An oldie (May 2013) but goodie from Absolute Return:
On May 13, Level Global Investors co-founder Anthony Chiasson was sentenced to more than six years in prison.
He'll be joining a small but growing number of incarcerated hedge fund professionals thanks to the government's aggressive prosecution of insider trading cases. Galleon Group founder Raj Rajaratnam is serving an 11 year prison sentence. FrontPoint Partners portfolio manager Chip Skowron is in for five years. SAC Capital Advisors PM Donald Longueuil is nearing the end of a 30-month term.
They and others from the industry had elite legal help, but were they ready for life inside the big house? What type of personal transformation is possible once behind the razor wire? And is there anyone to help this relatively fortunate group?
That's where Jeff Grant comes in. As founder and director of the Progressive Prison Project in Greenwich, Conn. and head of prison ministries of the First Baptist Church in nearby Bridgeport, Grant has devoted his life to helping prisoners. While he has focused on poor communities, Grant has increasingly worked with people accused of white collar crimes, including hedge fund managers, in learning to cope with life in prison.
Grant's advice comes from personal experience. In 2006, he was sent to a low security federal prison for 14 months after pleading guilty to federal criminal fraud charges. A corporate lawyer, Grant operated an office in Mamaroneck, New York. In the aftermath of September 11, 2001, he fraudulently claimed to have a Wall Street office that was hurt by a decline in business following the terrorist attacks in order to obtain a low-interest $247,000 loan under the U.S. Small Business Administration's Economic Injury Disaster Loan program (he repaid the government $365,000 as part of his civil settlement, including penalties).
Grant is writing a book entitled “The Art of Surviving Prison" due out this fall. Absolute Return asked him about his work and how it relates to the hedge fund community.
Absolute Return: How did you become involved in helping prisoners?
Grant: The most obvious answer is that I served time in Federal prison for a white-collar crime, and I had to work my way through my own feelings of shame and remorse. This put me in touch with others' feelings about these issues, too. Prison served as a time of transformation that influenced me to attend Union Theological Seminary and then to my calling in prison ministries.
There are a few lessons about prison that I think might be helpful to hedge funders. It might be comforting to know that I never really felt threatened, but there was a big difference between not feeling threatened and the realization that prison could be a very dangerous place. I realized that I had a few things going for me in order to survive. First, I was old. At 48, I was older than most of the other inmates and was outside of my fellow inmates’ need for bragging rights. Second, I had a skill. Once word got out that I had been a lawyer, this was a highly sought after commodity, although I never accepted any money or favors. Third, I learned, albeit the hard way, that the best way to earn respect on the compound was to simply pay respect to everybody. Respect was the absolute most important thing in prison. It came in all kinds of shapes and sizes, and was expected in all kinds of ways in return. It was a wolf pack and I was the omega.
I walked 3,500 miles around the exercise track in one year there. Whoever wanted to walk and talk with me could. It was a rich beautiful experience in a very stark and barren place.
How did you begin working with hedge fund guys?
It happened quite unexpectedly. I live in Greenwich, where there are many hedge funds, and word got around about my personal experience and my work in inner city prison ministry. I had been moonlighting in helping white-collar types on an ad hoc basis for years. Then one afternoon last year I received a call from the friend of a hedge fund manager who had less than five weeks before he was to report to Federal prison. Nobody had ever discussed with him and his family anything that they would need to survive the ordeal ahead. The three of us met together in a diner and it was eye opening because I realized a trend--there were a lot of white-collar families with little or no places to turn for experienced and compassionate support.
I founded the Progressive Prison Project in Greenwich as a direct outgrowth of my inner city prison work at the First Baptist Church of Bridgeport, and as Vice Chairman of Family Reentry, a nonprofit serving the ex-offender community of Fairfield County – the disparity between how they the legal system treats the rich and the poor is a well documented issue. But I was also hearing these other stories about the isolation felt by people accused of white collar crimes, and the issues of their families’ who had done nothing wrong but were suffering scorn and ridicule in their communities. I felt that if I could bring people and stories of all communities closer together, everyone could benefit.
I understand you can't use names, but can you characterize those from the industry you've worked with and what their situations were?
