How Bruce Karatz avoided jail time

In a nutshell, by being rich and well-connected. The former CEO of KB Home, convicted on charges that he lied about backdating stock options, has pledged $1.1 million to help revive struggling Homeboy Industries - and it just so happens that the federal judge handling the case, Otis D. Wright, really likes Homeboy Industries. Karatz is serving eight months home detention at his Bel-Air mansion (though he's been seen away from the property as of late). Prosecutors had asked for a five-year prison term. From the Daily Journal:

In two interviews with the Daily Journal, Wright said a key factor in his sentence was the pledge by Karatz that he would use his business acumen to help keep the struggling nonprofit open. That included giving his own money, raising funds within his circle of wealthy friends, and committing his time as an informal advisor to Homeboy's board of directors. Wright, who started his own federal court program to help convicts reintegrate into society, has shown interest in a partnership between his court program and Homeboy.

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"At the end of the day, there are going to be people who look at this as a two-tiered [justice] system," Wright said. "But those of us who have a lifetime appointment aren't worried about appeasing some faction. I couldn't care less." "I'm concerned about doing the right thing," Wright said.

It's worth noting that Karatz already was volunteering at Homeboy before his trial began, and had committed the $1.1 million to the nonprofit. "I think, candidly, he probably came there to build a resume for his sentencing," Homeboy director J. Michael Hennigan told the newspaper. Also keep in mind that federal judges have wide discretion in sentencing white-collar convicts. Apparently none of this is illegal, and all sides have dropped their appeals in the case. Like I said, rich and well-connected.