Ex-portfolio manager’s 2013 guilty plea was tossed in June
Lee says he confessed to a 2009 trade he didn’t remember
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A Testimonial From Richard Lee: “Thank you Jeff for your counsel throughout these past several years. My family and I are grateful to you and Lynn, and are glad to be a part of the important work you are championing in the criminal justice community.” – Richard Lee, Illinois. Link to additional Testimonials here.
Richard is a member of our confidential online White Collar Support Groupthat meets on Mondays, 7 pm ET, 4 pm PT. Our 185th meeting is on Monday, December 30, 2019.
Richard LeePhotographer: Taylor Glascock/Bloomberg
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Richard Lee doesn’t remember the trades that upended his life.
A former SAC Capital Advisors LP portfolio manager, Lee managed a $1.25 billion fund for his boss Steve Cohen. He had tens of thousands of trades under his belt, so the roughly $10 million in Yahoo Inc.shares he bought on July 10, 2009, didn’t really stand out. But when the FBI approached him in March 2013, saying they had proof the investment was based on an illegal tip, the forgotten trades left him feeling trapped.
Lee wound up pleading guilty to insider trading and became one of eight SAC employees convicted in a sweeping government crackdown. Today, though, Lee is in the clear. After a favorable shift in the law and the emergence of new evidence, a federal judge in June threw out Lee’s guilty plea. Prosecutors last month dropped the case.
“Most people don’t understand,” said Lee, 40. “Why would anyone plead guilty to something that they hadn’t done?”
In his first interview since the case ended, Lee set out to explain why he would admit to insider trading he steadfastly denies took place. According to Lee and his lawyer, the former trader’s ordeal highlights what can happen when a busy investment professional is suddenly called to account for a handful of trades on a single day, years after the fact.
“There’s a misconception that portfolio managers and analysts and trading professionals remember every single trade that they did, regardless of whether it is completely lawful, in the gray area or illegal,” said Greg Morvillo, Lee’s lawyer. “You’re talking about four, four and a half years later. It’s very hard to remember the details of how a day evolved.”
Market Rumors
Prosecutors in Manhattan declined to comment. They initially vowed to retry Lee, pointing out he pleaded guilty to other illegal trades which altogether netted SAC around $1.5 million. But in court papers in November, prosecutors said they were dismissing the charges because of “the difficulty of securing evidence” in a decade-old case. The judge who tossed out his guilty plea in June had declined to take the additional step of declaring him innocent.
Still, Lee says he’s been vindicated.
“This is a real victory,” said Peter Henning, a law professor at Wayne State University and former federal prosecutor. “This doesn’t happen very often.”
The day of the Yahoo trades, Lee was a high-flyer in the alternative investment world. A 2001 Brown University graduate, he had arrived at SAC from Citadel LP, another elite hedge fund group, after stints at McKinsey & Co. and in private equity. At SAC, he was a member of the special situations group.
According to prosecutors, Lee bought Yahoo based on a call the same day with analyst Sandeep Aggarwal, who passed along a tip from a close friend at Microsoft Corp. that a rumored search engine partnership between that company and Yahoo would soon be announced. News reports on July 16, 2009, of a possible deal sent Yahoo shares up. A Microsoft-Yahoo alliance was announced on July 29, 2009.
Aggarwal pleaded guilty to insider trading in November 2013. Lee’s cooperation led to Aggarwal’s plea, and largely ended there, Morvillo said.
Lee said he moved in and out of Yahoo almost constantly in 2009, both before and after the Microsoft partnership. He said he didn’t remember his July 10 trades when he was approached on the street in Chicago by two FBI agents four years later, and he doesn’t remember them now. But he’s certain no one would have believed that.
“I felt very deeply that I had not committed insider trading,” said Lee, “but I couldn’t assert that to people because I knew I would just come across like somebody who was actually guilty of it but in denial.”
It didn’t help that his prosecution was part of a larger insider-trading probe targeting SAC and Cohen. The case’s high profile increased the pressure on Lee to plead guilty and cooperate, he said.
Lee pleaded guilty on July 23, 2013, and agreed to be a government witness against others. “I was sobbing in front of the judge and reading this thing I didn’t want to read,” said Lee. “Almost immediately after my guilty plea, I looked at and discussed with my then attorneys at the time about whether I could withdraw it.”
Avoiding Prison
Lee said Richard Owens, his lawyer at the time, advised against that, saying the former portfolio manager’s cooperation could help him avoid prison, where many convicted in the crackdown ended up. Owens declined to comment.
Two days after pleading guilty, Lee found himself cited by then-Manhattan U.S. Attorney Preet Bharara in his announcement of his big case against SAC. Bharara said Lee was part of a group that made SAC a “magnet for market cheaters.”
“I was at home watching it on TV,” Lee said. “It was surreal.”
The battle between Bharara and SAC riveted Wall Street at the time. While Cohen himself wasn’t accused of wrongdoing, SAC itself later pleaded guilty and paid a record $1.8 billion fine to resolve insider-trading claims. The firm later changed its name to Point72 Asset Management LP and agreed to manage only Cohen’s money.
But as the SAC case faded from the headlines, it continued to hang over Lee, who was still awaiting sentencing. Meanwhile, a federal appeals court in December 2014 threw out the convictions of two fund managers and said prosecutors needed stronger evidence in certain types of insider trading cases.
After that ruling, Lee decided to get a second opinion on his case. A minister who works with white-collar defendants introduced him to Morvillo, who represented one of the fund managers in the 2014 appeals court case.
But Lee’s new lawyer said there wasn’t an immediate way around the guilty plea. The problem, Morvillo said, was that Lee never got to see most of the government’s evidence against him because he pleaded guilty so quickly. It was only in May 2017, after the government provided documents so that Lee could prepare for sentencing, that they saw an instant message Lee sent Cohen the day of the Yahoo trade.
Contrary to the government’s theory, the message showed Lee had bought virtually all of the Yahoo shares before his call with Aggarwal, not after. In August 2017, more than four years after Lee pleaded guilty, Morvillo asked the court to allow Lee to withdraw his plea under the change of law or find him innocent based on this new evidence. Prosecutors conceded they did not get the instant message themselves until a month after Lee pleaded guilty.
