During Justice Department discussions last month, senior prison officials argued that the agency should not dramatically increase the amount of prisoner money given to victims, according to people familiar with the internal deliberations. who spoke on condition of anonymity to describe the conversations. Any large increase, officials say, would cut into a vital source of revenue at a time when the agency is already understaffed.
Jack Donson, a former Bureau of Prisons case manager coordinator who now consults on the federal prison system, said the issue highlights a “dysfunctional” culture at the prison bureau, with officials focused on preservation of the flow of money through the accounts of the police station – known within the agency as the ‘trust fund’.
“In meetings, staff members often referred to the trust fund as a ‘slush fund,’ so I was always wary of it,” Donson said.
Bureau of Prisons inmate accounts hold more than $100 million, with few victim payments
Over the past year, the Washington Post revealed that some high-profile inmates, including Boston Marathon suicide bomber Dzhokhar Tsarnaev and former US gym doctor Larry Nassar, had large prison account balances but no paid very little of what they owed to their victims. Deputy Attorney General Lisa O. Monaco issued a directive to study the matter and recommend changes to the program.
How, or if, the Justice Department decides to make new rules could affect another high-profile inmate: R&B singer R. Kelly, who was sentenced in June to 30 years in prison for sex trafficking. Kelly has about $28,000 to his jail account, according to multiple people familiar with the matter, and owes $140,000 in court-ordered fines, including a $40,000 fine for a fund for victims of sex trafficking, records show judicial. Prosecutors have yet to ask a judge to compel the Bureau of Prisons to hand over the money.
The inmate funds controversy centers on two separate but related funds. The first are deposit accounts, in which the country’s roughly 140,000 federal inmates can keep an unlimited amount of money. These accounts are not subject to most regulations and scrutiny of regular bank accounts, as the agency does not consider itself a bank. The total amount of money in deposit accounts has risen from $86 million to more than $140 million in 2021, largely because prisoners received coronavirus stimulus payments, people familiar with said folder.
The second pool of money is the commissioner’s accounts, or trust funds – a way for inmates to buy things, like phone or email access, sodas and candy, with the money from their trust funds.
The Bureau of Prisons, according to documents provided in response to a public records request, charges interest on the trust fund, although the amount can vary wildly; last year, the agency earned just $29,526, but two years earlier, the fund generated over $1.3 million in interest.
The trust fund also operates as a kind of business, using the large markups it charges inmates on purchases to pay agency staff. Last year, the Trust Fund provided $82 million to finance 652 Bureau of Prisons positions — $49.5 million in salaries and $32.5 million in benefits, according to agency records.
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In a written statement, the agency drew a sharp line between the two pools of money, insisting that the inmate trust fund does not profit from inmate money, while failing to acknowledge that the Trust fund money generates tens of millions of dollars a year that are used for salaries and benefits.
The agency said that “all inmate deposits are held in trust by the Bureau of Prisons in non-interest-bearing U.S. Treasury accounts and remain there unless the funds are withdrawn by the inmate or the inmate be released. Since the funds are held in trust, the BOP does not invest in or derive any type of income from the funds in these accounts.
Separately, through the public records request, the agency acknowledged that the commissioner’s money — the trust fund — generates interest for the Bureau of Prisons.
For years, the Bureau of Prisons has argued that whatever balance inmates may have in their accounts, they should only be required to pay $25 every three months – just over $8 a month – any restitution to victims ordered by the court.
In early July, as the Monaco office reviewed the amount to be paid for court decisions, senior Bureau of Prisons officials claimed that no more than 25% of an inmate’s jail account should be taken, people familiar with the conversations said. Officials noted that reducing the amount of money in the accounts would also reduce the amount in the trust fund, thereby reducing the agency’s revenue, the people said.
Under the 25% limit, Kelly, for example, would need to withdraw about $7,000 from his jail account, keeping about $21,000.
The agency’s proposal has met with resistance from other parts of the Justice Department, according to people familiar with the debate, which is ongoing. The Monaco office is considering an option in which the maximum amount taken from a prisoner to pay for court orders would be between 25 and 75%, depending on the overall account balance.
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Prosecutors and other law enforcement officials have pushed to correct what they see as a glaring and unfair contradiction in the current system: the Bureau of Prisons zealously guards the money of convicted felons who others parts of the government ordered to make payments to their victims.
Prisoners are only allowed to spend around $400 a month through the commissary system, but some keep several thousand in their accounts. More than 20 inmates had prison account balances of more than $100,000 each, The Post reported last year. It can be difficult for convicts to get a traditional bank account.
Critics of the Bureau of Prisons system say the agency’s accounts often protect money that should go to court-ordered restitution or child support. Under current rules, prosecutors must ask a federal judge to order the agency to hand over large sums.
Jason Wojdylo, a former U.S. Marshals official, tried unsuccessfully for years to convince the Bureau of Prisons to change its practices, which he says are failing victims of crime. Wojdylo filed the request for public records showing how much money and how many positions the office is paying with revenue generated from inmate money.
“It’s a flagrant conflict for BOP to put its own interests ahead of those of victims and children,” Wojdylo said in an interview.
Lawmakers also began to pressure the Justice Department to change the system.
“BOP has a responsibility to ensure that inmates comply with their judgments owed … restitution to victims, child support and others,” Sen. Charles E. Grassley (R-Iowa) said this week after being briefed on the findings. of the Post. . “These important judgments should not be ignored while BOP takes a cut of inmates who buy snacks from the commissioner.”
In the Tsarnaev and Nassar cases, prosecutors eventually filed court documents seeking a judge’s order to force the agency to hand over funds to cover larger payments. Before doing so, Nassar had spent more than $10,000 from his prison account on other purchases, according to a court filing, while paying victims about $100 a year. He had been ordered to pay tens of thousands of dollars in restitution.
By the time prosecutors asked a judge to seize Tsarnaev’s prison funds in January, he had received $21,000 in deposits, including $1,400 in covid relief funds from the federal government. He had spent all but about $4,000 of the money on purchases from the trust fund.
In another past case, a Tennessee bank robber wrote to a federal judge saying that Bureau of Prisons officials were preventing him from paying what he owed his victims. He asked the judge to intercede and force the agency to give them his money.
Federal inmate accounts are not subject to the same criminal and regulatory scrutiny as bank accounts of non-incarcerated individuals. Although the Bureau of Prisons maintains accounts for inmates and issues checks and money transfers from these accounts on their behalf, the agency does not consider itself a financial institution. It also does not handle banking transactions through a Treasury Department screening program meant to flag unpaid debts, officials said.
The agency said it cannot compel inmates to comply with state court orders regarding payments such as child support or alimony, but does encourage them to do so through through regular payment plans.