[DISCARDED] Repeal GA177 "Concerning Financial Fraud"

[Goobergunchia]

Motivation

Target of repeal:
https://www.nationstates.net/page=WA_pa ... /start=176

This is fairly straight forward: GA177’s main operative clause is this:

“4. Member-state shall ensure that all victims of fraud shall receive compensation for their loss equal to or greater than the value of the loss and that this compensation shall be derived from the fiscal and/or material assets of the perpetrator of the act of financial fraud which resulted in the loss,”

There is a major issue with this: What happens if the fraudster doesn’t have any money left? In fact this actually incentivizes the fraudster to leave no money behind and spend it all first. Even the Bernie Madoff case has so far involved recovering only 91% of the principal so far, much of that from suing other people.

I believe the outstanding resolution is essentially doing nothing much, because the fact that misrepresentation and fraud are criminal offences should be covered by RNT, so it seems to make more sense to simply revert to RNT and not specifically write about compensation for victims of crime coming from whose pockets and let local courts sort it out.

RL example

As an example, and I am grossly oversimplifying here:

https://en.wikipedia.org/wiki/New_York_ ... ganization

According to Wikipedia, convicted felon Donald J. Trump has an outstanding summary judgment for business fraud against New York State. Say he ultimately loses the case. That means that the Trump Organization and Donald J. Trump has to pay $354 million plus interest, which could go to say $464 million or more. ($464 million was the amount assessed for the bond, the bond was reduced to $175 million). If Donald J. Trump had assets of less than $464 million*, payments for civil lawsuits (E. Jean Carroll v. Donald J. Trump for example), spousal support (for Melania Trump), and all other payments (including the long queue of other lawsuits will be behind the queue and left unpaid.

Note that I simply object to the specific order of payment specified in the resolution, not to the idea of the fraudster providing restitution.

* Hypothetically.

Replacement

No replacement is planned given the reliance on RNT.

Submitted draft

The World Assembly (WA),

Acknowledging the noble intent of GA177 to prevent financial fraud against members of the public and state institutions;

Concerned that the key operative clause of GA177 (bullet 4) states that WA members shall ensure that “all victims of fraud shall receive compensation for their loss equal to or greater than the value of the loss and that this compensation shall be derived from the fiscal and/or material assets of the perpetrator of the act of financial fraud which resulted in the loss,”

Flummoxed that, in the opinion of the WA:

1. The said provision indirectly (and rather extremely perversely) incentivises fraudsters to retain no material assets before they are caught (or convicted) and spend it all, merely as examples, on yachts, fast cars, expensive international artwork, and other extravagant indulgences;
2. The said provision leaves no discretion for individual WA states to reasonably tailor to the circumstances of the case, overriding, for example, any spousal or child support payments demanded from the convicted fraudster;

Further noting, since the passage of this resolution:

1. Protection for savers and investors have been enhanced through GARs 625 and 723;
2. Tort law reforms have been in place through GARs 447 and 515;

Believing that, in many cases, a reasonable judicial process can determine compensation for victims and the sources of such funds properly (such as from the assets of the perpetrator(s), as well as any co-conspirators), and without additional guidance from the WA, and that the WA should carefully consider if a replacement is necessary;

Hereby repeals the target resolution, 'Concerning Financial Fraud'.

[Simone Republic]

Bump, and I am not really expecting another revision, because the relevant clause (4) in the resolution is quite truly perverse.

And no, I've stopped myself from making a cannabalism joke here.

[Bananaistan]

Automatically opposed because there's no link to the target in the OP.

[Simone Republic]

Automatically opposed because there's no link to the target in the OP.

I've added it in.

[Simone Republic]

Bump on the Simone Republic drone.

[The Ice States]

"What alternative does your mission suggest to requiring damages paid by the fraudster?"

~Samuel Rothmann,
WA Mission Intern Staffer,
The Eternal Union of Devonia and the Ice States.

[Simone Republic]

"What alternative does your mission suggest to requiring damages paid by the fraudster?"

~Samuel Rothmann,
WA Mission Intern Staffer,
The Eternal Union of Devonia and the Ice States.

RNT should rip the fuck out of the fraudster, like Bernie Madoff. The point is to try to discourage the fraudster from spending it all in advance.

Of course, if the fraudster wasted it all on fast cars, at least you can auction the fast cars. If the fraudster lost it all in a casino, there isn't much we can do anyway. Debtors' prisons don't really work because it's not as if the fraudster won't be sentenced to 150 years in jail and rot there anyway (again, Madoff as an example).

