Federal prisoner accounts have grown by $50 million this year

Government-run deposit accounts for federal prisoners swelled by more than $50 million this year, as critics say a recent murder-for-hire case hatched behind bars highlights the danger posed by the Federal Bureau of Prisons’ lax oversight of the rapidly growing program.

In February, the total amount of money in inmate accounts was more than $86 million. By May, that figure had topped $100 million, and this month, it surpassed $140 million, according to two people familiar with the figures, who spoke on the condition of anonymity to discuss nonpublic details of the program.

That increase was driven largely by government stimulus checks issued during the coronavirus pandemic. Critics say the extra money in the system underscores a failure to ensure that inmates pay restitution to their victims and allows inmates to use the accounts to finance other crimes.

Federal prisoner accounts hold more than $100 million

The Washington Post reported last month that prison officials have allowed Larry Nassar, the former USA Gymnastics doctor accused of sexually abusing hundreds of girls and women, to avoid paying financial penalties that are part of his sentence — even as he spent more than $10,000 from his prison account, according to a court filing.

Nassar owes tens of thousands of dollars to his victims, and under a Bureau of Prisons-run installment plan has paid only about $300, according to court filings. Nassar also received $2,000 in stimulus payments from the government this year. Federal prosecutors took the unusual step last month of filing court papers seeking to force the Bureau of Prisons to turn over more than $2,000 in Nassar’s prison account.

Nassar has not yet responded to the filing.

Nassar has spent thousands in prison while paying his victims little

In South Carolina, inmate and convicted drug dealer Richard Gilbert was sentenced last week to 21 more years in prison for trying to pay someone to murder a key witness in the case against him — and officials alleged that Gilbert also discussed killing the assistant U.S. attorney and an agent of the Bureau of Alcohol, Tobacco, Firearms and Explosives pursuing the case once the witness was dead.

Gilbert, according to court papers, sent a check for $2,000 from his prison account as a down payment to the person he thought would kill the witness. That purported hit man turned out to be an undercover officer on an FBI task force, who had been tipped off to the plot by one of Gilbert’s fellow inmates. In the memo section of the check, Gilbert wrote that the money was for an “investment firm.”

A Bureau of Prisons spokesman said the agency “takes our responsibility to monitor inmate funds very seriously and we are currently taking steps to strengthen monitoring and reporting related to inmate accounts.” A lawyer for Gilbert did not respond to a request for comment, but court papers filed on his behalf as part of his plea of guilty to the plot to kill the witness insist he did not plan to kill the federal prosecutor or the ATF agent.

Jason Wojdylo, a retired official with the U.S. Marshals Service who spent years unsuccessfully trying to persuade the Bureau of Prisons to change its policies, said the Gilbert case shows the risks the Bureau of Prisons banking system poses to the safety of other law enforcement agencies.

It’s bad enough, Wojdylo argued, that the Bureau of Prisons “provides inmates a shelter for their money” that shortchanges crime victims. “BOP’s failures also threaten the safety of prosecutors, law enforcement, witnesses, and for that matter BOP correctional staff,” he said. “We’ve long known inmates also use their money for illicit activity. Here it has become a matter of life or death. Next time, law enforcement may not be lucky enough to intervene and disrupt a plot.”

Federal inmate accounts are not subject to the same criminal and regulatory scrutiny as bank accounts of non-incarcerated people. Although the Bureau of Prisons operates accounts for inmates and issues checks and money transfers from those accounts on their behalf, the agency does not consider itself a financial institution. Nor does it run bank transactions through a Treasury Department screening program meant to flag outstanding debts, officials said.

The agency has said that it cannot make inmates comply with state court orders for payments such as child support or alimony but that it incentivizes them to do so through regular payment plans. Inmates who refuse to participate in such plans may lose privileges, officials said.

There is no limit on how much money prisoners can keep in their accounts, and more than 20 federal inmates have balances of more than $100,000 each, according to one of the people familiar with the account figures. Some lawmakers have demanded answers from the Bureau of Prisons about the program, but the agency has not provided any.

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