Why I read Lessons From Prison: 

Justin Paperny, the author of Lessons From Prison, was confined with me at Taft Camp for about one year.  While he was here we developed a friendship and I had the opportunity to work with him as he made preparations for release.  He participated in a class that I taught, and after listening to the message I presented, made a commitment to use his experience as a teaching tool to help others make decisions that will enhance their lives.  He told his story through his book and, although I provided him with some suggestions while he was writing it, I decided to read the book in its entirety for the first time because of news I’ve received describing how helpful others found Justin’s book. 

What I learned from reading Lessons From Prison:

Throughout the course of my lengthy imprisonment, I’ve taught courses with thousands of participants. My message always focuses on steps we can take to overcome adversity and to prepare for law abiding, successful lives upon release.  From reading Justin’s book, I see that he really embraced this message, incorporating it into his life and expanding upon it in a way that far exceeds anyone else who has participated in my classes.  By reading Justin’s book, I learned more about the pressures that influence people who come from privileged backgrounds, study in top universities, and lead distinguished, professional careers.  Justin spoke honestly about his background and the decisions that led him into troubles with the criminal justice system.  He called it “the fraud triangle,” saying that when an individual feels pressure of some sort, has a position that allows him to cheat, and can rationalize his act, he becomes susceptible to fraud.  It’s a struggle that many white-collar offenders describe, but Justin articulates it well in his book.  More importantly, he shows how an individual can redeem himself and work toward leading a more responsible, contributing life. 

How reading Lessons From Prison will contribute to my success upon release: 

Justin’s book and the descriptions he provides will give me a tangible product I can use to show others that with discipline, we can triumph over adversity.  Although Justin doesn’t like to acknowledge the adversity he conquered, I’ve seen one-year prison terms drive weaker men to the brink of suicide.  I admire Justin’s strength, his discipline, and willingness to work toward something better.  He’s an excellent example I can use to show others that those who work can emerge stronger from adversity.

Despite my inability to join in festivities, I certainly have much for which I can feel grateful. I express gratitude for the many blessings of my life every day, and today I bow my head with special prayers for my loving wife, for my family, for good health, and for the opportunities I have to appreciate life.

Yesterday I met Leighton, a young man who self-surrendered to Taft Camp from the San Diego area. New to prison, Leighton brought a fresh perspective as he experienced his first full day in federal prison. He had spoken with my friend Justin before he self-surrendered, so Leighton had an idea of what to expect. Yet he stood in amazement when he saw the amount of waste firsthand.

It’s true that the easy atmosphere of federal prison camps would astonish most taxpayers. At first impression, the prison camps look like recreational resorts, with grown men spending all of their time lounging, exercising, or wasting time. Prison camps truly waste taxpayer resources and human lives.

Certainly, the “punishment” comes with separation from family and community. But taxpayers suffer a high cost for this brand of justice. As Leighton observed, an enlightened society could do so much more than operate these prison camps that separate nonviolent and non-threatening people for years at a time.

Justin graduated from the University of Southern California in 1997. He had played third base for the Trojans’ baseball team, and he earned a degree in psychology. Following his graduation, Justin pursued a career as a stockbroker.

Justin acknowledge that he had been reared with privileges, good role models, and advantages that others did not enjoy. By his 25th birthday, the then distinguished brokerage house of Bear Stearns employed him. When he was 26, the rival firm of UBS recruited Justin by offering him a mid six-figure signing bonus. At 28, Justin allocated and oversaw more than $150 million worth of securities. As a young, single man, Justin’s annual income placed him in the top three percent of all American earners.

Despite what others would have considered a smashingly successful career, Justin yearned for more. Greed and envy clouded his judgment. When he learned that a client of his was operating a Ponzi scheme, Justin took steps to shield himself from liability. Though he did not take appropriate steps to report the fraud to authorities. Having done so would have cut into the commissions he counted on earning. By abusing the discretion that came with his position, Justin became complicitous with the fraud.

Those were the reasons that brought him to prison. While we were together, I asked Justin to participate in a project on which I was working to gather data on the subjects of ethics. I explained the efforts I was making to contribute to the work of Professor Jana Schrenkler, of Saint Mary’s University. Professor Schrenkler had designed a questionnaire that I was using as a guide. Justin’s responses follow:

Ethical Development

1. Do you feel you have a good understanding of your personal core values? How did those core values guide your decisions while you were on the job?

Now, with nearly a year of imprisonment behind me, I have a much better grasp of my core values. Ironically, those were the same values that guided me as a child and through my college years. I was an athlete. I valued the importance of honesty, hard work, self-discipline. Once I graduated college, however, my allegiance to such values diminished. I had entered the world of money management. As a stockbroker, I made decisions that would lead to short-term earnings. I deeply regret having lost the core values that I know to have been right. I am ashamed to admit that while I was building my career, the values that drove my decisions had more to do with greed and immediate gratification.

