YOU ARE HERE: LAT HomeCollections

Corporate Criminals Angle for Eglin Spot

A minimum security federal prison in Florida is where some offenders hope to serve their time.

June 16, 2003|Paul Thomasch | Reuters

Forget Disney World, Miami's South Beach or the Florida Keys.

For some of corporate America's best-known bad acts, the Florida destination of choice this year may be a spot just outside Fort Walton Beach, where they can relax in the sun, make a few phone calls or play an occasional game of tennis or softball.

Welcome to Eglin Federal Prison, a minimum security facility where white-collar criminals dress in khaki uniforms, do manual labor and reside in dormitory-style facilities.

One executive already angling to serve his jail time there is Samuel D. Waksal, who founded ImClone Systems Inc. and last week was sentenced to seven years in federal prison.

Ultimately, the U.S. Bureau of Prisons will decide whether Waksal -- sentenced for securities fraud, obstruction of justice, perjury, bank fraud and tax evasion -- will serve his time at Eglin. If so, he could find himself in some powerful company, considering the number of executives under investigation these days for their roles in corporate scandals.

Eglin is the prison of choice for white-collar criminals, who have dubbed the facility "Club Fed." Forbes Magazine once ranked it as the "Best Place to Be Incarcerated."

Indeed, it has a distinguished list of past and present inmates.

Shoe designer Steve Madden was at Eglin as well as pitcher LaMarr Hoyt, sent there to serve time on drug charges, and Watergate luminaries H.R. Haldeman and E. Howard Hunt.

The all-male prison has a staff of 143 to oversee about 850 inmates, who are eligible for furloughs, can receive visitors and are allowed to make collect phone calls, said Myra Lowery, a spokeswoman for the prison, located on a U.S. Air Force base.

"We have inmates who are nonviolent, who have no serious history of violence or escapes," Lowery said. "We may receive drug offenders, and there may be someone with a number of other crimes that you consider white-collar, like mail fraud, bank fraud or tax evasion."

Waksal, whose lawyer said that serving his sentence at Eglin would allow him to be closer to his parents, will receive an "inmate handbook" wherever he eventually lands. If that's not sufficient, plenty of how-to guides are available.

Among others, are "Who Moved My Soap? The CEO's Guide to Surviving in Prison," by Andy Borowitz or "DownTime -- A Guide to Federal Incarceration" by David Novak.

Borowitz's book includes a guide to prison dining, a glossary of prison slang and advice on how to avoid getting stabbed in the back.

Novak has taken it one step further by setting up a consulting business for corporate felons. Novak, who owned a flight school in the Seattle area and was a consultant for a unit of Microsoft Corp., landed at Eglin after pleading guilty to mail fraud and falsely reporting an airplane crash. He started the consulting business in the late 1990s (

One securities fraud offender writes on the site: "Through your help I was able to actually educate my attorney about what could be done to lower my net sentencing exposure."

To be sure, prison time won't be easy for executives -- even at Eglin, which once allowed inmates to wear their own clothes and have overnight guests. Prison authorities have since removed some of the niceties.

"How has it changed? Rules and regulations change," Lowery said. "That doesn't mean it's for the bad or the good."

Los Angeles Times Articles