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Working The Jailhouse Black Market

prison black market 300x246 Working The Jailhouse Black MarketA fascinating article about how contraband cell phones facilitate the prison black market economy. An economy in which even some of the guards are participants. As the article states, “a $20 basic phone earns the guards that sell it an easy $400 to $500…But if you use the phone and sell time off of it to the other inmates, you’ll make your money back in one month.” As we have written before, wireless airtime is the new prison currency.

There is a long and sordid tradition of business going on in American prisons.

The isolated consumer base, the high demand for goods, the excruciatingly limited supply — it’s a hothouse of entrepreneurial finesse, extreme risk — and obscene returns.

The biggest selling items behind bars have always offered a slice of escape. Not a file, or a schematic of the pipes leading outside the gates, but an instant of abandon allowing an inmate to forget about his life and to live outside the walls, if only in his mind.

Until recently that meant drugs, and the slippery trick of allowing the mind to believe it was someplace else, but that has changed.

There are still drugs in prison, but now there’s a better escape that for the enterprising and charming convict may even generate a source of monetary return: smart phones. It’s no secret, prison cell phones are in the news and we wanted to see what we could find out.

To learn more about the “hustle,” what inmates call any moneymaking scheme in prison, we rented a P.O. Box and sent off letters to a handful of American prisoners. Among others we heard from Leon Kingsley (not his real name) who eventually talked to us on a smart phone away from the prying eyes and ears of penal officers. Kingsley says that a $20 basic phone earns the guards that sell it an easy $400 to $500. Kingsley sent us the pictures here to prove what he says is the truth.

“And the police will do it, too, because they get paid very little,” Kingsley, who’s serving a 10-year state sentence and 110-month federal sentence, says “But if you use the phone and sell time off of it to the other inmates, you’ll make your money back in one month.”

“There’s a lot of money in here…a lot of money you can make. If you have a good officer, you can make $4,000 or $5,000 a week.”

If the phone has wireless capabilities, it can cost the prisoner — or their people on the outside — as much as $1,000. With high-speed internet access, Kingsley says the inmates will make Facebook accounts, “meet girls and get them to send money.”

For $50, the inmates can purchase 15 hours of phone time, typically broken up to an hour a day, 30 minutes at a time. Although most inmates use these precious moments to call friends and family, there’s also the opportunity for convicts to contact co-defendants and witnesses — such as the alarm caused when authorities found unauthorized cell phones in convicted serial killer Charles Manson’s property.

Through what Kingsley calls “word on the street,” prisoners usually know which guards will help them bring in contraband, the same way that civilians who want illegal goods know where to go and who to ask.

“You just try them up, you have to get talking to them,” he says.

If the officers agree to deal, the inmates have cash sent in.

Aside from cell phones, anything that you can’t buy at the prison store (commissary) has value on the inside.

Kingsley says a can of Bugler tobacco — which goes for around thirty bucks — can be broken down and sold for $1,200. An ounce of pot that costs $100 “on the streets” will go for $600 or $700 behind bars.

“There’s the weed man, the meth man, whatever you want. And your friends will tell you these things.”

In order to conduct business with one another, the prisoners have credit cards — most of them use Green Dot Reloadable prepaid cards, which their loved ones can purchase at drugstores.

Once the people “on the outside” purchase money packs to put on the prepaid cards, they’ll receive a security code, and the people “on the inside” can use these codes to purchase whatever they want. Their sellers will then call a 1800-number, “give them the code” and have the money downloaded onto their own credit cards.

“A lot of stuff in here is run by the gangs…there’s the Mexican gangs, the Bloods, the Crips. They all run their own shit. They keep their business pretty good and they don’t F*** each other over.”

“They always say that they were already in gangs before coming into prison, but a lot of them are weak people forming up with others so no one runs them over.”

“I mean, I’m not in a gang and I do fine,” he says.

When you’re involved with anything illegal — even if you’re already in jail — you run the risk of “catching” new charges, but Kingsley says he “hasn’t seen it getting done.”

When he was caught with a phone, Kingsley tells us he received a written a disciplinary report (DR), which required him to go to the prison court.

With a D.R. citation, Kingsley says the officers might restrict your commissary privileges, deny you from making legitimate phone calls or receiving mail for 90-days, but most likely, the offender won’t catch new charges because the officers try to “sweep it under the rug.”

“They know the cops are bringing it in, not the prisoners. And they don’t want news of that getting out.”

Kingsley says the officers will do a “clean up,” where they check the cells, twice annually, and confiscate anything unauthorized. This gets expensive for inmates so they hide their contraband, like phones, in food and in “places where [they've] cut into the walls,” under boxes and inside furniture if they can manage to take it apart.

