Raj Rajaratnam reports to prison

Nancy Marshall-Genzer Dec 5, 2011

Kai Ryssdal: Prisoner 62785-054 reported to the Federal Medical Center in Ayer, Mass., today. If he serves his full sentence, Raj Rajaratnam will be behind bars for the next 11 years.

The founder of the Galleon Group of hedge funds was convicted of insider trading a couple of months ago. Now he’s going to be a totally different kind of insider. Marketplace’s Nancy Marshall Genzer reports.

Nancy Marshall Genzer: Raj Rajaratnam is now in a federal prison in Ayer, Mass. It has a hospital wing; he has diabetes.

Ed Bales heads Federal Prison Consultants. He says Rajaratnam, a former billionaire, will be using the black market currency of prison: Stamps and packets of dried mackerel from the commissary.

Ed Bales: They eat it or they trade it for something else of other value. You’d be surprised. It’s a very interesting environment.

An environment surrounded by razor wire and armed guards. Rajaratnam could be transferred to a low-security prison camp next to the main prison. But it wouldn’t be any paradise.

Alan Ellis: There’s no such thing as Club Fed anymore.

Alan Ellis is an attorney specializing in white collar sentencing. He says, in the ’70s, the public heard stories about Watergate players being pampered in prison. Then Hollywood got into the act.

Ellis: There was a film called “Goodfellas” and it showed these mafia inmates basically feasting on lobster and steak that they had shipped in from the outside.

“Goodfellas” clip: In prison, dinner was always a big thing. We had a pasta course, and then we had a meat or a fish.

Five of the cushiest prison camps were eventually closed. Larry Levine was in one in the ’90s.

Larry Levine: I was like an efficiency expert for organized crime. I was working with some of our Italian friends.

Levine says things have changed a lot in the camps since he did his time.

Levine: They were letting people order in their own food. They don’t have that anymore. I mean, just little things. Other than, let’s say, the golf courses and swimming pools that they took away.

But Levine says camps are still much better than higher security prisons. With just one guard for every 100 inmates, camp rules can be bent.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.