U.S. District Judge Paul Gardephe tossed his plea based on the 2014 ruling, saying it was “insufficient” because Lee didn’t say that he knew how the corporate insiders benefited from their leaks, as the law now requires.
The case behind him, Lee says he has no plans to return to the financial industry. He spent much of the last several years at home as primary caregiver to his two daughters. He did some work for a relative’s startup and explored switching careers to medicine or dentistry. Lee now works as a consultant to a Chicago software company.
It was tough focusing on a career as the legal fight dragged on. “At times I felt very guilty because I just didn’t feel like I was mentally present,” he said. “I was in my head much of the time.”
But he doesn’t think he deserves anyone’s pity. “I have a family, fine friends. Everyone has a hard life. This is mine,” Lee said.
The U.S. Small Business Administration invites you to learn from small business owners and state professionals who have found success by exploring new pools of talent in their communities. These innovative businesses now include employees with disabilities, re-entry program participants and foster youth who are transitioning into independence by working in collaboration with the State of Connecticut and other partner agencies.
Who: Hiring agents of employees w/ disabilities, formerly incarcerated individuals, and foster youth who are transitioning into independence.
What: Workforce Inclusivity / Workforce Development Seminar, consider untapped sources of talent in your community!
When: Thursday, December 12, 2019 8:30am -12:00pm
Where: Fairfield University/ Dolan School of Business, Dolan Events Hall 1073 N Benson Rd. Fairfield, CT 06824
Register/Reasonable Accommodations: Please register to attend by December 9th, 2019 athttps://tinyurl.com/qodzq92. Reasonable accommodations for persons with disabilities will be made if requested at least 5 days prior to the event. Contact[email protected]or call (860) 240-4654.
Program and speaker list to be announced shortly.
Criminal Justice Advocates Jacqueline Polverari & Jeff Grant
Please join us on Friday, Feb. 21, 2020, 9 am ET, when Larry Levine, Talk Show Host & Criminal Justice Consultant, will be our guest on Criminal Justice Insider with Babz Rawls Ivy & Jeff Grant – The Voice of CT Criminal Justice. Live on WNHH 103.5 FM New Haven, rebroadcast at 5 pm. Live-streamed and podcast everywhere, see below. Sponsored by the Community Foundation for Greater New Haven – Now More Than Ever.
Larry Levine is former 10-year Federal Inmate who is now Director of Wall Street Prison Consultants and Coaching, and has been a contributor to CNN, Fox, MSNBC, the Washington Post, the Wall Street Journal, New York Times and several major news organizations providing expert information on Federal Prison and what people experience when incarcerated. MUCH MORE MORE ON LARRY LEVINE BELOW! PLEASE SCROLL DOWN!
Listen on SoundCloud:
Watch on YouTube:
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The Criminal Justice Insider Podcast with Babz Rawls Ivy and Jeff Grant is broadcast live at 9 am ET on the first and third Friday of each month Sept. through June, from the WNHH 103.5 FM studios in New Haven. It is rebroadcast on WNHH at 5 pm ET the same day. Podcast and Archive available all the time, everywhere.
Fri., Sept. 6, 2019: Khalil Cumberbatch*, Chief Strategist at New Yorkers United for Justice
Fri., Sept. 20, 2019: Aaron T. Kinzel*, Lecturer in Criminology and Criminal Justice at the University of Michigan-Dearborn
Fri., Oct. 4, 2019: Charlie Grady, Outreach Specialist for the FBI CT Community Outreach Program
Fri., Oct. 18, 2019: Michael Kimelman*, Former Hedge Funder and Author of Confessions of a Wall Street Insider: A Cautionary Tale of Rats, Feds, and Banksters
Fri., Nov. 1, 2019: Corey Brinson*, Former Attorney Convicted for a White Collar Crime who is running for Hartford City Council
Fri., Nov. 15, 2019: Cathryn Lavery, Ph.D., Asst. Chair & Graduate Coordinator for the Iona College Criminal Justice Department
Fri., Dec. 6, 2019: “Free Prison Phone Calls” Show, Guests CT Rep. Josh Elliott & Tiheba Bain*
Fri. Dec. 20, 2019: John Hamilton, CEO, Liberation Programs
Fri., Jan. 3, 2020: Reginald Dwayne Betts*, Lawyer, Poet, Lecturer on Mass Incarceration
Fri., Jan. 17, 2020: Serena Ligouri*, Executive Director, New Hour for Women & Children — L.I.
Fri., Feb. 7, 2020: David Garlock*, Program Director, New Person Ministries, Lancaster, PA
Fri,. Feb. 20, 2020: Larry Levine*, Talk Show Host & Criminal Justice Consultant
Fri,. Mar. 6, 2020: Hans Hallundbaek, Interfaith Prison Partnership
Fri., Mar. 20, 2020: Tiheba Bain*, Women’s Incarceration Advocate
Fri., Apr. 3, 2020: Rev. Dr. Harold Dean Trulear*, Director, Healing Communities Prison Ministry
Thurs., Apr. 16, 2020, 6:30 pm: Live Onstage at Iona College, New Rochelle, NY, Special Guests to be Announced
Fri., Apr. 17, 2020: Inaugural Inductees* of the CT Hall of Change & Charlie Grady, Founder
Fri., May 1, 2020: Eilene Zimmerman, Author of the New Book, “Smacked: A Story of White Collar Ambition, Addiction & Tragedy”
Fri., May 15, 2020: Fran Pastore, CEO, Women’s Business Development Council
Fri., June 5, 2020: Children of Incarcerated Parents Show, Guests Aileen Keays & Melissa Tanis
Sponsored by the Community Foundation for Greater New Haven – Now More Than Ever.
How does anyone become the premier expert in the world in their chosen field? To accomplish so rare a feat, it helps to have relentless energy, an extraordinary work ethic, no fear of failure, and at least a decade of hands-on experience. Each of these attributes clearly apply to Larry Jay Levine – the world’s premier expert in federal prison consultation.
