January 29, 2009
Dutch white-collar sentencing in accounting fraud show continental contrast
In China, corrupt executives can get the death penalty, and decades of prison time were handed out to CEOs convicted of fruad like Bernie Ebbers and Jeff Skilling. But, as this Reuters story indicates, sentencing outcomes are much different on the continent:
The Amsterdam appeals court sentenced three former executives of Dutch supermarket group Ahold on Wednesday to suspended sentences and fines over an accountancy fraud revealed by the company in 2003. In the Netherlands' biggest ever corporate accountancy fraud, Ahold had revealed massive bookkeeping irregularities at its U.S. Foodservice business and other foreign subsidiaries, overstating profits by almost 1 billion euros ($1.3 billion).
Former Chief Executive Cees van der Hoeven was sentenced by an Amsterdam appeals court to pay a fine of 30,000 euros, while former Chief Financial Officer Michiel Meurs was given 240 hours of community labour, a fine of 100,000 euros and a six-month suspended sentence. Former management board member Jan Andreae was given a three-month suspended sentence and a fine of 50,000 euros.
As this AP account explains, the appeals court ruling here involved cutting the (slightly) more onerous sentence that had been handed out by the trial court.
January 29, 2009 at 08:05 AM | Permalink
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The details you give don't seem like they would be terribly relevant in a US sentencing context. How was the stock price effected? Did the fraud kill the company?
Take the recent example of AIG, there was fraud, but the company survived it (afaict what prompted the government takeover was unrelated to the re-insurance matter). So far the participants have not received sentences in the 20 year range.
Posted by: Soronel Haetir | Jan 29, 2009 8:24:17 AM
That'll teach 'em!
Posted by: Anon | Jan 29, 2009 9:36:44 AM
What I think that people often miss in such comparisons are the cultural differences. The European scheme is much more preventive in nature. Some call it socialist or statist or whatever, but the perception is that the best why to deal with crime is to prevent it from happening in the first place, unlike our more freewheeling country. Further, there is a much greater sense of social approbation to these types of crimes. While not as harsh as say Japan, there is a heavier social shame associated with these types of crimes than there is in America.
Did I just imply that America is a freewheeling, shameless country. Yes, I did. Is that good or bad; it's both. I just don't think you can rip these sentences out of their cultural context, that's all.
Posted by: Daniel | Jan 29, 2009 12:06:59 PM
Glad to see that in Europe they understand that white-collar crime is perhaps one of the few areas of crime suceptible to effective deterrence.
Posted by: DM | Jan 30, 2009 1:05:00 AM