Have you wondered what will become of the rapscallions who are guilty of ripping off mutual fund investors?

The answer is to be found in the jumpsuit locker. If there is an orange jumpsuit in their future, as in going to jail, their prospects are bleak, indeed. Despite the popular impression that white-collar criminals enjoy a life of ease, that's not quite the way the world of criminal justice works. But you already knew that. Maybe once they've done their several months behind bars, the more resilient members of the gang can write books that will no doubt say their failure was Mommy's fault, their fifth-grade teacher's fault or just the result of an uncontrollable addiction to cash.

For better or worse, most market-timing schemers have faced civil, not criminal charges. However, if you are a fund shareholder you lost money either way.

Assuming that these and other fraudsters yet to be named won't have to exchange their wardrobe of pinstripe suits for a closet of tailored, zippered suits, what will become of them?

The first penalty is almost certain. They'll lose their securities licenses and they will be banished from the business for three years to life. But this is small change for many of these people. And, in any event, they will surely bounce back. Here's why:

1.Most of these executives already are very wealthy. They sleep very comfortably, since it's been a long while for most of these executives when several million dollars seemed like a lot of money. Unless they've had the rare misfortune to have been named personally in a class-action suit that finds its way to trial, it's unlikely that these people will lose it all. Lawyers are expensive, but at the net-worth level we're talking about here, they will have many dollars left.

2. They made some bad calls, but they know the business and are smart. Too smart for their shareholders' good, perhaps. Nonetheless, these are people whose average intelligence is off the top of the charts. They were either chief executives or close. Rising to that level of prominence takes many years of effort, lots of verified business success and an abundance of intellectual horsepower.

3. They are consummate salespeople. Even junk bond king Michael Milken did his time and shamelessly emerged into a successful, new career.

4. Make no mistake about it. Some of these characters aren't very nice people, but they'll still have friends and hangers-on who will believe they did nothing wrong.

5. Someday, they'll be able to rationalize their misbehavior as little more than a violation of books and records, not stealing money. They'll say with a straight face that they didn't really do it. They'll start believing that they were sacrificed on the altar of Eliot Spitzer's political ambition. So much blather, perhaps, but someday all of this will feel like the truth.

6. At some point, when they've finished grieving about getting caught, some will unearth the Rolodex, pick up the phone and re-emerge as business consultants. Admittedly, money managers who hire them as such will keep them well hidden away, off to the side, where they can't do any damage and where the trustees won't run into them. But their advice, offered over occasional lunches at Boston's No. 9 Park Street or other four-star watering troughs, will be useful to other executives who are determined to grow their business.

7.With their wealth, intelligence, drive, contacts and renewed sense of self-worth, they can buy a Laundromat or a corner news store. A bodega, perhaps, where they'll sell The Wall Street Journal to customers who will listen with rapt attention to tall stories about their days at the helm of a runaway ship of sales. In fact, many already own enterprises beyond Spitzer's grasp. It's a better than even bet that several of the alleged schemers already own businesses together. Bars, pool halls, restaurants, you name it.

8. They can bare their souls on the speaking circuit: "I had it all, but was that enough for me? Nope."

9. They can post their resumes on Monster.com and apply for jobs as fraud-detection experts, right alongside computer hackers who have managed to escape the dark side.

In sum, if you are guilty as charged, you will probably work again. Whether this is just or likely remains to be seen. In this business, as in any other, falling from grace is humiliating, inconvenient and expensive, but not often fatal. The very skills and talents that brought those named in the fund scandals to the top may yet prove the source of their redemption.

Charlie O'Neill is president of Diversified Management Resources, an executive search and business development consulting firm in Boston.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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