And just how would one gain ‘at least a decade of hands-on experience’ in the field of federal prisons? Simple – by spending 10 years as an inmate in 11 of them – from high security on down to medium, low, and finally, minimum security. “It could have been worse,” says Levine. “My ex-wife wrote a letter to the court with information on crimes even the prosecutors didn’t know about. Luckily, the statute of limitations had already passed.”
The Incarceration, A New Beginning
As described on one of Levine’s several websites, he was a Private Investigator in Los Angeles, California before entering federal custody in 1998. He also reveals that, in truth, he was working as an ‘efficiency expert’ for the mob when arrested by an FBI and Secret Service-led Task Force on charges of narcotics trafficking, securities fraud, racketeering, obstruction of justice and possession of a machine gun.
“On my day of sentencing,” he recalls, “the judge slammed down his gavel, had me chained and shackled, and sentenced me to two, 10-year concurrent terms in federal prison.” His first 21 months were spent at the high-rise Federal Metropolitan Detention Center (MDC) in downtown Los Angeles, and over the next decade, he was shuttled off to 10 more federal correctional institutions of multiple custody & security levels in 5 different states.
Oftentimes, incarceration is the sad end of a person’s story. For Levine though, it was the fortuitous beginning of his newly inspired life. “While incarcerated,” he says, “I experienced firsthand the confusion and dangers first time offender’s face when entering federal custody. I was in the same position prison-bound people face today: scared, confused and overwhelmed by a criminal justice system I knew little about. I had no idea what to expect, no one to turn to, and was completely on my own.”
The Inmate, the Student
“Most inmates spend their time watching TV, playing cards, and jerking off,” he brashly says. In other words, they fritter their time away. “Instead, I spent my time in the prison law library.”
As Levine studied the law, he learned how the system works, or was supposed to work. Staying close to his cell, and the library, he minded his own business, was respectful and cordial to others, listened a lot and spoke as little as possible. “I didn’t get caught up in the drama,” he says. “Instead, I flew under the radar, and in ten years I had zero physical altercations. Zero. That’s unheard of, no one bothered with me.”
He observed prisoners being given the run-around and fed misinformation by predatory inmates and uncaring Federal Bureau of Prisons (BOP) staff members. “Like all federal bureaucracies,” he says, “the BOP operates with its own very complex set of rules called ‘Program Statements.’ The only problem is, prison staff routinely fail to follow them. The staff sets the tone in the prison, and when they make up their own rules at a whim, it creates additional chaos and confusion in the lives of inmates.”
As Levine traveled from one dysfunctional prison to another, he continued to read case studies and self-educate in criminal law. The more knowledge he gained, the more he learned how to fight back and win, always working within the rules.
“Absolutely, they will screw people in the prison system,” he says, “but not me. I knew the game better than they did. I put the staff on notice, this is between me and D.C., not you. Word soon got around, ‘do not engage this inmate, he knows policy better than you’.”Levine was never a troublemaker, which can only earn an inmate diminished privileges and even solitary confinement. Instead, he was a strategic thinker. Because of his knowledge of the system, he became a “management problem.” He would warn them to “follow your own policy,” while often informing staff members precisely what their policies were.
The Inmate, the Legal Adviser
With no formal background in the law, Levine began explaining criminal defense strategies to his fellow inmates and filing habeas corpus petitions on their behalf. As his successes built, so too did his confidence. He advised them on medical care and visitation rights, how to possibly reduce their federal sentences, request a transfer to a lower security center, secure a better job, and apply for extra halfway house time or a furlough.
Importantly, he also coached strategies for effective prisoner behavior. “The primary objective,” he told them, “is to think beyond your incarceration.” In the meantime, he taught methods for protecting themselves and surviving life behind bars. “To do that,” he’d say, “you need to know internal policies and how to effectively deal with BOP staff.”
In a March 2018 interview with Leslie Albrecht of the Wall Street Journal Market Watch, he described using the classic business school tool S.W.O.T. – an acronym for assessing your strengths, weaknesses, opportunities and threats, and then acting accordingly. He advised using this technique to “take control of what seems like uncontrollable situations in prison by using your brain.”
While at FCI La Tuna, Texas, Levine single-handedly filed a Class Action Habeas Corpus petition in El Paso Federal Court against the Department of Justice and Bureau of Prisons, claiming they and violated their own administrative policies by sending the transferred inmates to higher custody. Due to his actions, the DOJ was forced to act, and transferred hundreds of prisoners from Texas back to the West Coast to conform with the claims in his lawsuit.
Levine is convinced that the help he was giving his fellow inmates was a main factor in his regular movement from prison to prison. After all, the less educated the prisoner, the less threatened the staff. But it didn’t stop him and he selflessly provided advice and guidance, while at the same time honing his future craft, until his final movement – from the suffocating inside to the invigorating breath of freedom.
Freedom, the Invigorating Rebirth
In 2007, like a prize thoroughbred biting his bit in anticipation of the gate finally opening, Levine burst through and onto the legitimate business world’s fast track, assimilating into society like never before. “I was prepared,” he says, “and I hit the ground running.” He immediately founded American Prison Consultants and put his extensive legal training and experiences to good use by educating and defending the previously unrepresented.
“If you’re afraid, and the thought of going to prison scares the hell out of you, you’re not alone,” began his case to prospective clients. “Prisons are dangerous places,” he continued, “and having knowledge about prison policies, prison gangs, and the politics of prison life, are the keys to surviving successfully on the inside and coming home safely.”
He focused on the federal corrections system because that’s what he knew best. “There are 123 federal prisons across the U.S. and their policies are the same everywhere. The indicted get bond, they have money, they need my help.”His services centered around the trademarked ‘Fed Time 101’ prison survival educational courses (called modules), include advising on how to cope, survive and thrive in such unfamiliar territory. “Expect a total loss of privacy, including strip searches,” he tells his clients, advising them to be “quiet, respectful and observant.” He coaches them to “learn prison guard personality types” and how best to avoid getting “beaten, stabbed or raped.”
