What is the appropriate punishment for financial crimes?

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  • #617436
    gavra_at_work
    Participant

    If the government wishes to punish someone for stealing from it, what is appropriate?

    I’ll start by pointing out that in the days of a King (which Pashtus the government has a similar din), stealing from the Crown was punishable by Death, even in Denei Yisroel (as a Mored B’Malchus).

    #1143353
    EretzHaK
    Member

    According to the piskei halacha, the butei dinim retain jurisdiction over klal yisroel even if chutz l’aaretz, in non-Jewish lands. Before the enlightenment this was recognized by most European governments which authorized the kehila to enforce crime and punishment in the Jewish community. This halacha didn’t change with the enlightenment and thus we aren’t permitted to turn our own over to the secular government.

    Rav Moshe in Orach Chaim 5-9,11 and Choshen Mishpat 1-8 says you can’t support or have a Jew punished by the secular authorities because they administer a punishment in excess of halacha. So to answer your question, if a Jew steals his punishment should be as specified in halacha.

    The sheva mitzvos mandating the goyim establish a court system applies to them to establish it to administer justice among themselves. They do not, in the eyes of halacha, obtain jurisdiction of the Jews in their lands.

    (Any response to this comment should include addressing the psak halacha from Rav Moshe.)

    #1143354
    gavra_at_work
    Participant

    EretzHaK – That only applies when a Yid has a financial crime against another Yid (which is the case of Rav Moshe), and only when you can fix the situation in Bais Din (as Rav Moshe explicitly states). When the crime is against the US government (or an Aino Yehudi), none of that applies.

    Besides, you haven’t addressed the Mored B’malchus aspect, which is (hypothetically) outside the jurisdiction of Batei Dinim.

    #1143355
    zahavasdad
    Participant

    They stole from the government, And we do not know who turned them in. Maybe it was just a government audit that discovered it or some reporter.

    #1143356
    EretzHaK
    Member

    gavra – halacha has provisions specifying what the penalties are for wronging an aino yehudi. As a rule of thumb, the penalties are more severe when the wronged party is a member of klal yisroel.

    The Mored B’malchus question is interesting that I don’t know offhand. Rambam probably discusses it. I’m doubtful that if a Jew is Mored B’malchus against a non-Jewish monarch/government if halacha gives the non-Jewish government jurisdiction to punish him according to their own laws, however severe they may be. I suspect that halacha has its own specifications, even in such a case, what the penalty is.

    #1143357
    zahavasdad
    Participant

    The government doesnt care what the Halacha is for stealing from a non-jewu. I can pretty much gurantee they are not using Choshen Misphat to decide how to punish these people

    #1143358
    gavra_at_work
    Participant

    gavra – halacha has provisions specifying what the penalties are for wronging an aino yehudi. As a rule of thumb, the penalties are more severe when the wronged party is a member of klal yisroel.

    But first you have to decide jurisdiction. I have not seen a source (including Rav Moshe) that says Bais Din has jurisdiction when the argument is between a Jew and non-Jew. My understanding is that secular court would have jurisdiction.

    As far as Mored B’malchus, I’m willing to allow you time for research. 🙂 Let us know what you find.

    #1143359
    nfgo3
    Member

    Financial crimes should be punished in a way that assures that financial crimes do not pay, whether the victim is the government or private citizens. The punishments should also deter others from engaging in similar crimes. I think our sentencing system is harsh on crimes of violence, but too lenient on financial crimes, as the perps are typically respectable-looking middle- or upper-class people.

    #1143361
    EretzHaK
    Member

    nfgo3 – if you think that the secular laws and sentencing system are too lenient on financial crimes then you’re disagreeing with the Torah. Because the Torah’s penal system for financial crimes is way more lenient than the secular system.

    gavra – My understanding is that halacha recognizes Bais Din as having jurisdiction even on a dispute between a Jew and a gentile. But like you, I don’t have a source offhand for that point, though such is my strong recollection.

