Jesse Litvak's Prison Life as Inmate No. 21467-014 StartsBy
Convicted bond trader is serving 2-year sentence in Florida
Case remains on appeal, but judge rejected his plea for bail
Jesse Litvak, federal inmate No. 21467-014, is learning the weekday routine.
Lights on: 4:45 a.m.
Breakfast: 5 a.m. to 6 a.m.
Mail call: 5:30 p.m. through 8:30 p.m.
Lights out: 10:30 p.m.
On Saturdays, Sundays and holidays, brunch is served after the 10 a.m. prisoner count, according to the prison’s orientation guide.
So it goes at the Federal Prison Camp, Pensacola -- where Litvak, the former managing director at Jefferies & Co., started serving his two-year sentence this week for lying to clients.
As prisons go, it isn’t bad bad. Perched near the Gulf of Mexico, FPC Pensacola is considered one of the cushier federal pens -- a classic “Club Fed." Forbes rated the facility second in a list of "America’s 10 Cushiest Prisons" in 2009.
It’s one of the last four remaining independent federal minimum-security prison camps for men. Other federal prison camps are located adjacent to regular prisons and share staff --some of whom have the mentality of people dealing with hardened inmates.
“If you’ve gotta do time, it’s one of the better places to do it,” said Alan Ellis, a consultant and criminal defense lawyer who wrote a guidebook on federal prisons. "All things being equal, it’s a pretty laid back place.”
Still, Pensacola is a prison. One with dormitory housing, movies and, according to reviews, decent food. The two-page order sheet for the commissary runs from shrimp soup (55 cents) to Braun shavers ($35) to New Balance sneakers ($75.74). Prices are subject to change; all sales are final.
Counts are taken daily at 12 a.m., 2 a.m., 4:30 a.m., 4 p.m., 9 p.m. and 10 p.m. Litvak, like all inmates, will be required to wear his uniform 24/7, with the shirt buttoned and tucked.
No towers or high walls here, although a map details an "out-of-bounds perimeter." The camp is located on Saufley Field, part of Naval Air Station Pensacola. Most inmates are assigned menial jobs on the base, like cutting the grass.
Gerald J. Luongo, a former New Jersey state legislator who served 10 months at a former federal prison near Pensacola after pleading guilty to breaking federal banking laws, said the key to enduring a stay is the right attitude.
"If you’re angry at the government, forget it," said Luongo, who wrote a book called "Surviving Federal Prison Camp" after his stay in the original "Club Fed," in nearby Elgin, which was closed in 2006. "You gotta just go with the flow."
Former inmates include the ex-National Football League running back Jamal Lewis, who served four months in Pensacola in 2005 for using a cell phone to attempt to set up a cocaine deal, and former National Basketball Association referee Tim Donaghy, convicted in 2008 of wagering on games and passing on inside information. Former Goldman Sachs & Co. partner Robert Freeman spent four months at the facility in 1990 after pleading guilty to insider trading.
Litvak, 42, was the first person arrested in the government’s crackdown on deceptive bond trading tactics. The 700-inmate Pensacola facility is about a nine-hour drive from his Boca Raton home. He was scheduled to surrender on Sept. 12, but his report date was pushed back a week as Hurricane Irma approached Florida.
Litvak had sought to serve his punishment under house arrest, saying that he was the primary caregiver to his two children while his wife runs a dental practice in Boca Raton. Prosecutors said Litvak had "every advantage in life," in opposing the request. Kannon Shanmugam, Litvak’s lawyer, declined to comment for this story.
The hard part of serving time is “being separated from your family and those that you love,” said Michael Santos, a former federal inmate, now a prison consultant and expert on incarceration. "Once you get your mind around that you can find time to grow."
Inside Pensacola, Litvak will have access to education, recreational opportunities such as a walking track and exercise equipment and numerous work options, Santos said. The food is better than typical prison fare, but not restaurant-quality. One of the toughest adjustments is dealing with limits on communications -- such as being restricted to 300 minutes a month of phone time, Santos said.
The charges against Litvak sent shock waves rippling through Wall Street as traders suddenly faced the prospect of serving time in federal prison for decades-old tactics. The verdict helped to bolster prosecutors’ contentions that lying to even the most-sophisticated customers can amount to securities fraud.
Meanwhile, more cases are winding through courts. Michael Gramins, one of three Nomura Holdings Inc. bond traders charged with similar behavior, was convicted of one count of conspiracy to commit securities fraud after a month-long trial in Hartford earlier this year. Jurors cleared him of six fraud counts and deadlocked on another two.
A former Cantor Fitzgerald & Co. trader is set to go on trial in Hartford in April on similar charges.
Litvak is still hoping to clear his name. But an appeals court last month denied his bid to stay out of prison during his latest challenge.
The case is U.S. v. Litvak, 13-cr-00019, U.S. District Court, District of Connecticut (New Haven). The appeal is U.S. v. Litvak, 17-1464, U.S. Court of Appeals, Second Circuit (Manhattan).