In addition to online courses, he offers various levels of customized services (e.g. Bronze, Silver, Gold, etc.), which may include offering insight and advice to his client’s attorney, lobbying a judge for a lighter sentence or a lower level security prison, and negotiating RDAP – entry into a drug or alcohol rehabilitation program which can lower a sentence by up to 12 months.
Levine understands first-hand the needs and concerns of the newly sentenced and quickly becomes a trusted voice to many.
“As usual, the big winners are the lawyers,” he says without hiding his sneer. “Most of them representing the accused couldn’t care less about their client. They work their 10 hours, get them pled out and behind bars as soon as possible.” As for the newly incarcerated, he says, “Many of them don’t even know their rights, and are completely unprepared for what happens next. I try to help them avoid that. They trust me, not their lawyers.”
White Collar Crime, the Growing Epidemic
In his early years as a prison consultant, Levine typically advised those accused of non-violent, narcotics-related transgressions. It was a noble cause and made for a good living. At the turn of the century, however, the business opportunity multiplied exponentially. It was the tail end of a twenty year financial market expansion. Lax regulations and greed-related excesses saw fraudulent behavior running rampant, first in the ‘dot.com’ bust of 2000-02, and again five years later when historic mortgage and securities fraud caused the near-collapse of the global financial system.
“It’s 2008 and I’m driving on the LA Freeway, stuck in traffic, as usual,” starts Levine. “I’m listening to the business news on the radio. Wall Street in chaos, the market melting down, mortgage falsifications and collusion everywhere. Then the Bernie Madoff news breaks. By the end of the day, I had created Wall Street Prison Consultants.”The Wall Street shenanigans had created a whole new wave of white collar clientele seeking out his services. With new prison consulting competitors regularly joining the fray, Levine was getting more than his share. None of the rivals could match his unique combination of inside experience, knowledge of the criminal justice and prison systems, and outsized personality.
Other than marketing through his various websites and other social media outlets, he doesn’t solicit business. “It’s all word of mouth,” he says. “These people and their lawyers know where to find me. And if they’re not interested, best of luck to them. My phone is ringing off the hook with or without them.”
The Expert Witness
Whenever a high profile (e.g. celebrity) criminal trial or prison sentence is in the headlines, which seems to be regularly, the networks have one ‘expert witness’ in the front of their rolodex – Larry Levine. He appears regularly on CNN, Fox News, MSNBC, ABC, CBS, Bloomberg, HLN, and other media outlets.
Recently, he built a mini-broadcast studio in the back of his office. “If they want me on CNN at 8 a.m. eastern,” he says, “it’s 5 a.m. in LA. It was an easy decision.”
Why is he so popular a guest? “I’m someone who really knows the inside,” he says. “I don’t play favorites. I tell it like it is.”
Anyone who’s checked out his past network appearances on YouTube will easily concur. While he is clearly an expert relating to criminal justice and prison system issues, he’s also a bold and highly-entertaining guest, often leaving the host nearly speechless. When the camera starts rolling, there’s no pretense or political correctness about Levine. The only role he’s playing is his true self. As evidence, here are a few snippets of his comments on varying cases:
“The higher profile a prisoner is, especially celebrities or rich guys, the more at risk they are once they go in. They’re going to need protection, so they should try to make friends with the prison guards, but without being obvious.”
“Famous inmates will get the most demeaning jobs, like cleaning the trash cans and pots and pans. Cleaning the prison shower is the worst. It’s disgusting. In prison, just like the real world, it’s not only what you know, it’s who you know. You have to know someone who can direct you to the best jobs. Pushing paper in an air-conditioned office – that’s the prize.”
His take on notable Ponzi scheme criminal, Bernie Madoff, as relayed on several networks in 2009, gives us an intriguing view on what his life is like “on the inside.” “Stealing money from a bank or insurance company, that’s considered okay. But stealing money from regular people, especially that amount of money – no way. The guy is an economic terrorist and that’s unacceptable. I wouldn’t help him, and I don’t help people like him. He’s going from the penthouse to the big house, and I say good riddance.”
“Madoff should be in a minimum security prison, essentially a camp. But the amount he stole takes him off the sentencing charts. He’ll end up in medium security, living in a cell, and there will be a long line of dangerous people who would love to spend a few minutes alone with him. Many of them have no ‘out date,’ meaning they’re never getting out anyway, so there’s no risk for them.”
“Child molesters, referred to as ‘chomos,’ are the lowest of the low in prison. The other inmates hate them and will be trying to take them out. Guys like Jerry Sandusky, or Jared Fogle, you know, the Subway guy, had better be kept in solitary confinement, or they’ll find them dead one day, and it won’t be pretty. It’s called ‘escape by death’.”
“Rats (i.e. informants) are also hated, and there was no bigger rat than Boston mob boss, Whitey Bulger. He was a psychopath, a ruthless killer, incarcerated in 2013. It took a few years, but when they finally got to him, they gouged his eyes out and ripped his tongue out. The message was clear to anyone else who’s considering becoming an informant – if you do, you won’t have eyes to see anything, and you won’t have the tongue to be a rat.”
“This Chris Watts guy who killed his own family – pregnant wife, two young daughters – he’s even worse off, a dead man walking. He probably won’t last a year, and it won’t matter where they try to hide him.”
Facing Adversity and Winning Big
Levine learned self-reliance early on, including joining the military directly out of high school. “I was on my own,” he recalls. “I didn’t rely on anyone. I’ve never asked for help and I never will.”
“My criminal indictment is the high point of my life,” he says. “I was going to die out there. When I was inside, I had stents put in, got my head straight, and turned my life into a big ‘f…ing’ positive. I’m 57 years old – I have my whole life ahead of me. Now I’m helping people. I get paid well to be an asshole.”
Some family members are proud of what he’s accomplished, he says, while others are not. A few are even jealous, he says, and he has a theory as to why. “My success makes some people look at their own pitiful lives – their stagnant, unaccomplished lives – and they blame everyone but themselves, including the ex-con who’s doing great.”