“It’s a constant racket for officers to make more money really, because they’ll take our stuff so we can sneak in more stuff and pay them all over again.”

Kinsley shares an open cell with 40 other people. He has about five years left to serve on his sentence.

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Contraband Cellphones Flood Ohio Prisons

contraband wireless airtime Contraband Cellphones Flood Ohio PrisonsAs we have written about before, wireless airtime and contraband cell phones have become the new prison currency. According to this article, smuggled cell phones in Ohio prisons are “a commodity inside our system,” used to sell and barter, and for personal use, said Vinko Kucinic, the corrections department’s chief security-threat investigator. Gangs, he said, are “power-based. If they can control the contraband trade, they have power.” A cellphone costing $25 on the street can fetch $500-$700 on the prison black market. One way to reduce the value of wireless airtime as prison currency is to co-opt the non-criminal usage by supplying the secure prison cell phone solution offered by meshDETECT.

Illegal drugs, weapons, tobacco and cellphones are flooding Ohio’s prisons, spurring a new wave of violence as rival gangs battle for control of the black market.

The frequency of violent disturbances has doubled since 2008, leading Ohio’s top prison official to launch a study about whether a March 2009 tobacco ban is stirring the trouble.

“Tobacco has become a currency that’s used in our prisons,” Director Gary Mohr of the Ohio Department of Rehabilitation and Correction said.

Ohio’s prisons house more than 50,000 inmates and will cost taxpayers $1.57 billion in fiscal year 2012. Contraband has long been a problem in the prisons, with inmates gaining access to it through the mail, visitors and corrupt prison employees.

But Mohr said something new is happening: People in the outside world have become much bolder about throwing packages of contraband over perimeter fences, where inmates on work details can pick them up. Mohr said that’s especially true at prisons like Dayton Correctional Institution and Allen Correctional in Lima, where prison grounds abut areas accessible to the public.

“All over this country, facilities are being assaulted, almost, by outside people,” he said. “It’s a battle that didn’t exist in the past, certainly (not) to the degree we have it now.”

The ban on tobacco created a new black market, while a younger crop of tech-savvy inmates is also fueling an increasing trade in cellphones and accessories.

Officials say convicts are using smuggled cellphones to continue running outside-world criminal activity from inside prison walls and to coordinate more contraband drops.

That contraband is sparking prison-gang violence, officials say. “It’s a commodity inside our system,” used to sell and barter, and for personal use, said Vinko Kucinic, the corrections department’s chief security-threat investigator. Gangs, he said, are “power-based. If they can control the contraband trade, they have power.”

Mohr, a former Ohio prison official who worked in private-sector prisons for years, said he was “made sick” by the increase in violence he noticed after returning as director in January 2011.

“I could not fathom what was going on in our system,” he said.

The director has ordered his research department to investigate the causes of disturbances involving four inmates or more to see how many are linked to the illicit tobacco trade. He expects results in three or four weeks.

The frequency of those disturbances has jumped on average from one every 28 days in 2008 to one every 14 days in 2010, the first full year after the March 2009 ban, Mohr said. The policy was imposed by Mohr’s predecessor, Terry Collins, in a bid to cut inmate health care costs.

Mohr stopped short of saying he may lift the ban.

“I would have to weigh whether the degree of violence” outweighs the health benefits of outlawing tobacco, he said.

Smuggling even in ‘supermax’

Drug seizures nearly tripled in the first 11 months of 2011 when compared to all of 2008, jumping from 526 to 1,402. The number of confiscated weapons went from 534 to 1,061 and cellphones from 36 to 201, according to department statistics.

Even at the “supermax” Ohio State Penitentiary in Youngstown, ultrasecure home to the state’s most incorrigible convicts, officials confiscated five cellphones and three chargers last year.

A guard under investigation in one of the phone-smuggling incidents resigned in November, said prison system spokeswoman JoEllen Smith.

Officials believe there are several reasons why seizures are up. They say smuggling is on the rise, but guards also are getting better intelligence from inmate tips that’s leading to more confiscations.

Nobody knows, of course, how much contraband goes undetected.

There’s big money involved in contraband smuggling. For example, guards found a 6-pound package of tobacco last week at a prison honor farm.

Mohr said just one hand-rolled cigarette from that package might sell for $5 in the prisons, even though cash itself is contraband.

