(WRIC) — If you are going to be stuck in prison, you may as well make some money while you are doing time. We are not talking about making license plates or working in the laundry, but drawing in thousands —even millions — in cash. How is that possible?
If you and a few friends are willing to bend the law again, it can certainly be done. One example is the strange case of Andrew Weiderhorn.
Weiderhorn founded Wilshire Consumer Credit (WCC), becoming a millionaire before the age of 30. After the collapse of WCC, Weiderhorn started Fog Cutter Capital. His activities at WCC drew the attention of law enforcement, and he was charged with crimes including filing a false tax return. Wiederhorn reached a plea deal for a 12-month prison sentence and $4.6 million in fines.
While Weiderhorn served time in prison, Fog Cutter’s board of directors elected to compensate him with a bonus equal to the fines that he paid — thus he earned $4.6 million while incarcerated. Federal law prohibits a convict from engaging in business dealings while he or she is serving time, consequently Fog Cutter was immediately delisted from the NASDAQ exchange.
Undoubtedly, there are other prisoners taking the illegal route in ways that never see the light of day. However, there is one legal way you can make millions behind bars — if you are fortunate enough to have a large pension. Keep in mind pensions are really deferred salary that an employee already earned during their working years.
There are multiple cases of prisoners over the years who are receiving pensions while incarcerated. The New York Times ran an article in 2003 detailing some of the incarcerated beneficiaries of pensions, including former Brooklyn judge Victor Barron and retired New York City tax assessor Joseph Marion. Both were convicted of taking bribes but drew hundreds of thousands of dollars in pensions during their time behind bars.
The former police chief of Savannah, Georgia, Willie Lovett was convicted in 2015 of illegal gambling and extortion but will receive a $130,000 annual pension during his seven-and-a-half year prison term. Lovett fell through several loopholes and benefitted from being convicted under federal law instead of state law.
Laws covering pensions vary, but the general principle is that once a public worker is hired and guaranteed a particular set of benefits, there is no legal way to take them away later. Laws have changed since Lovett was hired so future chiefs cannot benefit, but the laws do not apply retroactively.
Those who are in the military justice system can also end up drawing fair amounts of money while imprisoned. The Military Code of Justice decrees that pay continue until a defendant is proven guilty.
In one of the most outrageous examples, Fort Hood shooter, Nidal Malik Hasan maintained his rank of Major and received his military pay while awaiting trial. He racked up almost $300,000 during his nearly four years of incarceration, before being found guilty and sentenced to death. Ironically, victims’ families were denied Army benefits because of the classification of “workplace violence” instead of combat-related death.
As outrageous as it sounds, it really is possible to accumulate large amounts of cash while in prison. However, keep in mind the scenarios that bring in significant cash while behind bars are rare and special circumstances. If you ever find yourself in prison, do not expect to make millions, or even thousands, while you are there. You have far higher priorities to worry about.
This article was provided by our partners at moneytips.com.