Swaps king who funded Democrats, ripped off America, gets probation

David Rubin, the Beverly Hills investment banker (he ran interest-rate swaps promoter CDR Financial Products and was a past donor to prominent state and local Democrats (including Pennsylvania's Ed Rendell, who made swaps-buying legal for Pennsylvania municipalities), who pleaded guilty to federal conspiracy charges three years ago after he was accused of ripping off states and towns by selling them interest-rate swaps that cost many of them tens of millions of dollars (Philadelphia for one), was given two years probation by federal Judge Kimba M. Wood (who settled for a judgeship after Bill Clinton failed to make her U.S. Attorney General) despite prosecutors' recommendations that Rubin be sent away for 19 years.

NYTimes says here that soft-hearted Judge Wood appears to have been swayed by Rubin's high-priced lawyers claiming it's tough to really put a price on white-collar crime; that Rubin, from being a greedy thief, has reformed into a public-spirited citizen who had helped rat out at least one other banker who ripped off taxpayers; and that Mrs. Rubin, who says she is ill, would have to raise their kids all by herself.

David Rubin, chairman of CDR Financial Products Inc. (Bloomberg)

We wonder how far Rubin would have gotten with another federal judge, Philadelphia-based Paul Diamond (a George W. Bush appointment) who earlier this month overrode defense attorney and ex-Montgomery County District Attorney (and current GOP County Commissioner, corrected) Bruce Castor's arguments that his client, Michael Pouls, deserved leniency because he was contrite, has a lovely family, had friends who are bankers and upstanding citizens, was only trying to help his family, and meant to give it back. Diamond was incredulous at these defenses, noted that Pouls stold from banks (both Wilmington Trust Co., which later failed, and National Penn), and gave him 8 years.

Pouls could have been stopped long before, New Jersey investigator Robert Bugai tells me, if authorities had only pursued his own complaints, and those appearing in a string of campus-oriented publications, that Pouls' previous student credit card solicitation business was ripping off its own college-student workers. America will have career white-collar criminals as long as it fails to put them away, Bugai says. Judge Diamond seems to believe that; Judge Wood, faced with far more sweeping corruption that threatened taxpayers and public officials as well as banks, seems to think it's not really such a problem.