[Simone Republic]

I removed the line on a potential replacement because I think the tort reform resolutions already amply cover this resolution.

[The Ice States]

"What alternative does your mission suggest to requiring damages paid by the fraudster?"

~Samuel Rothmann,
WA Mission Intern Staffer,
The Eternal Union of Devonia and the Ice States.

RNT should rip the fuck out of the fraudster, like Bernie Madoff. The point is to try to discourage the fraudster from spending it all in advance.

Of course, if the fraudster wasted it all on fast cars, at least you can auction the fast cars. If the fraudster lost it all in a casino, there isn't much we can do anyway. Debtors' prisons don't really work because it's not as if the fraudster won't be sentenced to 150 years in jail and rot there anyway (again, Madoff as an example).

"Thank you for this response, however it still does not directly answer the question. How would you address cases of fraud, other than requiring the fraudster to pay damages?"

~Samuel Rothmann,
WA Mission Intern Staffer,
The Eternal Union of Devonia and the Ice States.

[Simone Republic]

RNT should rip the fuck out of the fraudster, like Bernie Madoff. The point is to try to discourage the fraudster from spending it all in advance.

Of course, if the fraudster wasted it all on fast cars, at least you can auction the fast cars. If the fraudster lost it all in a casino, there isn't much we can do anyway. Debtors' prisons don't really work because it's not as if the fraudster won't be sentenced to 150 years in jail and rot there anyway (again, Madoff as an example).

"Thank you for this response, however it still does not directly answer the question. How would you address cases of fraud, other than requiring the fraudster to pay damages?"

~Samuel Rothmann,
WA Mission Intern Staffer,
The Eternal Union of Devonia and the Ice States.

I thought it's pretty obvious RNT - I mean we have plenty of criminal defense lawyers here.

[Providence Plantations and Rhode Island]

First off, who uses the word "flummoxed"?

[Simone Republic]

I added an example on why the existing order making repatriations for financial fraud is not a good idea.

RL example

As an example, and I am grossly oversimplifying here:

https://en.wikipedia.org/wiki/New_York_ ... ganization

According to Wikipedia, convicted felon Donald J. Trump has an outstanding summary judgment for business fraud against New York State. Say he ultimately loses the case. That means that the Trump Organization and Donald J. Trump has to pay $354 million plus interest, which could go to say $464 million or more. ($464 million was the amount assessed for the bond, the bond was reduced to $175 million). If Donald J. Trump had assets of less than $464 million*, payments for civil lawsuits (E. Jean Carroll v. Donald J. Trump for example), spousal support (for Melania Trump), and all other payments (including the long queue of other lawsuits will be behind the queue and left unpaid. Note that I simply object to the specific order of payment specified in the resolution, not to the idea of the fraudster providing restitution.

* Hypothetically. The hypothetical example is plausible only if shares in Trump Media and real estate values decline substantially from here and the cases drag on for several years.

[Barfleur]

"I do not consider it unreasonable for a convicted fraudster's assets to be spent on restitution to his or her victims, even at the expense of other obligations. As a matter of public policy, making victims whole allows the state to play a valuable role and to ensure that the fraudster does not funnel away his money in other ways--or example, by paying spousal support on the understanding that his former spouse will reimburse him in exchange for other benefits. Furthermore, I find it unlikely that a financial criminal facing incarceration would be incentivized to spend his money on fast cars and international artwork by the prospect of mandatory restitution, but not by other expenses. In either case, he is hardly going to enjoy his wealth in jail, so why would it matter where the money goes once it's taken from him?"

[Simone Republic]

"I do not consider it unreasonable for a convicted fraudster's assets to be spent on restitution to his or her victims, even at the expense of other obligations. As a matter of public policy, making victims whole allows the state to play a valuable role and to ensure that the fraudster does not funnel away his money in other ways--or example, by paying spousal support on the understanding that his former spouse will reimburse him in exchange for other benefits. Furthermore, I find it unlikely that a financial criminal facing incarceration would be incentivized to spend his money on fast cars and international artwork by the prospect of mandatory restitution, but not by other expenses. In either case, he is hardly going to enjoy his wealth in jail, so why would it matter where the money goes once it's taken from him?"

(OOC)

Depends on the legal system.

If you count falsifying business records as a type of financial fraud (the resolution uses "procurement of fiscal and/or material assets by deceptive means... (by way of) deliberate and outright statement of false information"), as I said earlier convicted felon Donald J. Trump of New York is still outside. I gather from various news sources that he's having a good time.

