So just where DID all that whining about coddling white collar crooks in Club Fed come from?
White-Collar Criminal? Pack Lightly for Prison
By RUSS MITCHELL
ssume you are a major corporate executive accused of a securities fraud that has caused hundreds of
millions of dollars of investor losses. Maybe you'll be acquitted. But what if you're convicted? How
long will your sentence last? Where will you serve the time? And will there be tennis?
An entire nation of stockholders, it seems, is calling for white-collar blood. Congress has enacted legislation
calling for doubled maximum sentences. President Bush is threatening "hard time." Last week, Samuel D.
Waksal, the former chief executive of ImClone Systems, was indicted on multiple charges including bank
fraud — which alone could carry a 30-year sentence. On the day Worldcom's former chief financial officer,
Scott D. Sullivan, was handcuffed and arrested, Attorney General John Ashcroft talked about sending him
away for 65 years.
Hyperbole? Yes. But so is the widespread notion that major-league white-collar convicts don't face heavy
prison time, according to interviews with prominent felons, lawyers and Justice Department officials.
On the contrary, nonviolent criminals convicted of financial felonies can face years or even decades in
prison, especially since November 2001, when the United States Sentencing Commission drastically
increased sentences for white-collar crime, with special emphasis on frauds involving many millions of
dollars.
Under the older sentencing guidelines, a first-time, nonviolent offender who committed a fraud that caused
50 or more people to lose $100 million or more faced a prison sentence of 5 years to 6.5 years in a federal
institution. Under the mathematical formula used by the sentencing commission in the 2001 guidelines, the
same individual faces a minimum of 19.5 years and a maximum of 24.5 years. Michael R. Milken, the
financier sentenced to 10 years for securities fraud in 1990, for example, could easily have received at least
double that term under the 2001 guidelines. (His sentence was later reduced, and he served 22 months.
Since then, federal parole has been abolished, and the best an inmate can hope for is a 15 percent
reduction for good behavior.)
Ten years is a critical threshold; convicts sentenced to more than 10 years are placed in a prison behind
fences and razor wire. Less than 10, and you've got a good chance of residing at a prison camp, often
fenceless, for inmates with low risk for escape or violence regardless of their crime.
Say you've negotiated a deal with the prosecution, pleaded guilty to a lesser charge and been sentenced to
five years in prison. The Bureau of Prisons has reviewed your nonviolent history, and you've qualified for
camp. The bureau will try to locate you within 500 miles of your family, but makes no promises.
The idea that white-collar convicts angle for prisons where they can be among their own kind — at
Allenwood, Pa., say, or Lompoc, Calif. — is a myth. For one thing, those serving time for white-collar
crimes number only about 1,000 of the federal system's 160,000 inmates, or less than 1 percent. So you
may be surprised to find yourself surrounded by drug dealers, robbers and check kiters. In any event, most
prisoners try to land themselves where their visitors won't have to travel far.
You can request a particular camp, and sometimes you'll succeed, particularly if you have a good lawyer.
You might want to be near your ailing mother, or be placed in a camp that serves special diets. You may be
elderly or have special medical needs. A. Alfred Taubman, 78, the former chairman of Sotheby's, who
began serving his one-year sentence less than two weeks ago for conspiring to fix prices, was placed at a
prison medical center in Rochester, Minn., because of his age.
You'll also want court permission to self-surrender, which means having family or friends drive you to the
prison and leave you at the gate. Otherwise, you'll ride what convicted felons call the Super Shuttle from
hell: dressed in a jumpsuit, shackled, loaded on a van with up to 15 other prisoners, making stops at several
prisons on a trip that could take hours or even days.
Former convicts say many illusions are broken the first day. "They expect either `The Shawshank
Redemption' or the myth of `Club Fed'," said David Novak, who spent nine months at the prison camp in
Eglin, Fla., in 1997 for purposely crashing his aircraft and filing a false insurance claim. ("I was an idiot,"
Mr. Novak said. "My value system was skewed.")
The term "camp" conjures images of horseback riding, swimming and weenie roasts. Mr. Novak said some
Wall Street executives showed up thinking they could wear their own clothes, go home on weekends, play
golf and bring their laptops — all wrong. Almost no personal property is allowed, not even contact lenses.
Inmates are allowed only one religious text, one pair of eyeglasses, dentures and dental bridge, one solid
wedding ring with no stones, $20 in change for vending machines and cash or money orders for an inmate
account.
An inmate can put unlimited funds in the account but is allowed to spend only $175 a month. Inmates can
buy from a small selection of athletic shoes, toiletries and snacks in the commissary, but most money is
consumed on telephone calls, which are monitored. All prisoners are required to work, in jobs that pay 11
cents an hour — tax free.
Living conditions are tight. At most camps, bunk beds are crammed into small cubicles that hold two to six
inmates. As a newcomer, you get the top bunk. That's no privilege: your bunkmate is unlikely to let you
hang your legs over the side. Savvy inmates try to avoid a cubicle "on the waterfront," across from the
bathrooms, where the flushing can be heard all night. Mr. Novak said his two-man room at Eglin was
literally an office cubicle. Think of the cubicles occupied by the minions at your company, and imagine
sharing one as living quarters with another person you may or may not like for the next several years.
