The quotation refers to punitive damages in civil cases. What evidence is there that this phenomenon exists with criminal penalties? (I don't deny that it exists, but it is probably suppressed. That is, criminal penalties are more likely to reflect probability of detection than punitive damages).

For instance, there are road signs in northern Virginia warning of a $10,000 fine for littering. The severity of the fine is surely due to the difficulty in catching someone in the act.