Editor's note: A version of this post originally appeared on LinkedIn.  

The next time someone tells you that bankers got off scot-free from the financial crisis, tell them they're wrong. Really. The truth is that lots of bankers are sitting in jail for bubble- and post-bubble era crimes.

Just not bankers who worked at giant banks. HSBC admitted laundering hundreds of millions of dollars for drug cartels, but no bankers in its employ were prosecuted. Instead, its executives agreed to cough up $1.9 billion to make the problem go away.

The Obama Justice Department showed no such mercy at Georgia's Tifton Banking Co., where Gary Patton Hall Jr. was convicted in a book-cooking scheme that cost taxpayers and the bank $2.8 million. Or at Ocean Bank in Miami, Fla., where Danilo Perez was sentenced to 37 months for taking bribes and evading $91,000 in taxes.

The DOJ's failure to bring charges against any high-level executives at big banks was dissected to devastating effect by Jed S. Rakoff, a U.S. District Judge in the Southern District of New York in a recent essay.

Rakoff, a Harvard Law School grad who headed the Southern District's securities fraud unit in the late 1970s, has been a frequent critic of the feds' recent fondness for allowing big banks to wiggle out of legal troubles by writing checks, while allowing to carry on with business the individuals in their midst who actually broke the law.

A few years ago, Rakoff famously sought to kill a deal between the Securities and Exchange Commission and Citigroup. The parties were seeking his court's approval for the bank to settle claims that it had defrauded investors by admitting nothing, even as it coughed up $95 million in punitive damages and another $190 million in settlements.

"I won't get cute and ask what portion of Citi's net worth $95 million represents because I don't have a microscope with me," Rakoff deadpanned during a hearing. His conclusion: "The proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest." The Second Circuit ultimately overturned the judge on grounds that he'd overstepped his judicial authority.

Undeterred, Rakoff recently took his case to the court of public opinion. Writes the judge:

If...the Great Recession was in material part the product of intentional fraud, the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years. Indeed, it would stand in striking contrast to the increased success that federal prosecutors have had over the past fifty years or so in bringing to justice even the highest-level figures who orchestrated mammoth frauds. Thus, in the 1970s, in the aftermath of the “junk bond” bubble that, in many ways, was a precursor of the more recent bubble in mortgage-backed securities, the progenitors of the fraud were all successfully prosecuted, right up to Michael Milken.Again, in the 1980s, the so-called savings-and-loan crisis, which again had some eerie parallels to more recent events, resulted in the successful criminal prosecution of more than eight hundred individuals, right up to Charles Keating. And again, the widespread accounting frauds of the 1990s, most vividly represented by Enron and WorldCom, led directly to the successful prosecution of such previously respected CEOs as Jeffrey Skilling and Bernie Ebbers.

Rakoff takes pains to avoid declaring, based on his own observations, that fraud occurred or accusing any one party of wrongdoing. But he also notes that the Financial Crisis Inquiry Commission discovered what it deemed evidence of rampant fraud leading up to the financial crisis. He then debunks the standard claims that this crisis was different than past scandals and the evidence of wrongdoing too sketchy or the legal hurdles were too high to go after big game.

Instead, Rakoff's draws a complex, convincing portrait of what's behind the absence of prosecutions that goes beyond the usual simplistic – and often ideologically motivated – finger-pointing.

No, the judge writes, prosecutors did not pull punches because they were too cozy with bankers. Echoing an argument I've heard elsewhere, he makes the case that any prosecutor bucking for a lucrative private gig will be doubly motivated to make a name for himself by taking the biggest scalps possible.

Instead, Rakoff concludes that the lack of prosecutions resulted from the confluence of several other factors. Among them: the DOJ's preoccupation with terrorism; its focus on insider trading investigations, which offered prosecutors quicker and easier routes to legal victories they'd find trying to unravel the complexities of the junk-mortgage factories operated by brokers, bankers and ratings agencies; and the government's reluctance to shine a light on a crisis that it played a leading role in creating--involvement that included everything from the repealing of Glass-Steagall to the Federal Reserve's low interest rates to bank regulators' dereliction of duty to the roles of the Department of Housing and Urban Development, Fannie Mae and Freddie Mac as pushers of subprime mortgages.

On top of all that, of course, came the government's role in presiding over the shotgun marriages of the likes of Bank of America with Countrywide Financial and JPMorgan Chase with Bear Stearns. Thus, did banks that were already too big to fail, jail or behave properly become even bigger.

The fact that these banks were above the law in the eyes of the nation's top law enforcer trickled out last March. That's when Attorney General Eric Holder admitted while testifying on Capitol Hill that his DOJ had avoided going after big banks over concerns about the possible “negative impact on the national economy, perhaps even the world economy.”

Says Rakoff of this Obama administration bombshell: “To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse — sometimes labeled the ‘too big to jail' excuse — is disturbing, frankly, in what it says about the department's apparent disregard for equality under the law.”

The result of these many factors has been a government that has satisfied itself with following the playbook that Rakoff tried to burn during the Citi case – one in which executives at big banks write checks and return to their fancy offices.

Just going after the company is ... both technically and morally suspect,” Rakoff writes. “It is technically suspect because, under the law, you should not indict or threaten to indict a company unless you can prove beyond a reasonable doubt that some managerial agent of the company committed the alleged crime; and if you can prove that, why not indict the manager? And from a moral standpoint, punishing a company and its many innocent employees and shareholders for the crimes committed by some unprosecuted individuals seems contrary to elementary notions of moral responsibility.”

Actually, it's even worse than that. Lately, the government has been shaking down big banks for selling Fannie and Freddie crummy mortgages during the housing bubble. There's little doubt that the banks did precisely that, but by satisfying itself with big financial settlements the government is not only compounding the cost foisted on innocent shareholders while letting guilty execs get away; it's also whitewashing the involvement of many guilty parties within its own ranks.

Even more disconcerting than our government's moral cop-out is the message its failure to prosecute individuals is sending to Wall Street's decision makers today. One interpretation would be that it's open season to continue unethical and illegal behavior.

It's no surprise, then, that bubble-era scandals have given way to those involving robo-signing of foreclosure documents, Libor, currency trading, physical commodities dealing and consumer debt collections and corrupt hiring practices in China. The message JPMorgan Chase's board appeared to send this week in hiking CEO Jamie Dimon's pay to $20 million is that it's unbothered by what such troubles say about internal controls and corporate ethics – as long as the bank keeps making billions each quarter, it's mission accomplished.

Under such conditions, bank executives would be crazy to hold back. If they get caught, they can pay their way out of the problems with shareholders' money. And if their misdeeds pay off as expected, the profits will goose their pay.

In other words, for bankers it's a lucrative, one-sided trade enabled by our federal government. And Unless Uncle Sam starts enforcing the law, it's one that financiers will continue making.

Neil Weinberg is the editor-in-chief of American Banker and co-author of Stolen Without a Gun: Confessions from inside history's biggest accounting fraud - the collapse of MCI Worldcom (Etika Books: 2007). The views expressed are his own.