Levine has advice for the nay-sayers: “Stop being so stupid. Stop with the whining and blaming. Instead, take a look directly in your mirror. There’s your problem. Use your brain, get to work, go out and change your life. I have no tolerance for stupidity.”
The Full Blown Entrepreneur
This fearless guy has been transforming rapidly into a full-blown entrepreneur. To his thriving consultancy business and expert witness role, you can add hosting a weekly radio program called ‘Street Justice,’ accessed on several internet radio sites. He also owns Moorpark Survival, a retail survival store, and a telephone company which offers inmates in some federal detention centers discounted telephone calls.
To the question, ‘Why the survival store?’ he retorts, “Have you noticed how dangerous it is out there lately?” Mea culpa. “Besides,” he explains, “whether you’re on the inside or out here, the theme’s the same, it’s about survival.”
As for the telephone company, it’s another way he’s helping inmates. “Every inmate gets a certain amount of phone minutes per month,” he says, “and they give some high profile guys, like Paul Manafort, unlimited calls. Why would they do that,” he queries, before quickly answering. “Because they charge a ridiculous fee per minute and make a fortune.” His company offers the same service to inmates for less than half the BOP rates.
In all, Levine has not only survived his time inside, the experience sparked an entrepreneurial drive that is growing hotter by the year. In a ‘bigger picture’ sense, his accomplishments needs to be examined more deeply to ascertain if they can be duplicated on a mass scale.
The Bigger ‘Big House’ Picture
Because the rate of recidivism in the U.S. (i.e. ex-cons who go back to a life of crime and incarceration) is said to be a staggering 76%, we think the benefits of Levine’s brand of prison consultancy should be studied by the BOP for a broader purpose. The simple question is, can a more effective rehabilitative process be developed to meaningfully improve this outcome?
By educating inmates to protect themselves and use their brains to make their time in detention more productive, could the general prison population be offered more hope – a brighter vision of what their new life on the outside could someday look like? Could they be taught new skills and a sense of purpose, something meaningful to strive for day-to-day?
If the answer to these questions is ‘yes,’ or even ‘maybe,’ then such a program should be offered to any inmate with an interest, including those unable to afford services such as Levine offers. By doing so, perhaps the horrendous rate of recidivism would begin to plummet in the same manner that Levine’s life has ascended. How brilliant and valuable would that be?
Recently, the ‘First Step Act’ was signed into law in bipartisan fashion in our tragically divided Congress. It’s been called ‘a major win in the effort to improve conditions in prisons and end mass incarceration.’Is this the criminal justice reform bill we’ve been waiting for, one that will begin to address the recidivism crisis and other system ailments? We asked the expert, and here is Levine’s considered reaction.
“For starters,” he said, “the bill is a ‘hand job’.” We asked him to please stop holding back and tell us how he really feels, which he did as follows:
“I get calls about the bill every day and here’s what I’m telling people. It has just been signed into law. Now, it must be codified and published in the Code of Federal Regulations (CFR). Then, they have to create a ‘Program Statement,’ how the new law will apply to inmates.”
Levine made it crystal clear that he is skeptical and reserving judgment until he sees what the law really says, and especially, what it means in the daily lives of inmates. More to come on this in the years ahead, we’re certain.
The Entrepreneur’s Bigger Picture
In the meantime, the ‘bigger picture’ for Levine includes some leisure time away from his various businesses, believe it or not. We asked him what he does to relax, to get away from the fray. His initial response was “I don’t even know if I can do that.”
But with further prompting, he acknowledged that he enjoys time at the racetrack, watching movies (90 just last year), and he visits Vegas on occasion, for both business and pleasure.
He doesn’t travel often though, saying, “I don’t like to fly.” Afraid of flying, we asked with surprise. “Oh no, I’m not afraid,” he shot back. “I’m never afraid of anything. But I do get concerned.” Concerned about what, we asked. “For the safety of the others on the plane, especially the women and kids,” he responded. In what way, we asked. “I’m concerned that just by being on board, I’ll bring the plane down.” We made a note never to fly with him.
Speaking of kids, when he’s not working, his true love is spending time with his family – his wife of three years, his three kids and his three grandkids. This sounded so normal, so heartwarming, we thought it was a good place to close the article.
We expect to see and hear a lot more from this charismatic prison consultant and entrepreneur in the years to come, and believe me, we will be watching. Especially as relates to the critical issue of prison reform and the assimilation of ex-convicts back into productive roles in society.
Progressive Prison Ministries, Inc. is the world’s first ministry supporting the white collar criminal justice/economy exiled community. Progressive Prison Ministries, Inc. is nonsectarian, serving those of all faiths, or no faith whatsoever. To date we have helped over three hundred (300) individuals, and their families, to accept responsibility for their actions and to acknowledge the pain they have caused to others. In accordance with our commitment to restorative justice, we counsel our members to make amends as a first step in changing their lives and moving towards a new spiritual way of living centered on hope, care, compassion, tolerance, empathy and service to others.
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Please make your check payable to, “Progressive Prison Ministries, Inc.,” a 501(c)(3) nonprofit, and send to our mailing address: P.O. Box 1, Woodbury, CT 06798. All donations are used exclusively to support our program. As a 501(c)(3) nonprofit, all donations are tax deductible to the extent permitted by law. Thank you & Happy Holidays!
On Thurs., Nov. 14th, Jacqueline Polverari of Evolution Reentry Services & Rev. Jeff Grant of Progressive Prison Ministries were invited to speak to students today at Albertus Magnus College, New Haven, CT. Meeting young people dedicating themselves to careers in enlightened criminal justice – a wonderful afternoon.
On November 21st, my wife and partner-in-ministry Lynn Springer and I spoke at the GED graduation ceremony at Danbury Federal Correctional Institution. We then held a spirituality workshop at which Lynn lead the men in a guided meditation and taught them breathing techniques.
We are grateful to the good men and staff of FCI Danbury for this amazing, cathartic, inspirational, transformational, holy day. One of the greatest days of our lives.
