There’s been no shortage of federal prosecutions stemming from the global financial crisis, but the headlines belie a crucial distinction: The crimes tackled so far are predominantly the kind revealed by a meltdown, not the type that cause it in the first place.
Ponzi schemes, of course, are Exhibit A; they’re running all the time, but only surface when the economic tide goes out. The Department of Justice (DOJ) has taken down a number of mortgage fraudsters and corrupt borrowers, but they’re small fries in the grand scheme of the financial meltdown and comparatively low-hanging fruit for prosecutors.
