From an old British expression (thus "pound" instead of "dollar"); the original reference was probably to theft (though this is not certain), saying that being arrested ("taken in") for stealing a small amount is just as bad as for a large amount, so you may as well steal a lot and hope to get away with it.
An equivalent expression is, "As well hanged for a sheep as a lamb", where it's implied that you are stealing the animal. If the punishment for failure is the same, you may as well try for the largest possible reward.
The phrase is often misused with reference to a punishment that is out of proportion to a crime, but this is not the actual meaning.
Sam: "Well, you know what they say, 'in for a penny, in for a pound!'"