If prison camps are not "Club Fed," neither are they arenas for violence. Newcomers often are terrified by
the possibility of forced sex, but former inmates and prison officials agree that sexual assault in federal
prisons is rare, even at the highest security levels, and practically unheard of in prison camps. Former
inmates say that while officially forbidden, consensual sex is common and available.
Because incidents of violence are likely to land camp residents in tougher prisons, the level of violence is
low at most camps, though fights do break out. A lawyer who served a year on insider trading charges,
who asked not to be identified, said his camp's inmates included overflows from Wisconsin's state prison
system. "We had a fair amount of gang problems with the Wisconsin people," he said. "They hit this one guy
over the head with a baseball bat in the kitchen. They beat him up really bad."
Barry Minkow, who served 7.5 years after using his ZZZZ Best carpet cleaning company to defraud
investors, predicted that some inmates would try to "shake down" any big-name Wall Streeter who ends up
in prison, for money or favors. "They'll tell them, you shook down investors, I'm going to shake you down;
you better pay me to protect you," he said. "It's repulsive, but it'll happen." Mr. Minkow's advice: just say
no. Usually, he said, that works.
For any inmate, there is always the chance of ending up in "the hole," or solitary confinement. In some
camps it's not so solitary. A former inmate at the Oxford, Wis., prison camp said its "hole" was hot and
packed with prisoners in two-person cells, with bright lights on 24 hours a day and raucous noise all night
long. A doctor sentenced to prison camp for Medicare fraud, who asked not to be identified, said exile to
the hole often seemed arbitrary. "I was in with a well-known, prominent real estate executive whose wife
was having a baby," he recalled. "He told the minister he was beside himself with the need to be with her for
the delivery. He was turned in as a flight risk and sent to the hole." More typically, it's a fight that leads to
the hole.
The risks of violence rise if you are transported to another prison or sent to testify at a trial. You'll be put in
leg shackles, handcuffs and a "belly chain" to tie it together, and placed in a bus or a van with inmates who
could come from any federal prison, including the highest-security ones. Inmates call these trips "diesel
therapy."
Webster L. Hubbell, the associate attorney general in the first year of the Clinton administration who served
an 18-month sentence, mostly at a camp in Cumberland, Md., for crimes related to the Whitewater
scandal, said he flew "Con Air" to testify at trials in Arkansas. Mr. Hubbell said his fellow passengers,
chained and shackled, flew five abreast to a hub in Oklahoma City. Before boarding another plane, he'd
spend the night with a general prison population. "All of a sudden, you're with 500 people you don't know;
some of them are serious offenders," he said. "You don't know what their hot buttons are."
The most common advice for staying out of trouble is universal: do your own time. In other words, mind
your own business, avoid confrontation. Mr. Novak has assembled a list of basic rules of prison etiquette
that he's published in a 200-page manual called "Downtime: A Guide to Federal Incarceration," for which
he charges $39.95. The list includes: Don't rat. Don't cut in line. Don't ask. Don't touch. Pay your debts.
Flush often. Don't whine.
According to Mr. Novak, many white-collar inmates tend to be whiners, holding a sense of entitlement,
complaining about food, offensive language, the closeness of quarters and the educational level of the staff.
"The other inmates have kids at home, wives who might be cheating on them, pending divorces, bankruptcy
proceedings," said Mr. Novak. "Everyone has their own troubles, so shush up." Nobody, he said, wants to
hear you are innocent.
The most productive way to serve your time, former inmates say, is self-improvement. Yes, several camps
located at former military bases have tennis courts, now called "multi-use surfaces" that accommodate
volleyball and basketball. Many inmates end up in better physical shape than their office careers ever
allowed. Education in the federal prison system is widely considered a joke by inmates, but most camps
have a library and, of course, there is plenty of time for reading and writing. Inmates can receive books by
mail, although storage space is limited. They can subscribe to magazines, except those deemed
pornographic. Mr. Hubbell advises anyone serving time, particularly those with shorter sentences, to
consider it a sabbatical. "Or look on it as a monastery, though without the Gregorian chants," he said.
Mr. Minkow spent four years of his sentence doing harder time at a medium-security prison. His stay was a
lot tougher than camp. He recalled watching a fellow inmate get into a fight, which moved outside where his
friend got slammed in the head with a 25 pound weight-lifting plate. "It pretty near tore his ear off," Mr.
Minkow said. Still, he credits his term for helping to turn his life around. "In my case, the system worked,"
he said. Mr. Minkow is now a preacher at the Community Bible Church in San Diego, and a spokesman
for the Fraud Discovery Institute, which evaluates corporate systems to identify areas vulnerable to fraud.
On Aug. 2, Mr. Minkow had the final three years of his probation removed, with the support of the
prosecutor who tried him. The judge encouraged Mr. Minkow to use his business talents to fight fraud.
Mr. Minkow's hard-won advice: "Don't fail jail. Don't leave the same way you came in."
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