The ITT List
Big Bank Executives Skirt Jail Time While Lesser Fish Are Left to Fry
On January 15, Karen Gasparian, manager of the L.A.-based G&A Check Cashing company, was sentenced by a U.S. judge to five years in prison for violation of the Bank Secrecy Act/Anti-Money Laundering compliance (BSA/AML).
Critics were quick to note the disparity between this punishment and the relative slaps on the wrist given to larger financial institutions found guilty of the same offense.
For example, following the revelation in August 2011 that JP Morgan Chase had sent a ton of gold bullion to Iran in violation of sanctions, the company was forced to pay a paltry fine. The Department of Justice, in marked contrast to the case brought against Gasparian, chose not to file criminal charges against any of JPMC's executives, including CEO Jamie Dimon. In fact, just this week, the Office of the Comptroller of the Currency issued two orders to JPMC indicating that the company has yet to implement the internal controls and independent testing necessary to safeguard against future BSA/AML violations. This time the U.S. government refused to even fine JPMC, to say nothing of jail time.
At the sentencing hearing, the defense attorney noted these disparities:
An even greater problem with the Government's seeking a sentence of incarceration in this case is the disparity when compared to other instances of the same offense, or instances involving even more egregious conduct, such as much larger financial institutions conducting business with drug trafficking organizations and terroristic regimes like Iran. Time and time again, the United States Government has offered deferred prosecution agreements (and fines) to financial institutions whose conduct was exponentially more egregious than the conduct at issue here. Mr. Gasparian's offense, while serious, was still far short of the conduct committed by these other institutions. Any sentence of incarceration in this case would be a loud proclamation that the rich and powerful receive one type of justice, while those less powerful receive another type.
However, U.S. Judge John Walker was less than sympathetic. In addition to Gasparian's prison sentence, G&A Check Cashing company was forced to pay a fine of $1 million and sentenced to two years probation.