Vanity Fair: A Hedge Fund Ex-Con Finds It’s Hard Coming Home to Greenwich
We were prominently mentioned in this article about our friend Chip Skowron. Please feel free to email your thoughts and comments to me at [email protected].
“Jeff Grant, the lawyer turned minister who counseled Skowron before he entered prison, [is co-founder of Progressive Prison Ministries (prisonist.org), the world’s first ministry supporting the white collar criminal justice/economy exiled community]. Greenwich’s taste for schadenfreude, he says, has much to do with brute competition. ‘When anybody shows signs of weakness, everyone is feeding on the carcass—of the person or institution that’s been torn down,’ he says. ‘In Bridgeport, when someone goes down for a crime, the community rallies around to help the family. Here, we cast them out on an iceberg.’”
Chip Skowron at his home in Greenwich. “I really feel most comfortable in prison,” he says. Photograph by Jonathan Becker.
In early 2006, before the indictment and the headlines, before he was abandoned by most of the people he knew, Joseph Skowron III and his wife, Cheryl, were living in a tidy three-bedroom ranch home in Greenwich, Connecticut. In the early 20th century, Greenwich attracted flocks of industrialists and their descendants—Rockefellers and Morgans, beneficiaries of Carnegie Steel—who built manor homes on generous acreages. Always prosperous, the town was in the midst of another boom, and Skowron, who goes by Chip, was a member of the town’s new elite, a partner in a hedge fund called FrontPoint Partners. Since 2000, drawn by Connecticut’s relatively low taxes, the hedge funders had all but taken over Greenwich, occupying much of its office space and replacing its stately Victorians with garish mansions, priced to move at $15 million. As VANITY FAIR observed at the time, “The people who can afford to live in Greenwich these days run hedge funds.”
Among the aggressive, often eccentric billionaires who dominated the town, a peacock spirit prevailed. Paul Tudor Jones II, the founder of Tudor Investment Corporation, built a Monticello-like mansion so imposing as to overshadow the yacht club next door. Down the shoreline, Edward Lampert, the founder of ESL Investments, bought a $21 million home, only to tear it down and erect a sprawling new estate in its place. And in the rural backcountry, Steven Cohen assembled a 32,000-square-foot spread that included an ice rink to rival Rockefeller Center’s.
At 36, Skowron didn’t quite have ice-rink money. He had begun his career in finance just five years earlier, as an analyst at Cohen’s SAC Capital Advisors. But before long, he was overseeing some $1 billion in assets at FrontPoint, where one of his partners was Steve Eisman, the shrewdly bearish housing-market investor profiled by Michael Lewis in The Big Short. Cheryl was expecting the couple’s fourth child, and Skowron wanted a home to reflect his success. In early 2006, he bought a three-acre tract on Doubling Road, a quiet, curving lane lined with old trees and low stone walls, for $4.1 million. Across the street lay Greenwich Country Club, whose membership roll included Gerald Ford, Tom Seaver, and various Fortune 500 executives. Skowron hired an architect to design a New England shingle-style home of more than 10,000 square feet. Completed, it had seven bedrooms, four fireplaces, a pool, a wine cellar, and a seven-car garage. Views stretched to Long Island Sound.
Cheryl had no interest in the Greenwich social circuit, with its acquisitive pulse. But Chip reveled in it. The Skowrons, already members at one of the town’s several country clubs, applied to join another. Greenwich has a dense calendar of charity galas, and Skowron made sure that he and Cheryl turned up at the right events. He joined the Monticello Motor Club, a speedway in upstate New York where Jerry Seinfeld is a member. One item in his auto collection, an Alfa Romeo 8C Spider, once appeared on a list of Greenwich’s most expensive cars. He traveled widely and lavishly. In Paris he favored the Plaza Athénée; in Barcelona, the Hotel Arts.
Among friends and family, Skowron was known to be generous, loyal, and fun-loving—a griller of burgers and sharer of beers. But he was emotionally exhausted, wrung out by the pressure of keeping up appearances and increasingly troubled by a sense of emptiness. “I wanted to be somebody that was important,” he recalls. “I wanted to accomplish, succeed, to be satisfied. It was all illusory.”