    #1143362
    zahavasdad
    Participant

    My understanding is that halacha recognizes Bais Din as having jurisdiction even on a dispute between a Jew and a gentile

    It doesnt matter if halacha says this or not, There is no way the Government will accept this position. You can get every gadol to agree with you, but the DA will never agree to this and there is nothing you can do about it. And this is not a dispute between a jew and a gentile, Its a case where the government accuses a jew of breaking a law. That was not aimed specifically at jews, Everyone has to obey this same law.

    #1143363
    nishtdayngesheft
    Participant

    There as an article recently in the WSJ about how difficult it is to not be in violation of one federal law or another and how ridiculous and unfair some of the laws are.

    The article was From February 16.

    A couple of quotes which should give pause to everyone:

    Pleasant isn’t it?

    And we all know how Sholom Rubashkin was charged and sentenced for not paying his beef suppliers the same day. A regulation that had never before been enforced.

    I am sure that here are bloggers who spout tears over any of these stories, unless it was a Yid. Then the dina dimalchuse chanting comes out.

    And cries of how bad these Jews are for making a chilul hashem.

    #1143364
    EretzHaK
    Member

    zahavasdad – A relevance is that if the government acts in a manner halacha deems incorrect, we halachicly cannot assist or even support the government doing that.

    #1143365
    nishtdayngesheft
    Participant

    “They stole from the government, And we do not know who turned them in. Maybe it was just a government audit that discovered it or some reporter.”

    They stole from the government? And you know tis how? If this was a fact, would there not have been arrests?

    From talks I’ve heard from the AG and from conversations with investigators, the overwhelming majority of any case or investigation (other than perhaps violent crimes) cames from complaints, real or otherwise.

    I know people who have been harassed by meshugaim calling in some alleged complaint to a government agency, which then decides it has to “investigate”. You don’t like a charity or someone who works, a quick call to the Attorney General’s office with some trumped up complaint or allegation will cause tremendous hardship and cost.

    The costs to the harassee are huge even though there is no case. I have seen this happen more than once, where I know the exact details.

    #1143366
    zahavasdad
    Participant

    Funny those who wag the finger the most suddenly claim we should seek the best in all when the finger is wagged at them

    #1143367
    lesschumras
    Participant

    Nisht, wasn’t Rubashkin convicted of defrauding a bank out of $34 million, partly by using phony invoices?

    #1143368

    My understanding is that what he did was accepted in the business world, and they got him on a technicality.

    #1143370
    nishtdayngesheft
    Participant

    ZD,

    I assume you are taking to yourself, you being a serial finger wagger and flip flopper.

    #1143371
    lesschumras
    Participant

    DY, defrauding a bank is not accepted practice as far as I know. He ovestated the company’s value in order to qualify for a revolving line of credit.

    #1143373
    nishtdayngesheft
    Participant

    Lesser,

    No they didn’t. If he defrauded the bank, don’t you think the bank would have pressed charges?

    He was making the payments on the lines of credit. The loans went bad when the government, on allegations of immigration and child labor violations interrupted the whole business. Allegations for which he was never found guilty and in fact some were so baseless, they were expunged.

    Just another proof of how false allegations can destroy a person, family, community and business.

    #1143374
    Avi K
    Participant

    EretzHaK, see Rav Bleich’s article ‘Capital Punishment in Noahide Law” in “contemporary Halachic Problems” vo. 2. There he discusses the issue of the jurisdiction of non-Jewish governments over Jews in criminal cases. In any event, according to Rav Schachter a democracy is a partnership between all citizens, Jews and gentiles so it would seem that all would agree that it has the power of mishpat hamelech. Please cite sources for the greater severity of punishment in harming a Jew (and note the Meiri’s well-known exception). In an ycase, according to Rav Schachter one who steals from a democratic government also steals from Jews. The should be obvious as all taxpayers are harmed.

