White Collar Cons Say Goodbye to Club Fed

July 1, 2003 -- It may be inside-trader Sam Waksal's first choice to while away the next seven years — but it's not exactly Club Fed anymore.

Instead of fences, guard towers and barbed wire, Federal Prison Camp Eglin in Fort Walton Beach, Fla., is ringed only by wide-open spaces, old oak trees hung with Spanish moss and a yellow boundary line painted on the ground.

But long gone are the days when inmates at Camp Eglin dressed in regular clothes and easily won parole after enjoying the taxpayer-funded tennis courts and swimming pools.

"It really hasn't been for some time," said David Novak, who spent nearly a year at Eglin in 1997 after pleading guilty to mail fraud and falsely reporting a plane crash. " 'Club Fed' is kind of an urban legend at this point."

Tennis courts and swimming pools have been removed, as they have from almost all federal prisons, and while there is still a golf course at nearby Eglin Air Force Base, inmates rarely step foot on it — and when they do, it's to maintain it, never to play it themselves.

Prisoners at Eglin now wear a khaki uniform with their ID number ironed on their breast pocket. One of the most difficult things, Novak said, is that phone time has been reduced to 300 minutes a month.

That means the white-collar criminals, who are more often family men than other criminals, have only five hours to keep up ties with their loved ones.

Inmates at Eglin once enjoyed frequent furloughs, but experts who advise white-collar criminals on their prison experience now often tell their clients not to expect their wives to be there when they get out.

It's Tougher All Over

The changes at the old Club Fed reflect a general toughening of the treatment of all kinds of convicts in the federal system.

The government has also stiffened sentences for white-collar criminals. Mandatory guidelines established in 1987 mean sentences are longer, and convicts have fewer chances to get out early.

Federal parole has been abolished and the possible reduction for good behavior has been minimized.

And, on the inside, white-collar criminals face the same indignities as any other prisoner.

Even in minimum-security facilities, upper-crust crooks are a very small minority. The rest of the population mostly comprises drug offenders, but it can also contain car thieves, bank robbers, kidnappers and murderers.

The physical appearance of Eglin may have its appeals, but it is like all prisons on the inside.

"Minimum-security facilities don't have barbed wire fences, but other than that, it's a prison," said Novak, who now runs David Novak Consulting, which advises white-collar criminals on how to cope with life on the inside. Inmates are physically barred, told where to stay, and lose control of their schedule and life.

In with the Common Criminals

And with overcrowding a common malaise of the penal system these days, they may also have to mix with a more hardened jail population.

In October 2001, Dr. Niels Lauersen was sentenced to seven years in Federal Prison Camp Allenwood in Montgomery, Pa., for filing fraudulent insurance claims. But because of overcrowding, he spent his first two weeks in what inmates called "the hole" — an area where the unruly are usually sent as a punishment.

He shared his cell with another man, the bathroom was inside his cell, he was kept there 24 hours a day, and it was "very, very, cold," he told New York Magazine. "The hole is the worst," he said.

Allenwood, like Eglin, is a minimum-security institution, but even the main areas of such facilities are in some ways less desirable than low- or medium-security prisons, Novak said.

Prisons work on an incentive system, which means the higher-level security prisons usually have better facilities, he said. In a lower-security prison, inmates don't need as many carrots.

Inmates in minimum-security prisons usually sleep in dormitory-style quarters, but Novak said the noise from that was one of his greatest pains.

"I'd rather sleep two men to a room, locked in for 10 hours every night than in a dormitory where there's snoring and everything else," Novak said.

Visions of Oz, Fears of Shawshank

Still, Forbes magazine has called Eglin the prison of choice for white-collar criminals, and Waksal, the founder and chairman of bio-tech firm ImClone Systems Inc., is angling to serve his seven-year insider-trading and tax-evasion sentence there.

Some former white-collar criminals have said the experience of going from limousines and mansions to cramped cells and prison clothes is especially difficult, but their fate is far better than it would be in a state lockup.

There's a "real difference" between the two, said Tom Brush, an attorney and co-director of the National Resources Center on Prisons, a Cincinnati-based group that studies issues around the expansion of the prison industry.

"It's not what some prisoners would call hard time [in federal prison]," he said. "In general, minimum-security prisons are less dangerous, though occasionally you have assaults."

Familiarity Breeds Security

Novak said Eglin was by no means the best facility in the country, but it was certainly in the top half. It is a stand-alone facility, and doesn't have a more hardened prison population nearby, but it is also one of the older prisons.

Eglin's staff is also not as cosmopolitan or educated as many high-brow criminals may be used to, Novak said. "Clearly you're in the heart of Dixie," he said. "It's not like Miami, more like Alabama."

There has been speculation that Waksal wants to stay at Eglin because he has family nearby. But Eglin would probably still be popular because it is familiar, and a great deal of fear about prison comes from the unknown, Novak said.

He said that's why he wanted to go to Eglin as well. "I had seen the facility, I knew what it looked like," he said.

Of course, Waksal has no control over where he will be imprisoned.

Prison officials determine where a convict is sent based on a number of variables like the length of the sentence and the prior record. "The determination of security level is completely formulaic," Novak said. "One variable not used is 'Is this guy white collar?' "