Ex-CEOs doing time in prison feel the sting of tougher law
By Greg Burns
Chicago Tribune
AYER, Mass. — Sitting erect in a green plastic chair, tan jumpsuit neatly buttoned and pressed, wire-rim glasses lending a professional air, David Heath Swanson looked every inch the chief executive.
Even here, in federal prison.
After a long career at the top of Midwest agribusiness, Swanson at age 61 is just beginning a 15-year sentence for corporate fraud.
His move from boardroom to the big house coincides with a federal crackdown on white-collar crime. Under criticism for failing to pursue the corporate elite, the Justice Department is finally starting to expand its caseload. But the biggest changes, as Swanson can attest, involve penalties.
Even before the Sarbanes-Oxley Act of 2002 dramatically increased the jail time for standard white-collar offenses such as mail and wire fraud, prosecutors were bringing more extensive charges, toughening up on plea bargains and protesting when nonviolent offenders were sent directly to halfway houses.
"The prospect of prison, more than any other sanction, is feared by white-collar criminals and has a powerful deterrent effect," a top Justice Department official declared last summer.
These days, executives who get caught can expect to serve considerably longer stretches than notorious business crooks of the past, according to criminologists and government officials.
Where junk-bond manipulator Michael Milken served two years and savings-and-loan cheat Charles Keating a little more than three, the Bureau of Prisons pegs Swanson's release date at March 9, 2016, provided his time is served with good behavior. He'll be 73.
Swanson still proclaims his innocence and vows to carry on an appeal, but he's realistic about the message that his long sentence conveys.
"I think it would deter anybody from doing anything that will attract the attention of the government," he said in an interview just before the holidays.
"You won't believe what the government is going to do to you. They're out there to get you, so beware. That's the only lesson you can learn."
Swanson's life as federal prisoner No. 06614-028 had a rocky start.
On the eve of his sentencing on Jan. 24, 2003, for looting a prominent farm cooperative based in Indiana, Swanson took a taxicab from Indianapolis to Chicago, then an Amtrak sleeper on to Seattle. He made a run for that city, he said, to avoid treatment for alcohol abuse at the Indianapolis jail.
When U.S. marshals finally brought him back to Indiana in March, U.S. District Judge Sarah E. Barker greeted him with a sarcastic "long time no see," then lowered the boom.
Even before his Seattle detour made him eligible for additional jail time, Swanson faced a stiff sentence. After a 15-day trial, a federal jury deliberated just eight hours before convicting him on tax evasion, fraud and money laundering charges. He accepted no responsibility for any wrongdoing.
Baker imposed 180 months out of a possible 188 under federal sentencing guidelines, noting that Swanson had abused his power as the chief executive of Countrymark Cooperative and destroyed the financial security of its employees and shareholders. She also ordered him to pay back $5.5 million and forfeit another $53.8 million.
After that, Swanson spent short stretches in the local jail and a federal prisoner transit center before landing on April 23 at the Federal Medical Center here on the decommissioned Fort Devens base.
It's primarily a prison hospital that also houses able-bodied inmates like Swanson to help maintain the facility. The Harvard and University of Chicago graduate said he scrapes, mops, waxes and buffs the dining-hall floor.
Swanson's sentence is too long for a "Club Fed" type of minimum-security federal prison camp, so he requested the Devens location to be close to his family four hours away in New York.
Because it accepts inmates from across the federal system for medical treatment, the hospital/prison maintains tight security. Swanson's every movement is carefully controlled, behind brick walls topped with coils of razor wire.
He lives in a noisy 120-inmate dorm, sharing a bunk bed with a 22-year-old drug offender. With plenty of time on his hands, he has finished writing a history of New York's prestigious Explorer's Club for world travelers, which he once headed, and an unpublished novel of international intrigue. He also teaches beginning Spanish.
Once chief executive of Central Soya Co. and a prominent figure in Chicago's commodity markets, Swanson has learned to cut a deal in the prison economy. Recently, he traded three packs of preserved mackerel from the commissary for a stylish haircut from an inmate using blunt-tipped scissors, he said.
Although Swanson said he has met at least five fellow inmates who once headed private companies, and others who were millionaires before Uncle Sam intervened, the prison population hails overwhelmingly from the bottom of the economic strata.
"They are treating CEOs like everybody else," he said. "They take the houses and attack the families just the same as for drug dealers. It's a fire-bombing."
Among a U.S. prison population of 2.16 million, barely more than a thousand are believed to be doing time for corporate frauds.
"You have to accept it," Swanson said of his new life as a federal prisoner.
"Life as you know it is over."
