S&L Crisis Prosecutions: 1,000+ Bankers Convicted, Contrasts Sharply with 2008

Between 1988 and 1992, the Department of Justice prosecutes over 1,000 savings and loan bankers for fraud and related crimes during the S&L crisis, with regulators making over 30,000 criminal referrals that produce felony convictions in cases designated as “major” by DOJ. Federal prosecutors achieve a 90% conviction rate in prosecutions of the top 100 worst fraud schemes, sending 1,706 bankers to prison and securing 2,603 guilty verdicts. The aggressive prosecution effort demonstrates that systematic white-collar financial fraud can be successfully investigated and punished when prosecutors prioritize accountability over protecting industry relationships.

The S&L prosecutions contrast dramatically with the 2008 financial crisis response, when zero Wall Street executives were prosecuted for fraud despite a crisis 70 times larger in terms of losses. During the S&L crisis, a single agency made over 30,000 criminal referrals; during the 2008 crisis, all federal agencies combined made fewer than a dozen criminal referrals. The difference reflects changing priorities: Reagan and Bush administration prosecutors treated S&L fraud as serious crime warranting prison time, while Obama administration officials declined prosecution of bank executives, claiming cases were too complex or that prosecutors lacked evidence—despite widespread documented fraud in mortgage origination, securities sales, and accounting.

The successful S&L prosecutions prove that financial fraud can be prosecuted when political will exists. Roughly 600 individuals were involved in the top 100 worst S&L fraud schemes, and virtually all were prosecuted with 90% conviction rates. The cases involved complex financial instruments, accounting fraud, and coordinated criminal conspiracies—the same characteristics Obama administration officials later claimed made 2008 cases “too difficult” to prosecute. The contrast reveals that the failure to prosecute Wall Street executives after 2008 represented a political choice, not a legal necessity: prosecutors chose to protect banking industry relationships rather than pursue accountability for fraud that devastated the American economy.