A new report from the Heritage Foundation attempts to count the number of laws in the federal criminal code. Author John S. Baker, Jr. estimates we have about 4,500 laws, with another 10,000 if you include federal regulations that can be criminally enforced. But Baker cautions that the code is so Byzantine, vague, and ambiguous, it's really impossible to come up with a reliable figure. The Constitution lays out just three federal crimes, and for 200 years, criminal justice policy was mostly left to the states. That began to change in the 1970s.
Today's federal criminal code is enormous—and growing. Baker also finds that Congress tends to add more laws during election years (surprise!), that federal judges and prosecutors exacerbate the problem by interpreting federal statutes as broadly as possible (sometimes retroactively), and that new federal laws are increasingly lacking a mens rea requirement.
So we have a bewildering federal criminal code that no one person could possibly completely comprehend, the fact that you can be charged for breaking one of those laws even if you weren't aware that what you were doing was illegal, and increasingly leeway and discretion afforded to prosecutors to interpret all of these laws as broadly as possible. Throw in the problem of selective enforcement (there aren't nearly enough resources to prosecute all the crimes on the books), and you have a system where everyone's a potential criminal, but prosecutors can pick and choose whom to target. Federal prosecutors then win convictions in about 90 percent of their cases—and that's only those cases that make it to trial. Ninety-five percent of federal defendants take plea bargains (which doesn't always necessarily mean they're guilty).
Meanwhile, a new paper from the Cato Institute on federal white collar crime explains how federal prosecutors in corporate crime cases are adopting the Spitzer model, and doing away with trials and courtrooms altogether. N. Richard Janis writes that the "combination of draconian sentences, lack of meaningful judicial control over the imposition of sanctions, and the impossible burdens on company officers have jeopardized the very nature of our adversary system of justice." The Cato study says federal prosecutors' enormous leverage under the post-Enron regulatory structure allows them to essentially deputize private corporate counsel to go after targeted employees.
I'd add that the broadly written (and even more broadly interpreted) federal conspiracy and racketeering laws make all of this even worse. If federal prosecutors don't have the evidence to prove the underlying crime, they'll often fall back on conspiracy or mail or wire fraud charges, which are much easier to prove.