In November 2010, the façade began to slip. Press reports indicated that Skowron had become a target of a federal investigation into insider trading spearheaded by Preet Bharara, the U.S. attorney for the Southern District of New York. Marshaling tactics traditionally associated with Mafia and narcotics investigations, Bharara and his team uncovered webs of criminality that stretched across the hedge-fund world and beyond. Skowron stood accused of bribing a French doctor with wine, cash, and travel in exchange for confidential information from a clinical drug trial—a scheme that allowed FrontPoint to dodge some $30 million in losses. He was suspended from the firm, which quickly collapsed. More than 200 people lost their jobs. Charged with securities fraud and obstruction of justice, Skowron faced up to 30 years in federal prison.
Like many people contemplating a once unthinkable future, Skowron found himself drawn to religion. He read Scripture obsessively. As he considered whether to fight the charges against him—charges he knew to be legitimate, and which did not encompass the whole of his insider-trading résumé—a passage from Matthew seemed especially relevant: “For whosoever will save his life shall lose it: and whosoever will lose his life for my sake shall find it.”
Skowron decided to plead guilty and was sentenced to five years. Prison remained a frightening prospect. He knew that Cheryl would be left alone with four children in the big house on the hill. But incarceration also presented an opportunity. Perhaps, through the crucible of imprisonment, Skowron might escape a life of grasping narcissism from which he could not otherwise tear himself away—a life he had come to believe would destroy him. What he didn’t yet know was that the challenges of prison would pale in comparison to those of coming home.
Skowron was far from Greenwich’s biggest hedge-fund manager to face prison time. Following a seven-year investigation, Bharara’s office accused SAC Capital—the firm run by Steven Cohen, Skowron’s first Wall Street boss—of trafficking in “inside information on a scale without any known precedent in the history of hedge funds.” Cohen avoided criminal charges, but SAC was forced to admit to an institutional culture of illegal trading, paying $1.8 billion in fines before shuttering in 2013.
Still, Skowron was prominent enough to become a cartoon of financial excess. New York highlighted his Ferrari 458 and Porsche Cayenne; a New York Post headline sneered, CHIP’S OUT OF LUCK. With his blond hair, blue eyes, and prominently dimpled chin, Skowron made a natural subject for Wall Street caricature. But he’d spent most of his life pursuing a less narrowly self-interested profession. When he was 11, his father was power washing their home, in Cocoa, Florida, when he fell off the roof. Skowron discovered him crumpled and unconscious, a picture of powerlessness. The scene terrified him. He decided to become a doctor, the kind who could fix such injuries.
After college, Skowron received a full scholarship to a combined M.D./Ph.D. program at Yale. During his residency in orthopedic surgery at Harvard, he used his vacation time to provide medical treatment in places like Kosovo and Guatemala. But he quickly grew disenchanted. No matter how many surgeries he performed, there was always pressure to do more. The older doctors he knew seemed discontent; many had failed marriages. His disillusion was bewildering, akin to losing faith. But Skowron had lost neither his sense of exceptionalism nor his outsize ambition. Soon after dropping out of Harvard, he decided to go into finance.
His timing was good. Eager to add an intellectual gloss to his already fantastically lucrative empire, Cohen was hiring professionals with Ivy League pedigrees and turning them into specialists in areas like energy and technology. Skowron’s background made him perfect for health care, one of Cohen’s favorite sectors. Instead of saving lives, Skowron could make a fortune tracking real-world events—the discovery of a new treatment, say, or the failure of a clinical trial—that might spark profitable volatility in health care stocks. In 2007, only six years after beginning his career in finance, he made $13.5 million.
Skowron’s fall was jarring. But he quickly had reason to think that, in pleading guilty, he had made the right decision. On his first day in prison, at a medium-security facility in Pennsylvania, another inmate extended his hand.
“Hi,” the man said. “My name is Chip.”
Unbelieving, Skowron replied, “My name is Chip, too.”
“Let’s be clear about this,” the man said. “I’m Chip 1, you’re Chip 2.” Noticing that Skowron was holding a Bible, Chip 1 quoted from Romans: “Just remember that all things work together for good.” They embraced, and Skowron felt confirmed in his newfound belief that he was being guided by God.