[The Ice States]

"I do not consider it unreasonable for a convicted fraudster's assets to be spent on restitution to his or her victims, even at the expense of other obligations. As a matter of public policy, making victims whole allows the state to play a valuable role and to ensure that the fraudster does not funnel away his money in other ways--or example, by paying spousal support on the understanding that his former spouse will reimburse him in exchange for other benefits. Furthermore, I find it unlikely that a financial criminal facing incarceration would be incentivized to spend his money on fast cars and international artwork by the prospect of mandatory restitution, but not by other expenses. In either case, he is hardly going to enjoy his wealth in jail, so why would it matter where the money goes once it's taken from him?"

(OOC)

Depends on the legal system.

If you count falsifying business records as a type of financial fraud (the resolution uses "procurement of fiscal and/or material assets by deceptive means... (by way of) deliberate and outright statement of false information"), as I said earlier convicted felon Donald J. Trump of New York is still outside. I gather from various news sources that he's having a good time.

Ooc: Is this not evidence that more stringent regulation is needed, rather than allowing member nations to do gar nichts to address fraud?

Personally I still do not see the need for this repeal, though I acknowledge that it will likely pass.

[Simone Republic]

Ooc: Is this not evidence that more stringent regulation is needed, rather than allowing member nations to do gar nichts to address fraud?

Personally I still do not see the need for this repeal, though I acknowledge that it will likely pass.

Whether you put in more stringent or less stringent regulation, it doesn't change (in my opinion) the very specific and odd (and in my view wrong) order about compensation for victims of fraud coming ahead of (say) child support.

[Barfleur]

Ooc: Is this not evidence that more stringent regulation is needed, rather than allowing member nations to do gar nichts to address fraud?

Personally I still do not see the need for this repeal, though I acknowledge that it will likely pass.

Whether you put in more stringent or less stringent regulation, it doesn't change (in my opinion) the very specific and odd (and in my view wrong) order about compensation for victims of fraud coming ahead of (say) child support.

"But why, ambassador, is it wrong? If you cheat someone out of their money, it is eminently fair and reasonable to make you pay it back to them! Ensuring restitution in such cases both makes victims whole and facilitates the free market, as investors know that if they are defrauded, the state will have their back, rather than disclaiming any interest in helping them."

[Great Britain and Nth Ireland]

First off, who uses the word "flummoxed"?

I do.

[Simone Republic]

"But why, ambassador, is it wrong? If you cheat someone out of their money, it is eminently fair and reasonable to make you pay it back to them! Ensuring restitution in such cases both makes victims whole and facilitates the free market, as investors know that if they are defrauded, the state will have their back, rather than disclaiming any interest in helping them."

(I guess IC, but doesn't matter)

"What, you want to leave Melania Trump and EJ Carroll out of pockets if convicted felon Donald J. Trump doesn't get bankrupted fist for falsifying business records?" Says a bear a furry convention attendee.

[Barfleur]

"But why, ambassador, is it wrong? If you cheat someone out of their money, it is eminently fair and reasonable to make you pay it back to them! Ensuring restitution in such cases both makes victims whole and facilitates the free market, as investors know that if they are defrauded, the state will have their back, rather than disclaiming any interest in helping them."

(I guess IC, but doesn't matter)

"What, you want to leave Melania Trump and EJ Carroll out of pockets if convicted felon Donald J. Trump doesn't get bankrupted fist for falsifying business records?" Says a bear a furry convention attendee.

"That is a good point. I suppose 'restitution awards in other criminal cases and damages for defamation' are of a category more deserving than, say, spousal support to an ex-spouse who willingly took part in one's dissolute lifestyle."

[Refuge Isle]

Now at vote.

[Trectast]

Dispatch from the Ministry of Foreign Affairs

To: The Esteemed Delegates of the World Assembly

From: The United Socialist States of Trectast, represented by Comrade Commissar Boris Pankin

Subject: Repeal of GA#177 "Concerning Financial Fraud"

Comrades,

The United Socialist States of Trectast stands in solidarity with the noble pursuit of justice and the protection of our citizens from the scourge of financial fraud. It is with this commitment in mind that we express our support for the repeal of GA#177 "Concerning Financial Fraud."

While the original intent of this resolution was commendable, its practical implementation has revealed unintended consequences that hinder rather than aid the fight against financial crimes. The mandatory compensation clause, as eloquently articulated in the proposal for repeal, inadvertently incentivizes fraudsters to deplete their assets, leaving victims with little hope of restitution. Moreover, it strips individual nations of the autonomy to tailor compensation schemes to the unique circumstances of each case, hindering the pursuit of justice.