    As for the appropriate punishment, it depends on the crime. Someone who evades $1,000 in taxes should be fined although he probably is not worth the trouble and expense of trying him. For someone like Madoff or Shalom Weiss who ruined people’s lives a symbolic death penalty such as they received is totally appropriate.

    The place of the battei din in all of this is educational due to the enormous chillulie Hashem created. In fact, various rabbanim in conjunction with figure such as Benjamin Branfman has been conducting yamei iyun on this subject.

    #1143375
    akuperma
    Participant

    1. There is no question that stealing from the government should be a crime, and that the government (“malchus”) can criminalize such behavior. In a democratic country, one’s fellow citizens are also much annoyed when one steals from the government since that means you are stealing from your fellow taxpayers, who in a democracy, elect the government.

    2. Many financial crimes involve disrupting markets, such as through cartels, insider trading, spreading misinformation, etc. These involve getting rich at the expense of others.

    3. Whether prison is a useful penalty is questionable, but that’s a different issue.

    4. It usually seems that being politically connected to those in charge helps one get away with all sorts of outrageous stuff – no hiddush in this matter.

    #1143376
    cherrybim
    Participant

    Does the government have to return to Madoff all the income tax he paid for his inflated nonexistent income? Also, did the government return the tax overpaid by Madoff investors for their nonexistent income?

    #1143377
    zahavasdad
    Participant

    You might be able to claim losses from madoff on your taxes as losses from a crime

    #1143378
    nishtdayngesheft
    Participant

    “Does the government have to return to Madoff all the income tax he paid for his inflated nonexistent income?”

    What non existent income did he have? quite the contrary, he never reported the money that he stole as income. He underreported income.

    “Also, did the government return the tax overpaid by Madoff investors for their nonexistent income?”

    There were specific rulings issued for how losses form the Madoff scam were to e reported for income tax purposes.

    I do not recall what they were, but it was addressed.

    #1143379
    lesschumras
    Participant

    Nisht, Rubashkin WAS convicted for defrauding the bank, so I don’t understand your question as to why the bank didn’t press charges.there was no question that his company hired illegal immigrants , some of whom were underage. However to get a conviction, the government had to prove that Rubashkin knew it and so the charge was dismissed since they had the bank fraud conviction.

    #1143380
    #1143381
    Avi K
    Participant

    1. How much one recovers from writing off losses due to Madoff depends on one’s tax bracket. However, it will never be even close to 100%.

    2. DY, what do you mean “on a technical leveL”. If someone writes on Shabbat is he only mechallel Shbbat on a technical level?

    #1143382

    If halachah and, l’havdil, secular law are treated the same in your eyes, I have no answer for you.

    Do you similarly consider going 56 in a 55 zone the same as doing melachah one minute after shkiah on Friday evening?

    #1143383
    zahavasdad
    Participant

    Do you similarly consider going 56 in a 55 zone the same as doing melachah one minute after shkiah on Friday evening?

    driving 56 in a 55 IS illegal, however they dont usually give you a ticket for it because they allow for the radar gun to be off a bit or your speedometer to be slightly off.

    You could certainly say the same thing for a clock and perhaps your clock is a minute or 2 off and Shikia is not exact (Like you get the Shkia time for NYC (Manhattan) and you live in Brooklyn, there could be a minute or so difference

    #1143384

    You are nitpicking my example (wrongly, because in halachah we are machmir, while secular law is lenient), but my point is correct nonetheless.

    #1143385
    Avi K
    Participant

    DY,

    1. Take an Aramaic course. Dina d’malchuta dina means that secular law is Halacha.

    2. I was commenting on your use of the term “technical level”. Being that you brought it up, wouldy ou say that someone who did a melacha one minute after Shabbat comes in (ben hashemashot may be part of erev Shabbat or may be part of Shabbat) is mechallel Shabbat on a technical level?

    #1143386

    No need for rudeness.

    1. The halachah does not treat dina d’malchusa the same as our own halachah. It certainly doesn’t treat it any more literally than the government itself does.