We feel blessed and honored to have had this opportunity to be of service. This event was not open to the public. 🙏🙏🙏 – Jeff
PS if you are in the Litchfield County, CT area, Lynn teaches yoga classes on Sundays, Tuesdays and Thursdays, and gives private instruction. Please contact me for information. Link to contact page here. Namaste!
A Testimonial from Richard Lee: “Thank you Jeff for your counsel throughout these past several years. My family and I are grateful to you and Lynn, and are glad to be a part of the important work you are championing in the criminal justice community.” – Richard Lee, Illinois. Link to additional Testimonials here.
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Ex-SAC Trader Lee Wins Insider-Case Dismissal After Plea
Reprinted from Bloomberg, Nov. 7, 2019, 12:02 PM
Richard S. Lee had agreed to cooperate with prosecutors
A new trial was scheduled for December; now the case is over
A former trader at SAC Capital Advisors LP who admitted to making illegal insider trades, cooperated with the government, and later sought to withdraw his guilty plea has prevailed in his years-long fight to clear his name.
Federal prosecutors on Thursday dismissed their case against Richard S. Lee, who was the center of a prosecution the U.S. brought against the hedge fund in 2013, according to court records.
Lee pleaded guilty in July 2013, days before then-U.S. Attorney Preet Bharara unveiled unveiled a sweeping indictment claiming SAC orchestrated a massive insider-trading scheme. He was one of at least eight SAC fund managers or analysts who were charged in the government’s attack on illicit trading. SAC, which changed its name to Point72 Asset Management LP, eventually pleaded guilty and agreed to pay a record $1.8 billion penalty.
But after a series of court rulings changed the landscape of insider-trading law, Lee challenged his plea as insufficient. In June, U.S. District Judge Paul Gardephe in Manhattan granted Lee’s request to withdraw the plea but refused to declare him “innocent.” Prosecutors had said they would retry Lee on Dec. 9, but now have dismissed the case.
“Mr. Lee and his family recognize how rare it is for the U.S. Attorney’s office to dismiss a case after a criminal charge is filed,” his lawyer, Gregory Morvillo, said in a statement. ”We obviously agree that dismissing the case is the right result in this situation. Mr. Lee is grateful for the support from his family and friends throughout this long journey.”
A spokesman for U.S. Attorney Geoffrey Berman in Manhattan didn’t have an immediate comment. In a court filing, prosecutors said they’re dropping the case because a decade has passed since the trades at issue and there would be “difficulty in securing evidence” to prove such an old case.
SAC Portfolio
Lee, who managed a $1.25 billion portfolio at SAC, pleaded guilty to conspiracy and securities fraud, admitting he got advance information from a research analyst about Yahoo Inc. and 3Com Corp. in 2009. The Securities and Exchange Commission said in a related lawsuit that Lee generated more than $1.5 million in profits.
In seeking to set aside the guilty plea, Morvillo argued that records showed he had made his trades before receiving information from the analyst. Morvillo also said the case no longer holds up under an appeals court ruling requiring the recipient of a tip to know the tipper acted for a personal benefit in disclosing the information.
On Wednesday, Lee settled the SEC’s suit and agreed to pay more than $130,000 in penalties. Lee, who once worked as a portfolio manager at Citadel, neither admitted nor denied wrongdoing.
Law360 (November 7, 2019, 12:41 PM EST) — Manhattan federal prosecutors have dropped insider trading charges against a former portfolio manager at SAC Capital who was headed to trial after getting his 2013 guilty plea vacated for falling short of the legal bar set out in the Second Circuit’s Newman decision.
In a request filed Thursday, prosecutors dropped their case against Richard Lee, citing the fact that the evidence is now 10 years old and that he has paid penalties to the U.S. Securities and Exchange Commission.
“The government has determined that it is in the public interest to dismiss the charges pending against Lee,” prosecutors wrote in the filing.
One of the asset managers swept up in the federal investigation of insider trading at hedge funds, Lee was accused of multiple insider trades, including purchases of Yahoo Inc. stock he made after a call with an analyst, Sandeep Aggarwal, who had learned from a Microsoft insider about an impending collaboration between the two tech companies.
Lee had initially pled guilty to one count of conspiracy and one count of fraud and cooperated with the government, but sought to withdraw his plea in 2017. He argued that the facts he admitted to in his plea were not enough to support a conviction under the Second Circuit’s 2014 decision in U.S. v. Newman .
In that decision, the appeals court said that to prosecute tippees under the Securities Exchange Act, the government must show that they knew an insider was receiving a personal benefit for leaking stock tips.
In June, U.S. District Judge Paul G. Gardephe found that Lee’s plea allocution didn’t tick that box and as such had to be vacated, despite the difficulties prosecutors would face trying the case now. Lee had been scheduled to go to trial on Dec. 9.
Lee’s attorney, Gregory Morvillo, said in a statement that while its rare for prosecutors to drop a case, it was “the right result” in this scenario.
“Mr. Lee is grateful for the support from his family and friends throughout this long journey, and he looks forward to closing this chapter of his life, and beginning the next one,” Morvillo said.
The government is represented by Drew Skinner and Daniel Tracer of the U.S. Attorney’s Office for the Southern District of New York.
Lee is represented by Gregory Morvillo of Orrick Herrington & Sutcliffe LLP.
The case is U.S. v. Lee, case number 1:13-cr-00539, in U.S. District Court for the Southern District of New York.
After an addiction to prescription opioids and serving almost fourteen months in a Federal prison (2006 – 07) for a white-collar crime (fraudulent application for SBA disaster loan) he committed in 2001 when he was lawyer, Jeff started his own reentry – earning a Master of Divinity from Union Theological Seminary in the City of New York, majoring in Social Ethics. After graduating from divinity school, Jeff was called to serve at an inner city church in Bridgeport, CT as Associate Minister and Director of Prison Ministries. He then co-founded Progressive Prison Ministries, Inc. (Greenwich, CT), the world’s first ministry serving the white collar justice community.
On May 5, 2021, Jeff’s law license was reinstated by the Appellate Division of the Supreme Court of the State of New York.
