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Financial crimes are costly to society but less severely punished than other nonviolent
crimes. We investigate whether prison sentences reduce financial crimes. Using random
assignment of judges in Finland to identify causal impacts, we find a prison sentence reduces
defendant reoffending by 42.9 percentage points three years post-sentencing. Given prior
evidence of financial misconduct "contagion," we also explore spillovers on colleagues. A
prison sentence reduces the likelihood that a financial crime defendant’s colleagues commit
crimes by 27 percentage points, suggesting broader deterrent effects of harsher punishments,
but only for fraud cases. Last, we show financial crimes are not victimless crimes.