Tobacco has become “the No. 1 contraband item of choice,” said Mark Stegemoller, chief investigator at Warren Correctional near Lebanon. “It’s very, very profitable. We just removed a staff member a couple months ago who was making a lot of money bringing in tobacco.”

Tobacco smuggling isn’t illegal, however, so smugglers can’t be criminally charged.

Cellphones are more valuable still. Stegemoller said a cellphone costing $25 on the street can fetch $500-$700 on the prison black market.

Warren and Allen Correctional have recently acquired police dogs trained to sniff out tobacco and cellphones as well as illegal drugs in a pilot program that could expand to other state prisons. It is illegal to convey cellphones into Ohio prisons.

Prison officials in Ohio and elsewhere say cellphone smuggling presents a serious threat because the phones allow inmates to orchestrate crimes outside prison gates, plot escapes and uprisings, intimidate witnesses, public officials and crime victims, and make plans for more smuggling.

They can speak freely on cellphones, while their conversations on prison phone systems are monitored.

“A cellphone is a very dangerous thing in our system,” Kucinic said. “Many times, they can be more dangerous than a shank.”

Illegal cellphones a U.S. epidemic

Cellphone smuggling is reaching epidemic proportions in prisons across the country, and at least one murder was ordered from inside jailhouse walls.

Last year, a New Jersey inmate was sentenced to 14 more years for using a smuggled phone to run an identity-theft ring targeting big-box retailers, allegedly with the help of seven Cleveland residents, the Plain Dealer reported.

Guards at a Georgia prison last summer found eight cellphones stitched up in the belly of a dead cat that had been thrown over a fence. At another Georgia prison, somebody rolled a basketball containing 50 phones through a hole in a perimeter fence.

Inmates at seven Georgia prisons in 2010 also used smuggled phones to stage a simultaneous strike for better pay and working conditions.

In California, legislative analysts found that corrupt prison employees — who, unlike visitors, don’t have to pass through metal detectors — were the main culprits in smuggling phones. More than 10,000 cellphones were confiscated in California prisons in 2010 and, according to Time magazine, one guard admitted to making more than $100,000 in a single year from phone smuggling. Twice in two years, California prison officials found cellphones in the possession of Charles Manson, the cult leader who plotted the 1969 Tate-LaBianca murders.

In 2010, a South Carolina prison captain in charge of keeping out contraband was shot and nearly killed at his home, an attack ironically planned by an inmate with a smuggled cellphone.

Texas officials found 14 cellphones on death row inmates after one of them made threatening calls to a state senator in 2008.

And in 2007, a Baltimore jail inmate successfully used a smuggled cellphone to hire a hitman to kill a witness in his upcoming trial.

Ohio prison officials have found cellphones hidden inside items like tennis balls and stick-deodorant containers, tossed onto prison yards, and in camouflaged packages, including one that looked like a rock.

Prison officials have explored technology that could jam the signals of unauthorized cellphones, but such technology is expensive, fallible and may not be permitted under Federal Communications Commission regulations.

Some using dogs,low-tech security

In the absence of high-tech security measures, prisons are trying other measures.

At Warren Correctional, investigator Stegemoller uses Dyna, an 18-month-old Dutch shepherd, to sniff out illicit cellphones and tobacco, as well as marijuana, cocaine, heroin and methamphetamine.

Dyna has been working since Nov. 1, homing in on the lithium in cellphone batteries. In a demonstration for Dayton Daily News, Dyna repeatedly and unerringly found cellphones and tobacco Stegemoller hid in a visitation room.

Dyna was purchased, along with a dog for the Lima prison, with a $27,000 grant. Allen Correctional had 117 phones confiscated since 2008, more than one-fourth of the system-wide total of 428.

It’s not clear how effective the dogs will be. Dyna has been responsible for only a handful of seizures so far. However, said Stegemoller: “The dog itself is a deterrent. As soon as I walk into a cellblock (with her), things start flushing and going out the window.”

Operations Deputy Rudy Pringle said during shakedown with the dog around Christmas, inmates “flushed so much stuff, it plugged up our sewage system.”

Prison officials acknowledge it’s a constant struggle to match wits with smugglers. “The prison lifestyle is a hustle,” Kucinic said. “In order to hustle, (inmates) want access to contraband. They’re very creative as to how they get (it) into our system. When you think you’ve got a (smuggling) method figured out, they’ll come up with a new one.”

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Is Wireless Airtime The New Prison Currency?

wireless airtime prison currency 170x300 Is Wireless Airtime The New Prison Currency?Traditionally, tobacco and stamps have been the preferred currency in prisons. But now it appears that in some prisons cellular airtime on contraband smuggled phones may be the new prison currency. According to this article, prisoners in a South African jail are using smuggled cell phones to run a scam to get wireless airtime.

