Corporate Crime Has Cost New York Billions Says State Comptroller

by Leroy Baker, Tax-News.com, New York

22 August 2003

According to New York state comptroller Alan Hevesi, corporate scandals have cost the state $13 billion whilst depriving senior members of the workforce an average of $10,000 from their retirement income.

Hevesi made his revelations in a report released earlier this week where he claimed that corporate crime in the accounting and energy industries, to name but two, cost New York state $1 billion in tax revenues over the last two years at the same time as reducing the state employees' retirement fund by $9 billion.

New York City meanwhile, is said to have foregone $260 million in tax revenues from corporate scandals which also caused some $7 billion to be wiped off the value of the city's public pension system due to plunging stock values and job losses.

"People are outraged by these unethical and criminal acts, but no one should have the impression that the only victims are the tens of thousands of people who lost their jobs, or their retirement plans, or the investors who lost billions," Hevesi said. "Every taxpayer in America is affected by this."

Hevesi has calculated that a citizen of New York in his or her 50's or 60's would probably have forfeited something in the region of $10,000 from their retirement income resulting from corporate fraud, based on a $92,000 portfolio.

"The loss to state and local budgets is irretrievable," said Hevesi. "Individual investors, particularly those who are 50 years and older, are unlikely to fully recoup their losses to their retirement.''

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