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April 2, 2009

Good timing for a message-sending tax fraud sentence!?!

As detailed in this AP article, a federal district judge "saying he wanted to send a message to "quick-buck artists," handed down stiff sentences Wednesday to two former executives and a lawyer with accounting firm KPMG for helping rich people evade more than a billion dollars in taxes."  Here are more details:

U.S. District Judge Lewis Kaplan sentenced former KPMG executive John Larson to more than 10 years in prison; a fellow executive, Robert Pfaff, received more than eight years. 

The judge said Larson, 57, and Pfaff, 58, were "centrally involved" in the brazen tax shelter scheme "that didn't pass the smell test from Day 1." He gave lawyer Raymond Ruble, 63, a term of 6 1/2 years in prison.  The judge said he hoped the sentences "will say to quick-buck artists, 'Not so fast.'"

The men were convicted in December of multiple counts of tax evasion.  The government alleged they used tax shelters marketed by KPMG LLP to help wealthy clients make it appear they sustained large tax-deductible losses by getting loans for business ventures when they had not.

I do not know if this sentencing was consciously scheduled to come only two weeks before federal income taxes are due, but it does seem like an especially good time to send a message to would-be tax cheats.

April 2, 2009 at 09:52 AM | Permalink

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Comments

What is the social value of a life, i.e. to others? I think it should be average lifetime wages, for example, $50,000 times 50 years or $2.5 million. Economists take a market value approach. That comes out to $6 million. They ask, a job at McDonalds takes the same skill level and training as one on a oil rig. A job on the latter has a much higher death rate. What is the salary increase required to get people to work on an oil rig over a job at McDonald's, i.e. the market premium for the higher risk of death.

Let's accept the higher value, $6 million. That represents an economic life's output. By stealing or destroying more a value greater than that, one has murdered an economic person, the output of a lifetime. One should be executed for any crime causing more damage than $6 million for the murder (first degree) of an economic person.

Posted by: Supremacy Claus | Apr 2, 2009 6:19:26 PM

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