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Go to jail: a corporate executive survival guide

Filed in archive corporate crime by leon on May 23, 2007

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So Richard Scrushy, who in 2005 managed to beat a fraud rap and potential 600 years in the slammer, has now been pinged for bribing former Alabama Governor Don Siegelman. He now faces 30 years in jail and will be sentenced on June 26.

Once upon a time, Government lawyers would have moved on. But times have changed.

"Once they have have identified a CEO as a target, federal prosecutors have been without fail unrelenting in their pursuit of those CEOs," former US Securities and Exchange Commission lawyer Jacob Frenkel told Bloomberg.

He's not wrong. Enron's former chief Jeff Skilling is now serving a 24-year sentence and Enron's founder Ken Lay had to die in order to escape jail and get declared innocent. WorldCom chief Bernie Ebbers is now doing 25 years behind bars, Tyco's Denis Kozlowski is in the pen too. As is Sanjay Kumar, the former CEO of CA, who was sentenced to 12 years in jail for his part in cooking the books.

And then of course, there's Conrad Black who faces the prospect of spending the next 102 years in prison.

The harsh sentences are part of a trend that might well reflect society's changed attitudes to securities fraud, something I have blogged on here.

And it's not just the CEOs either. Comverse Technology's former general counsel, William Sorin, has been sentenced to jail for his part in stock options backdating. The company's former CFO David Kreinberg is looking at doing time and the US is trying to extradite Comverse's founder and chief executive Jacob "Kobi" Alexander, who fled to Namibia rather than face federal charges of stock-option backdating, conspiracy, securities fraud, money laundering and bribery.

Yes, it's a long way to fall. One day you're a corporate high-flyer with the world at your feet. You're pulling in the sort of mega-bucks that affords prestige toys, and the next day you're in the pokey. From one of the smartest guys in the room, to the only guy. Usually, white-collar criminals have no one in there they know and prison culture is predominantly working class. Not too many professionals inside.

So how to cope? How do you survive? Here's a pre-prison prep from Portfolio.com..

Simple advice really. Get yourself an allowance, take care of business in advance and try and keep up your contacts.

Still, lawyers and people who work inside the system tell me that once they get over the initial shock and despair of being behind bars, white-collar criminals tend to cope well.

As psychopaths, their personality helps. They know how to manipulate others and they can use these skills effectively in jail. And with all that business acumen, they often provide financial advice, decipher legal documents, compose letters and even use social skills that can endear to fellow inmates.

Didn't do Marthalinks Stewart any harm. In her five months at a relatively soft "open" prison, Stewart rolled up her sleeves, scrubbed lavatories for 12 cents an hour and taught inmates how to crochet and practice yoga.







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