We believe that a more nuanced and effective approach to combating financial fraud lies in empowering judicial systems and granting nations the flexibility to implement measures that best suit their specific contexts. The World Assembly has made significant progress in protecting individuals through other resolutions, and we are confident that a combination of robust legal frameworks and international cooperation will prove far more effective than rigid and counterproductive mandates.

Let us not allow the pursuit of justice to be undermined by well-intentioned but flawed legislation. We urge all delegates to support the repeal of GA#177 and join us in building a world where financial fraud is met with swift and effective justice, and where the rights of victims are truly upheld.

In solidarity,

Comrade Commissar Boris Pankin
Ministry of Foreign Affairs
The United Socialist States of Trectast

[Kostane]

Kostane opposes this resolution. The stated clause is not problematic for either of the reasons specified:

“yachts, fast cars, expensive international artwork, and other extravagant indulgences;” would all be material assets. Material assets is not just money, but all owned property. It would be reasonable to assume that the government would seize these assets and sell them to pay compensation.

Furthermore, a reasonably broad interpretation of the phrase “all victims of fraud” could include family members since fraud has ripple effects. This interpretation would allow for “ any spousal or child support payments demanded from the convicted fraudster,” unless you make the case that the child / spouse has not experienced negative consequences from fraud that would make them a victim, in which case no payments would be necessary.

This repeal is utterly unnecessarily. It manufactures problems that don’t exist, and is probably supported only by pro-fraud lobbyists.

[Trectast]

Kostane opposes this resolution. The stated clause is not problematic for either of the reasons specified:

“yachts, fast cars, expensive international artwork, and other extravagant indulgences;” would all be material assets. Material assets is not just money, but all owned property. It would be reasonable to assume that the government would seize these assets and sell them to pay compensation.

Furthermore, a reasonably broad interpretation of the phrase “all victims of fraud” could include family members since fraud has ripple effects. This interpretation would allow for “ any spousal or child support payments demanded from the convicted fraudster,” unless you make the case that the child / spouse has not experienced negative consequences from fraud that would make them a victim, in which case no payments would be necessary.

This repeal is utterly unnecessarily. It manufactures problems that don’t exist, and is probably supported only by pro-fraud lobbyists.

Dispatch from the Ministry of Foreign Affairs

To: The Esteemed Delegates of the World Assembly

From: The United Socialist States of Trectast, represented by Comrade Commissar Boris Pankin

Subject: Re: Repeal of GA#177 "Concerning Financial Fraud" - Response to Kostane

Comrades,

We acknowledge the concerns raised by the delegate of Kostane regarding the proposed repeal of GA#177. However, we respectfully disagree with their assessment of the resolution's problematic clauses.

While it is true that material assets extend beyond mere currency, the reality remains that fraudsters often find ways to convert their ill-gotten gains into forms that are difficult to trace or seize. Luxury items can be easily moved across borders, concealed, or even destroyed, rendering them inaccessible for victim compensation. The resolution's mandate, while well-intentioned, creates a perverse incentive for criminals to engage in such tactics, further harming those they have already wronged.

Furthermore, the interpretation of "all victims of fraud" to include family members, while potentially sympathetic, opens the door to subjective and contentious claims. It risks blurring the lines between direct victims and those indirectly affected, potentially leading to protracted legal battles and further delaying the delivery of justice.

We maintain that the repeal of GA#177 is not only necessary but also crucial for establishing a more effective and equitable system for addressing financial fraud. It is not a concession to pro-fraud lobbyists, as insinuated, but rather a recognition of the resolution's unintended consequences and a commitment to finding more practical and just solutions.

We urge all delegates to carefully consider the complexities of this issue and support the repeal, not out of apathy towards the victims of fraud, but out of a genuine desire to see them receive true and timely justice.

In solidarity,

Comrade Commissar Boris Pankin

Ministry of Foreign Affairs
The United Socialist States of Trectast

[Greater North-America]

(OOC)

Depends on the legal system.

If you count falsifying business records as a type of financial fraud (the resolution uses "procurement of fiscal and/or material assets by deceptive means... (by way of) deliberate and outright statement of false information"), as I said earlier convicted felon Donald J. Trump of New York is still outside. I gather from various news sources that he's having a good time.

Ooc: Is this not evidence that more stringent regulation is needed, rather than allowing member nations to do gar nichts to address fraud?

Personally I still do not see the need for this repeal, though I acknowledge that it will likely pass.

Who is to say that member nations will do nothing about it? True, some will do naught, perhaps, but I think the vast majority of nations will probably have laws just as stringent, if not more so, concerning the restitution of fraudulent actions.