We cheer federal prosecutors in our cowboy economy when they nail fraudsters who clearly did wrong. We wince when the feds bring charges only to have such cases tossed out.
By then, the damage is already done to someone's reputation, career, family life, bank account and friendships.
I was reminded of this while reading a Bloomberg story about prominent business people like David Stockman — President Ronald Reagan's U.S. budget director — who are indicted for corporate crimes and spend millions fighting the charges, only to have the cases dropped years later.
Buried in that story is the tale of a Tampa man who once may have had an impressive career ahead of him. His name is Rick Karl, a formerly successful business executive and lawyer who dreamed of becoming a judge.
Rick's full name is Frederick B. Karl Jr. Now 55, Rick is the son of Fred Karl, 86, one of Hillsborough County's most venerable politicians. The elder Karl served in the state House and Senate, as a Florida Supreme Court justice and as Hillsborough's administrator and county attorney.
With some irony, Karl senior was known for his ability to fix public relations disasters or dubious political and business behavior in Tampa. Since 2000, his name has adorned the Frederick B. Karl County Center, Hillsborough's seat of government power.
The younger Karl was a general counsel and board member of a Tampa company called Medical Manager that sold physician management software. The company was bought by WebMD for billions in stock in 2000. Three years after Karl left the company, federal agents began investigating whether Medical Manager had cooked its books.
In late 2005, Karl was one of 10 executives indicted for a $16.8 million fraud. Karl denied wrongdoing: "To be accused of fraud and money laundering, it felt like this is the end of life."
In late 2009, prosecutors gave up and dismissed charges against Karl and others. Two top executives were found guilty in early 2010 of conspiring. But in May, a U.S. District Court judge overturned the verdicts, saying the five-year statute of limitations had expired.
So, after all this, did the feds screw up because they lacked proper evidence? Or were they just too slow to act?
The judge who threw out the convictions criticized the government's prosecution of what he called "probably the most expensive case in the history of the world."
By then, of course, Karl Jr. was long gone from Tampa Bay, serving as a $127,000-a-year county attorney in Volusia County near Daytona Beach. Karl told Bloomberg that after four years of facing fraud charges, he had lost an expected appointment to the Florida judicial bench, seen his reputation besmirched and spent countless sleepless nights wondering what he had done wrong.
"It's like a shadow that's out there," he says. Online, an FBI website still carries the Dec. 15, 2005, press release headlined Ten Former Executives of Medical Manager Indicted in Accounting Fraud Scheme.
The dismissal of the charges no doubt greatly pleased both Karls, father and son. But each generation surely wonders what could have been.