    2. Yes. I’m not sure what point you are trying to bring out; an issur based on a safek is still an issur.

    The point I am trying to bring out is that halachah treats all technical issurim as issurim, but the government does not treat all technical violations as violations. They got Rubashkin (from what I’m told) on what is fairly normal business practice (the bank was not deceived in any way) because they wanted to get him.

    #1143387
    lesschumras
    Participant

    DY, what you apparently missed was that Rubashkin fabricated invoices to fool the bank into thinking his company did enough business could support the loan. That is not a technicality. Without that it would have simply been a bad business loan by the bank.

    A somewhat similar case happened almost 30 years ago. A computer leasing company used fabricated lease agreements to convince banks to lend them millions. The principals served extensive time in Federal white collar prisons.

    Someone in my town was sentenced last year to twenty years in Federal prison for his part in the theft of millions of dollars from New York City ( his share was $3 million ; a relative of his got a reduced sentence for providing documentation of the fraud and testifying against the others). He asked the judge to be assigned to Fort Dix Federal camp since it has enough frum prisonmers that there are shiurim, daf yomi and both Sfard and Askenazi minyanim. He’s MO. Not every frum convict is a victim of anti-semitism It’s a sad commentary.

    #1143388

    My understanding is that the bank needed the invoices for their paperwork, but knew what sales and expenses really were.

    Again, on several levels, he shouldn’t have done it, but it wasn’t the outright deceipt and theft which would normally warrant such a draconian sentence.

    #1143389
    Git Meshige
    Participant

    Zahavasdad, I am sure all your Tax Returns are squeaky clean. You do not pay your cleaning lady off the books, report every cash earning to the IRS. , otherwise you wouldn’t be criticizing those that are not straight.

    #1143390

    GM – its that hard for you to believe someones tax returns are clean? I feel really sorry for you.

    #1143391
    nishtdayngesheft
    Participant

    Git Mishege,

    And you forgot to mention, that for someone who does much internet shopping, reported all of his out of state purchases on his state tax return.

    #1143392

    regarding rubashkin – as has been said over and over – unless you guys were on the jury, your are spouting hearsay as if it is fact. what purpose can there be in that?

    #1143393
    zahavasdad
    Participant

    Zahavasdad, I am sure all your Tax Returns are squeaky clean. You do not pay your cleaning lady off the books, report every cash earning to the IRS. , otherwise you wouldn’t be criticizing those that are not straight

    Some of us cannot afford a cleaning lady , And I only work for people on the books. Belive it or not, Most jobs pay people on the books.

    And even if I did cheat on my taxes, that is not an exuse for anyone else to cheat on their taxes. If 2 people are driving 100 MPH in a 25MPH zone and the cops only catch one of them, you cannot claim as a defense, well the other guy did it

    And for the record, both Amazon and Paypal file 1099’s with the IRS

    #1143394
    yitzchokm
    Participant

    “And for the record, both Amazon and Paypal file 1099’s with the IRS”

    So what? that doesn’t make it ok for you to cheat the State of its’ USE TAX!

    #1143395
    zahavasdad
    Participant

    So what? that doesn’t make it ok for you to cheat the State of its’ USE TAX!

    I dont buy online, I SELL online and I pay income tax on that money.

    I find it hilarious that people would even think of comparing buying something online and not paying the sales tax vs stealing millions of dollars from the government

    #1143397
    gavra_at_work
    Participant

    NB: I’m not discussing a specific person or case.

    DY, akuperma – I would argue (and I believe correctly) that the government has a vested interest in people not being able to defraud others easily and that there is trust via documentation. This is necessary for the smooth running of commerce (otherwise people couldn’t trust each other), which is a mandate of government (explicitly via the Commerce Clause, as well as implicitly as part of the social contract).

    I would therefore argue that forging documents is considered to being “Over” on mishpat hamelech in an area which the Malchus has the right to be concerned, and therefore punishable.