Now again in private practice, Jeff is an attorney and counselor-at-law providing private general counsel, legal crisis management, and dispute strategy and management services to individuals and families, real estate organizations, family-owned and closely-held businesses, the white collar justice community, and special situation and pro bono clients. He is a nationally recognized expert in SBA, PPP, EIDL loan fraud.
For over 20 years Jeff served as managing attorney of a 20+ employee law firm headquartered in New York City, and then Westchester County, NY. Among other practice areas, the firm engaged in representation of family-owned/closely held businesses and their owners, business and real estate transactions, trusts and estates, and litigation. Jeff also served as outside General Counsel to large family-owned real estate equities, management and brokerage organizations, in which role he retained, coordinated and oversaw the work of many specialty law firms, including white collar defense firms.
Link to Jeff’s full bio and links to articles, video, podcasts & radio here.
DESIGNATIONS/AWARDS:
Twice Selected as a Nantucket Project Scholar
JustLeadershipUSA Fifteen Inaugural National Leaders in Criminal Justice
Keepers of the Commons Fellow
Keepers of the Commons Senior Fellow
Elizabeth Bush Award for Volunteerism
Three Time Bridgeport Reentry Collaborative Advocate of the Year Award
Four Time Bridgeport Reentry Collaborative Professional of the Year
Connecticut Coalition Against Domestic Violence Award
Connecticut NAACP Award
Selected as a Collegeville Institute Writing Fellow
CAREER:
Professional Speaker 20+ years
Practicing Attorney 20 years
Minister/Prison Minister 10 years
Reentry & Recovery Professional – Clean & Sober 17+ years
DEGREES:
Juris Doctorate, New York Law School
Master of Divinity, Union Theological Seminary
ASSOCIATIONS:
American Bar Association
New York State Bar Association
New York City Bar Association
National Association of Criminal Defense Counsel
National Speakers Association, Professional Member
Reuters: Jeff Grant ‘Let Go of the Outcome’: How this Felon Beat Addiction and Won Back his Law License, by Jenna Greene, May 2021: https://www.reuters.com/business/legal/i-let-go-outcome-how-this-felon-beat-addiction-won-back-his-law-license-2021-05-21/
Entrepreneur’s #4 Most Viewed Article of 2020: I Went to Prison for S.B.A. Loan Fraud: 7 Things to Know When Taking COVID-19 Relief Money: by Jeff Grant, April 2020: https://www.entrepreneur.com/article/350337
The Philadelphia Inquirer: Steal Money from the Feds? First, Meet Jeff Grant, an Ex-Con who Committed Loan Fraud, by Erin Arvedlund, Oct. 2020: https://www.inquirer.com/business/sba-loan-fraud-jeff-grant-white-collar-week-crime-bill-baroni-20201018.html
Greenwich Magazine: The Redemption of Jeff Grant, by Tim Dumas, March 2018: https://greenwichmag.com/features/the-redemption-of-jeff-grant
Forbes: As Law Enforcement Pursues SBA/PPP Loan Fraud, A Story Of Redemption, by Kelly Phillips Erb, July 2020: https://www.forbes.com/sites/kellyphillipserb/2020/07/14/as-law-enforcement-pursues-sba-loan-fraud-jeff-grant-talks-redemption/#7a4f70cc4483
Recent Podcasts/Radio:
The Confessional with Nadia Bolz-Weber, Podcast, May 2021: https://nadiabolzweber.com/308-jeff-grant/
Greater Good Radio with Bob Kosch, WOR 710 AM NYC, May 2021: https://www.iheart.com/podcast/1248-greater-good-radio-with-b-81131426
Selected Video:
The Rich Roll Podcast: The Awakening of Jeff Grant: From Addiction & Incarceration To Prison Ministry, 2019: https://www.richroll.com/podcast/jeff-grant-440/
Founders Focus Podcast with Scott Case, 2021, Interview, https://youtu.be/y5icqQcMtPc?list=PLbNxOsmSNw3x3jR9P9fJfHrYkuQGXzJl9
White Collar Support Group, Meets Mondays 7 pm ET, 4 pm PT: We held our 250th online support group meeting in March 2021. We have had over 320 participants, and average about 25 attendees at each meeting: https://prisonist.org/white-collar-support-group/
Sample Episodes of White Collar Week Podcast (video & audio):
White Collar Week Podcast, Ep. 01: An Evening with Our White Collar Support Group. 16 of our support group members tell their personal stories: https://prisonist.org/white-collar-week-with-jeff-grant-podcast-episode-01-16-free-from-prison-an-evening-with-our-white-collar-support-group/
White Collar Week Podcast, Ep. 06: Madoff Talks, with guest Jim Campbell, author of the book coming out April 2021, “Madoff Talks, Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History.”: https://prisonist.org/white-collar-week-with-jeff-grant-podcast-ep-06-madoff-talks-with-guest-jim-campbell/
White Collar Week Podcast, Ep. 21, All Things SBA, PPP & EIDL, Guest: Hannah Smolinski, CPA: https://prisonist.org/white-collar-week-with-jeff-grant-all-things-sba-ppp-eidl-with-guest-hannah-smolinski-cpa-virtual-cfo-podcast-ep-21/
Gary U.S. Bonds had been a big deal in the early sixties. Thanks to a new tour produced by Bruce Springsteen and a hit called Dedication, he was enjoying a major comeback when I saw his name up on the marquee of The Paradise. Some friends and I had just finished a basketball game on the Mount. As usual, I’d played center like an animal, high on an assortment of pills I’d found in the glove compartment of Jeffri Schwartz’s 1969 Ford Mustang that we’d driven up to Boston to celebrate Richie Gold’s birthday. It had been a rough, physical game and my face and sweatshirt were a holy mess of dirt and bloodstains. I felt like a million bucks. A kind of raw, visceral power coursed through my veins as the Mustang coasted down the hill towards Commonwealth Avenue. We had just turned the corner when I spotted the marquee.