A prison official states, “We have found the phones and sim cards in the strangest of places. Some of them hide it in their rectum, in bars of soap and in the bunk beds. Money is not allowed in prison, so airtime is the preferred currency. Cellphones and airtime were a sought-after commodity in prison with inmates trading these for drugs, cigarettes, food, toiletries, pornography and cash”

The problem with only addressing the supply side of the contraband cell phone problem is that demand still exists. Airtime, unlike tobacco, cannot be easily found or confiscated. Stored in a wireless network billing record and accessed via a tiny and easy to conceal SIM card, it is a “virtual” currency within a prison.The emergence of cellular airtime as a new form of prison currency can be preempted however by co-opting the demand for airtime through the provision of a secure prison cell phone solution such as meshDETECT.

Inmates at Westville Prison in Durban, posing as policemen, are believed to be behind a cellphone scam that has raked in thousands of rand.

Posing as either a Superintendent Naidoo or a Warrant Officer Reddy, the prisoner calls the victim and warns them they either have outstanding traffic fines or a warrant has been issued for their arrest. They are then ordered to pay or go to jail.

A senior warder at the prison told the Daily News that inmates find their victims through advertisements, articles, happenings and classified columns in magazines and newspapers.

The Daily News has spoken to three victims of the scam and this week three cellphones were seized from cells during daily raids, said the source.

The calls, according to the source, are generally made on a Friday and the victims are told they will be kept behind bars over the weekend if they do not pay up. Victims are either told to transfer money into a Money Market account at Checkers or to buy airtime and transfer it to the inmate’s cellphone. The source said that cellphones and airtime were a sought-after commodity in prison with inmates trading these for drugs, cigarettes, food, toiletries, pornography and cash.

He said cellphones were also used by the prisoners to run online businesses and sell airtime.

However, Department of Correctional Services spokesman, Nokuthula Zikhali, denied that the scam was perpetrated by prisoners at Westville. She said according to policy, offenders were not allowed to keep cellphones.

Zikhali said offenders could only make calls from telephone booths located outside their cells and at a specific time.

In the latest incident on Friday a Tongaat man was almost conned out of R1 800 by a “Warrant Officer Reddy”.

“Reddy” called the man and told him he had R1 800 in outstanding traffic fines and needed to deposit the money into a money market account. He threatened to go to his workplace and throw him in the back of a police van if he failed to comply.

Fortunately, the man smelt a rat and alerted the police. But this did not deter “Reddy”, who made more than 45 calls demanding the money.

“A policeman tracked the call to Westville Prison. When I confronted him (on the phone), he wished police luck in finding him. He said there were thousands of prisoners at Westville,” the victim said.

A Durban North estate agent, Zakia Peer Mahomed, said a “Warrant Officer Reddy” called her last week, telling her that her husband had been arrested for non payment of traffic fines. He told her to buy airtime and send it to his phone.

Then, he asked her to meet him at a supermarket in Phoenix to hand over R1500 in cash.

“He was very pushy. But, I caught on it was a scam. I called the police. They tried to track him but were unsuccessful.”

Durban North couple, Umberto, 75, and Roberta Josi, 74, were not so lucky. They were conned out of R1 650 by a “Superintendent Naidoo” earlier this year. Roberta said “Naidoo” called her husband and told him that Roberta had been arrested and was at Westville Prison. He demanded R1 650 for her immediate release.

“I was not at home at the time and my husband could not reach me on my cellphone. He was afraid and went to a supermarket where he bought the airtime. ‘Naidoo’ then called him back and asked him for the voucher number on the receipt. He then downloaded the airtime on to his phone.

“He then had the cheek to ask my husband to buy another R2 000 worth of airtime. By this time Umberto realised it was a scam. He reported it to the Durban North Police. A private investigator later told us the calls were being made from the prison.”

All three victims had their names and cellphone numbers published in various newspapers before they were called.

The prison source said cellphones and sim cards were smuggled into the prison through corrupt officials and relatives of the prisoners.

“We have found the phones and sim cards in the strangest of places. Some of them hide it in their rectum, in bars of soap and in the bunk beds. Money is not allowed in prison, so airtime is the preferred currency. Some of the prisoners have sim cards with over R5 000 airtime loaded on to it.”

Umesh Raga of the Judicial Inspectorate for Correctional Services said the allegation of any inmate being in possession of a cellular phone was of concern since these were prohibited in correctional centres. He said they were unaware of the scam.

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