Did you hear that one of the biggest banks in America just agreed to one of the biggest penalties ever for committing one of the biggest financial frauds in U.S. history? It happened just the other day and, no, chances are you didn't hear because the story was buried in the business section.

The bank is Bank of America. The penalty is $6.3 billion. And the crime is that BofA knowingly sold loads of bum mortgage securities to Freddie Mac and Fannie Mae -- securities packed with subprime mortgages taken out by lenders that couldn't really afford the loans and that later lost value when the housing market imploded. Bank of America and its former CEO, Kenneth Lewis, also settled a suit with New York State that it misled its shareholders when it acquired Merrill Lynch n 2008, leaving out the inconvenient truth that Merrill was saddled with huge liabilities.

These are brazen crimes. Remember, securities law is relatively simple when it comes to defining fraud: If I'm selling you stock shares or a bond, I need to tell you the truth about the underlying value of that offering. If I tell an investor that my company has a thousand clients, and that's why he should give me cash for an equity stake, but I know full well that my company only has a hundred clients, I have just committed a federal offense that can result in prison time. Likewise, if I have a bundle of mortgages that I know include a bunch of really shaky loans -- where due diligence was never done, and poor credit prospects were given loans -- than I have an obligation to tell you that, so my bundle can be priced fairly. I need to say: hey, these loans are really a mixed bag. If I don't say that, and I know the truth to be otherwise, I can be sent to prison. And for good reason: I've just cheated you out of a bunch of money. I've sold you something for top dollar that should have been heavily discounted, or not sold at all, based on information that I withheld from you.

Clear enough?

Okay, so now consider how Bank of America (and, even more so, its affiliated entity Countrywide) handled themselves in the housing boom. They made loans to nearly anyone with pulse during the go-go years, due diligence be damned, and passed that junk along to buyers of mortgage-backed securities. Executives knew that these securities were filled with dubious loans, but they withheld that information in peddling this stuff to investors. And it's not like the evidence of this deception is incredibly arcane and hard to fathom: In many cases, smoking guns have been found: like clear-cut emails of bank and mortgage people on the front lines of lending raising red flags about the quality of underwriting, warning the execs upstairs that bad loans were being made. And investigators and plaintiff lawyers have taken depositions revealing what executives at places like BofA knew and when they knew it.

The proof is there, but convictions have never been forthcoming. And this new settlement with BofA and Kenneth Lewis continues a pattern of civil penalties and no criminal action.

The news this week was relatively unusual in that Kenneth Lewis agreed to a $10 million penalty to settle allegations brought by New York State that he misled BofA shareholders when he led the acquisition of Merrill Lynch at the height of the financial crisis. But it turns out that Lewis himself won't pay this money; BofA's insurance company will. Lewis also didn't admit to any wrongdoing as part of the settlement. And the same day that the deal was announced, his lawyer released a statement saying that Lewis was "proud of the role he played in helping the US banking system survive a very challenging period in its history. . . . Mr. Lewis is pleased to put this matter behind him and to move on with his life."

What a sorry spectacle of justice undone. And you've got to feel bad for Eric Schneiderman, the New York State Attorney General who worked so hard to bring real justice, but has failed, at least for now. Schneiderman said in a statement: “I would hope this closes one chapter of our ongoing efforts to ensure the frauds that occurred in and around the financial crisis are not forgotten."

You can be sure that this chapter won't be forgotten. Future bank executives will remember clearly that people like them can get away with the biggest imaginable financial crimes, grow insanely rich in the process (Lewis made a few hundred million in compensation and retirement benefits in just eight years), and walk away unpunished when the music stops.

When there are no harsh consequences for wrongdoing, there is no deterrence.

And why aren't there consequences? For different reasons, but one is that these cases are expensive to bring to trial, even when the evidence chain is pretty clear. Remember the long and expensive criminal pursuit of the top executives at Enron? It took the government years and millions of dollars to finally win a conviction in a pretty simple case where Jeff Skilling and Ken Lay were accused of lying about the health of Enron as things went south.

Government authorities don't have the time and money to do many cases like that, and unfortunately a lot of the Justice Department's prosecutorial firepower has been tied up in recent years going after insider trading cases.

To deter future high-level frauds, the government needs to do a better job actually punishing the bad guys. You'd think that if this nation can find the resources to lock up two million poor people in our prisons, we could also do what it takes to bring a few rich people to justice, too.