trial on charges he looted his company of some $600 million ended in a mistrial. His second trial is under way.

Bagging the big boys

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