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Fraud and Politics in the Savings and Loan Crisis

NCJ Number
K Calavita; H N Pontell; R H Tillman
Date Published
26 pages
As part of a comprehensive analysis of the savings and loan crisis of the 1980s, this study examined case referrals, prosecutions, and sentencing in savings and loan cases in Texas and California between 1985 and March 1993.
The findings are based on an analysis of court records and interviews with persons familiar with the investigations. The study found that in Texas only one out of every seven persons suspected of committing major crimes at thrift institutions was prosecuted for those crimes; in California approximately one out of four suspected thrift offenders was indicted. Of those charged in major savings and loan cases, 91 percent were convicted, and of these, 78 percent were sentenced to prison. The likelihood of indictment in Texas and California was influenced by the dollar losses associated with those crimes, and, in Texas, with the number of crimes the individual was suspected of committing. Similarly, the length of prison sentences for those convicted varied directly with dollar losses and the number of institutions victimized. The length of prison sentence was unrelated to the organizational position of thrift offenders. No evidence was found to support an alternative-sanctions model for the sentencing of white-collar offenders. In fact, being the subject of a civil action increased both the likelihood of indictment for these thrift fraud suspects and the length of their prison sentences. Compared with the sentences imposed on other Federal offenders convicted of property crimes (e.g., burglary) or drug offenses, savings and loan offenders received relatively short prison sentences. The median length of prison sentences for these offenders nationally was less than 2 years (22 months), with a mean of just over 3 years (36.4 months), although the amounts of money losses involved for victims far exceeded losses in the typical "street" property offense. These findings are compared with Sutherland's class advantage theory of white-collar crime and some popular modifications of Sutherland's theory.