I was a big Springsteen fan. Big. I’d seen him play when he wasn’t so well known. Darlene Blatt, a girl I’d met at college orientation, had dated Bruce’s first drummer, Vinny “Mad Dog” Lopez. Or maybe a friend of hers had dated him; it’s hard to remember it all now. She told us all about Springsteen and his band when I met her up at Brockport those first few days of orientation. During the summer of ’74, when Bruce’s second album came out, The Wild, The Innocent & the E Street Shuffle, I picked Arlene up from her folks’ apartment in Brooklyn and a bunch of us went down to Red Bank, New Jersey to see Bruce and the band play. Thirty minutes into the three-hour show, we were all hooked.
Red Bank was Springsteen country; he and the band were all from the Asbury Park area, just a few miles up and down the Garden State Parkway. So Bruce knew a lot of people in the audience. He called out to them from the stage and they called out back to him. It was like a revival meeting, or maybe an all-night fraternity kegger. Bruce and the band played so long that at one point he walked up the aisle of the auditorium, opened the back door out to the sidewalk and personally assured the people waiting for the second show that he’d give them a full set too. I heard that the second show lasted until after 3 a.m. that night. But there are so many stories now about Bruce that they have become legend. I knew that Bruce was behind Gary U.S. Bond’s comeback. And on this particular afternoon, I was just high, or stupid, enough to decide that we had to add Gary’s show to our collection of Springsteen stories.
We pulled the car over and piled out looking pretty ragged and smelling awfully rancid. Looking just perfect for a sketch. I went up to the ticket window and introduced myself as Freddy Bastiglione, the son of Phil Bastiglione, owner of Concerts West in New York City.
Now I am not, nor have I ever been, Freddy Bastiglione. But Freddy did go to my high school. And his family did live in Merrick, the Long Island neighborhood in which I was raised. So I did know at least that Freddy’s dad owned one of the largest, if not the largest, concert promotion companies in New York. I knew that my grungy get-up was more than perfect to help me pass off as Freddy Bastiglione. Who else but the son of a huge rock promoter would show up at a rock concert venue in sweaty gym clothes? Demanding, no less, tickets to that night’s Gary U.S. Bonds show? It seemed insane, and perfect. With my stock brand of over-in-bred Long Island charisma (one part overly gregarious and one part dismissively arrogant) I told the ticket clerk that there should be four complimentary passes waiting for me. Long Islanders are not short on balls.
“I’m on the EMI/Thorn list,” I stated.
Direct. To the point. I was a Springsteen fan; I knew his label. The ticket clerk looked the guest list over. He turned back to me and apologized. I wasn’t on the list. I steeled myself and asked him if he knew who my father was.
“I’m meeting important industry people tonight,” I insisted. “If I’m embarrassed, Gary U.S. Bonds will never play New York again.”
The clerk gave me the look. I didn’t blink. He ran to get Gary’s road manager.
About five minutes later, the front door of the Paradise opened. Gary’s road manager Anne greeted us with a smile and a handshake. There was no turning back then. I explained how my friends, my basketball and I were standing there without our tickets for that night’s show. And how very disappointed I was. And how when I was disappointed, I explained, my father, Phil Bastiglione, was disappointed too. Anne apologized and put us down for a table up front.
“Why don’t you came back an hour before the show,” she offered, “and you can have dinner with the band?”
Wow. We climbed back into the Mustang and headed over to Richie’s apartment on Beacon Street to shower, change, and get started. We weren’t sure if we were in for the night of our lives or if we were going to end up in jail. Or both.
We arrived at the Paradise at about seven, ready to party. I knocked on the front door and Anne led us immediately to a room in the back. There was a huge spread of food, liquor and beer. On the far side of the room Gary and the band were snorting lines of coke off a glass cocktail table. He motioned us over, shook our hands, and offered us some. We spent the next hour talking, laughing, and partying with the band. At about five minutes to eight, Anne came out and showed us to our table. We were seated right in front, maybe five feet from the stage. As Gary and the band played their set, a spray of Gary’s sweat flew into our faces. We were so high we could barely make out the words.
Somehow I got inspired and scrawled a note on a piece of paper. In between songs, I stood up and handed it up to Gary up on stage. He looked kind of startled as if that sort of thing wasn’t supposed to happen. As he read the note he laughed and then announced to the crowd that it had been twenty years, or more, since he had taken any dedications during a show. But, on this special night, in honor of his good friend Richie Gold, the band was going to sing Happy Birthday. And then they did. Gary U.S. Bonds and his band sang Happy Birthday to my friend, Richie Gold. And then they went into their Number One Hit, Dedication.
“Larry” – Husband, father, and formerly incarcerated.
Chion Wolf / Connecticut Public Radio
View Slideshow3 of 4
Jeffrey Grant – former lawyer, minister, co-founder prisonist.org, co-host of Criminal Justice Insider podcast on WNHH FM in New Haven, and formerly incarcerated.
Chion Wolf / Connecticut Public Radio
View Slideshow4 of 4
Da’ee McKnight – Program Manager, Young Fathers ReEntry Project, for Family ReEntry, and formerly incarcerated.
Chion Wolf / Connecticut Public Radio
Connecticut’s “Second Chance Society” has reduced the number of people going into prison and better prepared offenders for a meaningful life when they get out.
We’ve closed prisons, repealed the death penalty, and raised the age at which young people can be tried as adults. We’ve added reentry programs modeled loosely on the German prison system, where incarcerated men and women raise and cook their own food, wear their own clothes, and participate in longterm therapy.
Yet, too many men and women don’t benefit from the changes: discrimination, inconsistent funding, and ineligibility from programs make it harder for some to succeed after prison.
Today, we talk about the challenges that remain with those who know best – the formerly incarcerated.
GUESTS:
“Larry” – Husband, father, and formerly incarcerated
Da’ee McKnight – Program Manager, Young Fathers ReEntry Project, for Family ReEntry, and formerly incarcerated
Jeffrey Grant – former lawyer, minister, co-founder prisonist.org, co-host of Criminal Justice Insider podcast on WNHH FM in New Haven, and formerly incarcerated
