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 Progressive Prison Ministries in Greenwich, Conn. and (former) 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 counter-intuitive 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.
These guys must lose a ton of weight and get into shape, right?
That’s generally true. I lost 60 pounds in prison. That was from my walking and a very specific daily regimen that I embraced. I did pushups and got to the point where I could do 75 in a row. I can only do 35 to 40 now. I’ve put back on a little of the weight [laughs].
How do Wall Street skills usually translate in prison?
I assume by Wall Street skills you mean intellect, ambition, independence, wit, ability to form quick connections. These skills are not only in large degree useless, they are probably counterproductive. More useful are concepts like respect, restraint, care, self-care, compassion, community, transformation, and spirituality. If I had to choose one to remember in prison as I mentioned above, it would begin and end with respect. Of course, respect in prison means something quite different than in a world where people got mostly everything they wanted.
Here’s my story about how I learned respect in prison: One night, when I was only there about three weeks or so, I was lying on my bunk with a pillow on my face just trying to get some sleep. Or some quiet. Three Latinos were holding a conference of some sort right outside the entrance of our cube. It sounded like they were screaming and yelling at one another. I couldn’t take it so I sat up in bed and screamed for them to “shut the f–k up.” Of course they ignored me. I was lucky that was the end of it. My cellie was sitting on his bunk and stared me down before he asked me if I was trying to get myself killed. I just stared back at him. I told him I couldn’t take the screaming anymore. He looked at me and calmly explained to me that those Latinos were
people. Instead of screaming, he suggested that if I simply peaked my head into the hall and asked them politely to keep it down, or move their meeting to another location, they probably would have obliged.
Are there parallels between your work with those from poorer communities in Connecticut, like Bridgeport, and wealthier ones, like Greenwich?
The difference is in the communities, not in the people. Places like Bridgeport have an embodied experience of crime, criminal justice and prison. People there live with it in their midst and understand its intricacies. For some, there is no shame in being arrested or going to jail; it’s just part of the deal. In Greenwich, however, prison is so far from the daily life and experience. It’s like a deer getting caught in the headlights. I have found that the only way to minister to those suffering in Greenwich is to bring the two communities closer together so that the experiences and lessons learned by one can be of service to the other. That’s what makes the concept of The Progressive Prison Project so powerful.
Here’s a piece of useful information that I picked up in Bridgeport that can make a huge quality of life difference immediately. When a hedge funder first gets to prison, his senses are likely to fail him to the point where he is likely forget his own address and phone numbers, and his family’s and friends’, too. Yet, in order to fill out phone call and visitor request forms, he will need all this information. What to do? A couple of days before he reports to prison, he can mail himself the names, addresses and phone numbers. Prison may be a difficult place, but they have to deliver the mail. Brilliant.
Any other tips?
Maintenance of a solid long term address and home is important. When it’s time to be released from prison, you have to get released to a home. The problem is that life goes by for the family on the outside. Typically the hedge fund guy in prison isn’t in control of what happens on the outside: the family moves, children get married. If there’s an ability to control one stable piece for as long as that person is in prison, say an apartment–something–then he’s likely to have stable place to come home to which will ease the way for him to be released early and be able to come home early. If a hedge fund guy lives in Connecticut, goes to prison in Pennsylvania, and his wife moves to California, it’s very difficult to get early supervised release because he doesn’t have a place to come home to in his home state. These are issues that can be considered in advance.
They need advice on getting family in to see you without getting turned away from the visiting room line. It’s not an easy thing to know before you go through it. For example, if females are wearing undergarments with wire bras, they will be thrown off the visiting line and sent away. The metal detector will detect it. It could be perceived as a dangerous object and they won’t check what it actually is. There’s also the drug scanner, which can be used randomly and detects micro amounts of various forms of drugs. You need new or recently washed clothing. Washing up. Not touching money. Not eating breakfast. Not anything where you might come into contact with something that has trace residues of drugs. Money contains huge amounts of trace residues of drugs. Literally when people come to visit they sleep overnight, they get washed up and go right to the line without touching anything and try and get through without these scanners picking up something that might incidentally be on their clothing.
What do you hope for those from the hedge fund industry during their time in prison?
Great leaders who have spent time in prison have written about two things they have been able to control: their bodies and attitudes, and their ability to help others. This has been absolutely true in my experience. It is my hope that anybody who is, or might be, heading to prison, uses their time wisely, as a time of great personal transformation in devoting part of each day to mind, body and spirit; and in commitment to helping others.
What books do you recommend to these guys?
The seminal book for me was “Man’s Search for Meaning” by Viktor Frankl. I also recommend “Letters and Papers from Prison” by Dietrich Bonhoeffer. If people can get through it, “The Gulag Archipelago” by Aleksandr Solzhenitsyn. Nelson Mandela’s “Long Walk to Freedom.” The hedge funds guys like all of them. I would rather they identify with the concept of captivity than the concept of being criminals. There’s a transformation within the captivity that they can embrace and learn and grow from if they choose to. Other people have. They don’t have to view themselves from the negative.
Have you watched any significant transformations?
I was called a few weeks ago by a former hedge funder I hadn’t met with in a couple of years. He looked like the weight of the world was off his shoulders, had lost thirty pounds, and had a smile ear to ear. He looked nothing like the guy I remembered. He told me that he had been to prison and wanted my help in finding a new career. Without the monkey on his back of his old life and former problems, he felt free. Now, he’s in school to become a drug counselor.
That’s a noble goal for a lot of ex hedge funders, and it’s one of the professions that are open to them. I also know a hedge funder who has become a social worker. There are a lot of transformation stories.
Maybe it’s a case of viewing the glass as half full, but almost all I see are great transformations. Stock brokers who are now drug counselors, atheists who have found God, absentee fathers who have renewed relationships with their children. Why not? Most white-collar criminals can’t go back to their old live and careers, so what choice do they really have? Why not embrace a completely new life, with new options and new opportunities? The most fortunate are those who figure out that their attempts to solve problems in isolation did not work, and that they no longer have to go it alone. They figure out that some of us have been there before them and are willing to help. I feel blessed to have these families in my life.
This interview was condensed and edited.
Originally published in Hedge Fund Intelligence, May 20, 2013