Former Enron CEO Jeff Skilling, right, leaves the Bob Casey U.S. Courthouse after the end of his fraud and conspiracy trial May 25, 2006 in Houston.
Photo by Dave Einsel—Getty Images
By Daniel Roberts
July 7, 2014

It may be strange to realize that five years have already passed since Bernard Madoff reported to prison in the summer of 2009.

Madoff, as the world knows, ran one of the grandest Ponzi schemes in history until the swindle began to unravel in 2008. He pleaded guilty to fraud, money laundering, perjury, and false filing with the SEC—but the story always seemed larger than the sum of the crimes.

Maybe it was because of the sheer enormity of the heist—the tabloids pegged the losses at $65 billion (though later assessments said the figure was wildly inflated). Or maybe it was the boldfaced names that he bilked, figures that ranged from NY Mets owner Fred Wilpon to the charitable foundation of Nobel Peace Prize-winner Elie Wiesel. (Wiesel’s charity reportedly lost more than $15 million.) Or maybe it was that Madoff, a former chairman of Nasdaq, had seemed for years to be a pillar of the community—or that the crime had gone on, unchecked, for so long, or that regulators had missed so many clues to the malfeasance along the way. Or maybe it was the way Judge Denny Chin described Madoff’s crimes (“extraordinarily evil”) or the sentence that he handed down: 150 years. But in any case, the Madoff case seemed to define a generation’s worth of white-collar crime in the U.S.: the signal sent out was that this type of thievery was BIG and RARE and, when caught, it would be PUNISHED to the maximum.

As it turns out, that’s hardly the case at all. White-collar crime—a rubric that includes not just Ponzi schemes, but also a bevy of financial misdeeds, from embezzlement to money laundering to racketeering to insider trading—is far more common than many think. “White-collar” offenses made up 9.4 percent of federal criminal cases prosecuted in 2012 (the most recent report available), according to the U.S. Attorney’s office. That figure was up from 8.8% in 2009.

And yet a much smaller share of this group actually serves time. As of June 19, just 5.9% of the federal inmate population is in prison for crimes related to extortion, fraud, bribery, counterfeiting, embezzlement, banking and insurance-related offenses, according to the Bureau of Prisons (BOP). For comparison, nearly half (49.8%) of the country’s 216,620 federal inmates have been locked up for drug offenses; 15.7 percent for arson or crimes related to weapons and explosives; and 10.4 percent for immigration-related offenses. (We’ve examined only federal crimes for this report; there may be a significant number of white-collar criminals in state prisons.)

More than half of the best-known white-collar inmates—names like Raj Rajaratnam and Raj Gupta, to throw out a couple—are in prison because of insider trading. Since the mid-2000s, the Securities and Exchange Commission and federal prosecutors have ramped up their investigations, and the evidence is beginning to show. Since August 2009, for example, U.S. Attorney Preet Bharara has charged 90 people with insider trading; out of those, 84 have been convicted of or pled guilty to crimes, and 62 of them have been sentenced.

Where are all these white-collar criminals? Well, start with Madoff. He’s in Butner, N.C. And whatever happened, you might ask, to all those other fraudsters, like Jeff Skilling, Bernie Ebbers, and John Rigas…? Those fellows are in Montgomery, Ala.; Oakdale, La.; and Allenwood, Pa., respectively.

Like you, dear reader, we have often wondered about where the major white-collar convicts of yesteryear have ended up, and wondered much else as well—like how much time they have left in prison, and what life on the inside is really like.

So we thought we’d kick off your summer with a little prison roundup. There are plenty of surprises, as we discovered. Two of the best known of this breed, for instance—Tyco’s Dennis Kozlowski and Qwest’s Joe Nacchio—were both released in the past two years. Another surprise (or not) is that there are no women on our list: Roomy Khan and Winifred Jiau, both sentenced for crimes related to the Galleon Group insider trading case, were released in June.

Many of these imprisoned gentlemen are in minimum or low-security institutions. But some are in medium-security, and one or two were unlucky enough to land in high-security prisons. A chasm of difference separates each level, it’s worth noting. The change just from minimum-security to low-security, for example, can mean, in some locations, the addition of barbed-wire fences.

Raj Rajaratnam and a few others are currently housed in administrative facilities. That doesn’t mean that their digs are cushy, however. “Administrative security” facilities like Devens (where Rajaratnam is located, in Ayer, Ma.) aren’t necessarily higher or lower security than other prisons, a BOP spokesperson explains. The administrative label simply means that the staff has to deal with inmates of all security levels. Higher-security inmates require a higher staff-to-inmate ratio. And at a medical center like Devens, that extra staff may not be security, but rather doctors and nurses.

Even minimum-security prisons are not places where you’d want to spend any extended amount of time. Just ask former Wall Street M&A lawyer Matthew Kluger, who in June 2012 was handed the longest-ever sentence for insider trading. He’s reading this feature on a computer monitor inside a federal prison in Morgantown, W.V. Kluger sat down with Fortune last month for a lengthy and candid chat about his daily life in prison. (See our related story: “LIFE BEHIND BARS: Matthew Kluger reveals all.”)

To flesh out the details of our gallery we used the inmate locator run by the BOP, as well as a range of other governmental sources. And while the list below is not comprehensive, chances are you’ll find more than a couple of names you recognize. (Regarding the scope of jail terms for each, we’ve included the term handed down originally in sentencing; many of those prison terms have since been shortened.)

Below, our top 10 ranking of financial crime all-stars—ranked from most infamous to least. Plus, the tales of 15 lesser-known prisoners to round out our 2014 summer white-collar gang.


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