I am meeting with an ex-employee of a large Stamford-based hedge fund that's been in the news a lot. He's been notified as the target of an investigation, so it's likely he'll go to prison. Earlier preparedness is always a good thing. For him it was first things first: he needed assistance in finding substance abuse counseling for alcohol and drugs and a rehab program. There are marital concerns: whether his marriage will survive. That's always the case, by the way. There are also some broader psychiatric issues. And last on the list is vocation. How is he going to make a living? How is he going to support his family? What are they going to do during the imprisonment?
Another hedge funder, the guy I met with in the diner, told me that he had what he called an army of professionals and had everything covered. As the conversation unfolded it became clear that although the lawyering and many of the other professional pieces had been handled well, nobody had ever discussed with him, or his wife, how to survive the prison experience and then put their lives back together on the other side.
I asked him, for example, if he understood that once he surrendered he would be a prisoner of the Federal Bureau of Prisons, and that it was possible that he would be placed into the solitary unit for days or weeks before he was put on the main compound. Did his wife know how to track his movements if he was transferred to another prison? Did anybody prepare his wife for her first visit to the prison visiting room, so that she wasn’t sent home due to wearing the wrong clothing? Or because of incidental drug residue on her clothes or money she might bring in to buy him food in the vending machines? He looked dumbfounded. I suggested that he start taking notes. We called the waiter over and asked for a stack of place mats and a pen. We talked for the next four hours.
What do you usually help them with?
Mostly, I help with the isolation they experience from being cut off from their community, and from their inability to find any prison-related or other services to give them good, dependable information and support. It's not their fault. There are actually many more criminal justice and prison ministry-type services available in communities like Bridgeport than there are in places like Greenwich.
My basic advice is to mind your Ps and Qs. Be very respectful and manage your day pretty closely. There was one very well known hedge fund guy in particular who had a very gregarious personality. He decided he would be authentic to himself. It worked out great for him. In being authentic he was able to be friendly and engaging in a non-threatening and very real way. The things that made him successful in the hedge fund world actually made him so in prison. I wouldn't say that would work for everybody, but his particular manner was not very threatening to begin with. It was very engaging. He was able to befriend everybody. He didn't use wealth or power as his calling cards. He used humor and vulnerability. He was clearly in the midst of some sort of spiritual transformation that made him more vulnerable in a positive way.
So being vulnerable can be an asset?
It's counterintuitive. In a minimum security prison, there's a lower ratio of guards to prisoners. You actually have to be more aware of your surroundings. Everything is dramatized on TV. What happens in prison most of the time is very boring. You get to read a lot. But once in a while something happens that is outside of the ordinary where you have to pay a lot of attention to it. For those things you have to be prepared. And unfortunately in prison those things are way outside the ordinary.
What are some of those dangers?
In a minimum security prison there are gangs. They are not allowed to rove or collect, yet they are there. It's mostly for mutual protection. There's generally no pressure to align with a gang when you show up. Outliers in terms of age or socioeconomic background are pretty much left alone.
You can still do something wrong. It's unfortunately easy to maintain an attitude of entitlement that wouldn’t be looked upon favorably. Bumped up against people of lesser economic circumstances could lead to an issue. It could be on the chow line. It can be getting a haircut. It can be at the infirmary. Anywhere people have to wait their turn and where they're not doing that, for example.
Once you draw attention to yourself, then you can get hurt. I've seen people get beat up. I've seen people get killed. I never saw a hedge funder or doctor or lawyer or stock broker get killed, but I did see gang members get killed in prison. And I was in a minimum security prison. It was the first time I had ever seen someone get killed in my life. So I help people understand that something like that can happen in a moment with no notice whatsoever. It's terrifying.
When people go to prison there's kind of an egalitarianism that takes over and a relearning state where the things we were supposed to learn in kindergarten get relearned. Please and thank you.
Respect in prison is mostly a matter of learning what not to say. It can be an incredibly counterintuitive assignment for the types of people who become Wall Street executives. It is a real comeuppance when they learn that nobody cares about what they have to say about anything, or that if they do it can be for the wrong reasons. In one case, a former hedge funder made the mistake of talking about the sale of his Hamptons property. I think you can imagine some of the difficulties.
Can they use their money to buy protection?
Not that I know of....
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