About 70 percent of Skowron’s fellow inmates were drug offenders, many of them poor young men of color. He saw gentler versions of Hollywood prison tropes: friction between inmates and guards, black-market intrigue, prisoners who liked to stir chaos just to thwart boredom. But the distance between his expectations of prison life and its reality was vast. Skowron had imagined that things would be horribly dull: rows of men staring into space, counting hours. In fact, prison was dynamic—rich with incident and culture. Some of what happened there seemed to shimmer with biblical resonance. One day, the prison was beset by a plague of snakes; they dropped from a light fixture onto men watching soap operas and rose out of a drain in the shower, where an inmate known as Joe the Greek was bathing. Then there was Chuck, a powerfully built gym buddy of Skowron’s, who began rapidly losing weight. By the time an appropriate doctor was consulted, his cancer was beyond curing.
It wasn’t all grim. One day, an inmate known as Gunz offered to give Skowron a tutorial on curried jack mack, a delicacy involving the bone-in mackerel sold at the commissary. Another prisoner, Kareem Burke, who went by Biggs, provided a pepper and an onion for the dish—a rare stash of fresh produce. Burke, who had cofounded Roc-A-Fella Records in the 1990s with Jay-Z and Damon Dash, was in prison for conspiring to distribute marijuana. Despite their differences, he and Skowron bonded quickly. Both men had lost their mothers at a young age; now, in quick succession, both came to consider themselves born again. Their high-profile friendship attracted others, and they were soon joined by a large group of inmates for regular meetings in Skowron’s bunk. The gatherings resembled AA meetings: discussions of sin, suffering, and the search for meaning and consistency in the wake of trauma. Burke spoke about his guilt for failing to support his older brother, who had been murdered years earlier. Others regretted infidelity. Many admitted their failures as fathers.
Prison ecology isn’t known for rewarding vulnerability, but the bunk became a foxhole, fostering a spirit of confession and mutual reliance. Among the men who met there, Skowron found he could expose himself in a way he had never been able to before. When news of his legal trouble broke, his Greenwich social circle had vanished. He was ejected from his country club, and his family felt humiliated by the publicity. Worried that he might be wearing a wire, former business associates wouldn’t speak to him. The abandonment surprised him. Skowron believed he’d had deep, nuanced relationships. On reflection, he saw that most of them had been based on the conference of status. Virtually none of his old friends visited him in prison.
As his relationships with the other inmates deepened, he became ashamed of his pride in his education and his wealth, which had insulated him in a cocoon of superiority. He saw that it had enabled a false, destructive worldview—the kind that, widely held, abetted mass incarceration. The people in prison were not who he had expected them to be, and prison, he now believed, was not where the vast majority of them belonged. Increasingly, he felt, they were his brothers.
Following his release, in November 2015, Skowron returned to live with his family in Greenwich, where they remained comfortably situated at the house on Doubling Road. There was the pool and there was the billiard room, with its Oriental rug and its Monaco Grand Prix posters. There was the view of the country club. Skowron’s office, paneled in dark wood, was like a stage set, accessorized with props from a prior life: framed credentials on the wall, a shelf dedicated to Ferrari paraphernalia, a photo with George and Barbara Bush.
Skowron was barred from working in the securities industry, but he quickly took ownership stakes in several businesses—apparel, medical marketing, health care, car sales—drawing on many of the same qualities that once made him an effective hedge-fund manager. Within two years, he found himself meeting with a top executive at HSBC, slipping almost seamlessly, he marveled, back into upper-corporate echelons. He enjoyed driving his silver Porsche Panamera, which smelled sweetly of his cologne. He kept his taste for fine wine.
But Greenwich was full of social trip wires. At Whole Foods or the park, Skowron was likely to encounter people he had caused to lose jobs or money. His neighbors were polite but distant. Not long after coming home, Skowron suggested to his wife that they have dinner at Mediterraneo, a favorite restaurant downtown. “I’m not going to that hedge-fund hangout!” she said. Ultimately, citing the Parmesan-encrusted halibut, he convinced her—only to run into Gil Caffray, a founding partner of FrontPoint.
Shortly before going to prison, Skowron had met with Jeff Grant, a former lawyer and onetime Greenwich resident who had spent 14 months in federal prison for wire fraud and money laundering. Grant, who had become a minister, counseled numerous hedge funders during Bharara’s insider-trading probe, and the chilly reception that greeted Skowron in Greenwich was familiar to him. It could seem in part like an aversion to self-knowledge; to interact with men like Skowron was to confront the sometimes suspect means by which the town maintained its status as one of the world’s most privileged enclaves. “It’s a mirror on themselves,” Grant says.