    The fact that others don’t get punished for the same deed could be the Al Capone scenario (get him on what you can because you know he is doing something wrong but can’t bring the evidence into court), or because someone bothered the wrong people the wrong way with their attitude. I don’t know. Yidden should stay under the radar in Galus.

    #1143398

    Gavra: I agree. Particularly with your last sentence.

    #1143399
    Avi K
    Participant

    DY, I was referring to the word “technical”. Do you understand now?

    Nisht,

    You are confusing sales taxes and income taxes. In Quill Corp. v. North Dakota, the Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes. However, the court explicitly stated that Congress can overrule the decision through legislation. So far as I know proposals to do this have failed.

    So far as the cleaning lady is concerned, if what you pay her is below a certain amount you might not be required to withhold anything. Her obligation is her problem (although I did onceread that Rav Soloveichik said that there is a problem of “lifnei iver”if you know that she will not report).

    #1143400

    I think I do understand, I think you are equating halachah with dina d’malchusa.

    Technically one who purchases something from out of state has to report it and pay sales tax, even if the seller is not required to pay.

    This is rarely, if ever, enforced, but I’ve seen the forms to report purchase (use) tax. I think this is what NDG is referring to.

    From the tax.ny.gov site:

    Use Tax for Individuals (including Estates and Trusts)

    Tax Bulletin ST-913 (TB-ST-913)

    Printer-Friendly Version (PDF)

    Issue Date: Updated February 19, 2016

    Introduction

    New York State and local sales taxes are imposed on taxable property and services purchased or delivered to you in New York State. In most instances, when you purchase a taxable item or service in the state, or if it is delivered to you in the state, the seller will collect sales tax from you. The seller then pays the tax over to the Tax Department.

    Use tax is a tax imposed on taxable items or services used in New York when the sales tax has not been paid. If a sales tax has not been collected by the seller on a taxable sale, or when taxable items or services are used in New York and the New York sales tax has not been collected, you must report and pay tax directly to the Tax Department. This bulletin discusses the circumstances when a resident of New York State would be required to pay tax on these sales and uses. There is a distinction between sales tax that should have been paid and use tax. However, for purposes of simplicity, the tax required to be paid is referred to in this bulletin as use tax.

    The following are common situations in which a New York State resident may owe use tax:

    purchases of taxable property or services made outside of New York State;

    purchases of taxable property or services made over the Internet, from catalogs, or by phone from businesses that are located outside of New York State;

    purchases of taxable property or services on an Indian reservation;

    purchases where the taxable property or services are used in a different local taxing jurisdiction in the state from where they were purchased or where they were delivered.

    #1143401
    EretzHaK
    Member

    Syag Lchochma – I’m not following the seeming dissonance between your position on not judging Rubashkin (which I agree with) even though he’s been convicted by a non-Jewish court and your position on accepting the judgement of other yidden who are convicted by a non-Jewish court.

    #1143402
    zahavasdad
    Participant

    People who are so obsessed with keeping the Halacha to the technical letter of the law, seem to want to look for every excuse not to obey the financial laws of the United States which are not Anti-Semetic laws and apply to everyone equally, not just jews

    #1143403

    ZD, that’s partially because you can’t keep halachah if you violate technicalities, but you can keep dina d’malchusa if you violate laws which are on the books but not enforced.

    #1143404
    EretzHaK
    Member

    nisht is correct that if you make online purchases from merchants (Amazon, Newegg, etc.) and they don’t bill sales tax in your State, then every year when you file your State taxes you need to pay the sales tax (also called use tax) that you didn’t pay for all the purchases the previous year from merchants that didn’t bill your State’s sales tax.

    Does everyone here who is judging others declare all their out-of-state online purchases on their state tax return that they didn’t pay sales tax at the time of the sale? Otherwise you’re a tax cheat.

    #1143405
    Git Meshige
    Participant

    ZD, instead of criticizing those that have a Nisayoin of not stealing why not look at yourself and you will discover you have many imperfections just like the rest of us. Work on yourself before trying to perfect others

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