2. What was the most important aspect of a career in business for you? What motivated you most?

As a young stockbroker, I was compensated in accordance with the amount of trading commissions I generated. I felt a constant pressure and motivation to earn more. My colleagues encouraged me to devote my time to activities that would yield higher commissions on trades, and fees we could earn through other areas, such as margin loans and asset management. The more money I had under management, the more income I generated for my brokerage house, my colleagues, and for myself. High earnings motivated me. Such values led me to decisions that I now regret.

3. Who do you think is responsible for the ethics of a company?

A company is made of individuals, and every individual who works for the company bears a responsibility for its ethical culture. The culture of ethics begins at the top. It works its way down through officers, supervisors, and every employee.

Ethical Decision Making

4. Did you have a written code of ethics at your company? Did you base your decisions around those cods.

We had a written code of ethics at both Bear Stearns and at UBS. Yet it was not a part of the culture. As financial services professionals, we had requirements to participate in various continuing education courses. Unfortunately, those were not the codes that drove the culture. I participated in the obligatory courses, though I focused more on my responsibilities as a young broker. As I perceived them, and as I was compensated, my superiors expected me to generate an income. Naturally, they expected me to use the discretion of a professional. Though I sensed that my duty was to the firm and to surpassing Wall Street earning expectations. The subject of ethics was not one we discussed.

5. Did you believe your business decisions followed your company’s core values?

I am ashamed to say that yes, I believe the decisions I made were consistent with the values of my company. This acknowledgment may strike some as absurd. I was a stockbroker, and a decision I made resulted in my being charged with securities fraud. Yet I am referring to the company’s core values as I perceived them, not to the company’s published values.

The published values may have touted the importance of ethics, integrity, and honesty. Unfortunately, such was not the emphasis at UBS or Bear Stearns. Indeed, both firms have been disgraced in recent months because of their unethical cultures.

My decisions were unethical. Unfortunately, I also feel they were consistent with the unethical culture in which I worked. That does not excuse my behavior, as I recognize now that I should have made decisions based on honesty, integrity, and the good character of which I was capable. Indeed, I let myself stray from what I know to have been right.

6. Did you think you should have been held to a higher ethical standard, given your position?

Without question, I should have been held to the highest ethical standard. I was reared in a good home. I had an education from the best schools. My clients trusted me to look after assets worth millions. That position leaves me without excuses, only a great deal of shame.

7. Do you feel your employees were equipped to recognize ethical dilemmas?

As a broker with many clients I employed an assistant. Her allegiance was to me and to the commissions I was generating. I do not believe that I provided her with the leadership necessary to recognize or resolve ethical dilemmas

Corporate Environment

8. Please explain the corporate culture within your company during your involvement.

I worked at Bear Stearns and UBS for the majority of my brief career. Prior to those two firms, I briefly worked at Merrill Lynch. Ironically, all these firms have been mired in scandal since the economic crisis began. One of the reasons, I believe, was that the corporate culture was driven by greed rather than good citizenship. I recognized it within weeks of beginning my career. I am ashamed to admit that I lacked the strength of commitment and judgment to act in accordance with a code of values that I know to be superior.

9. Is it possible to have a very aggressive corporate culture, yet foster an ethical environment?

Yes it is, I am certain of it. Such a culture, however, must be nurtured from the top. Although as a young broker I chose the path of least resistance, I had the privilege of acquaintance with some outstanding investment managers. They did not work for the large Wall Street firms. Instead, they ran boutique firms, and the leaders of those firms personified excellence. They were living the values they professed, and rewarded their employees with regular training. That training included speakers who offered seminars on ethics, balance, and the inherent value that accompanied lives of significance. The leaders of those firms aggressively recruited clients, though they emphasized that their culture differed from aggressive trading strategies. They nurtured long-term relationships with the client. Such was a winning strategy, though it was not one I appreciated at the time.

Reflections

10. If you could choose to redo anything, what would it be?

I would have continued to pursue higher education. I should have not only advanced to graduate school, but I should have continued learning in informal ways. My focus was wrongly placed on earning a high income. In my early 20s, I lacked patience and discipline to appreciate the value of wisdom. I needed more raining to grasp the significance of reputation, of leading a values-centered life. That misdirection did not serve me well. As a consequence of my having lost touch with my core values, I made decisions that disgraced my career. Worse, it contributed to the victimizing of others.

11. Did anything good come out of this?

Yes. I feel sad for the trouble I caused to so many others. Though I feel grateful to have had this opportunity to recalibrate my life. Prison has given me a wake up. I intend to live the remainder of my life as an honest man, never having to look over my shoulder because of unethical decisions I made. In time, I hope that efforts I make to redeem the bad decisions of my early career earn  my place back as a good citizen.

12. What is your biggest regret?

The biggest regret I have is the shame I have caused to my family, and the lifelong disgrace my decisions bring to me. I strive to atone, but there are some bad decisions we can make that we cannot undo. I caused others harm, and each time I see a financial scandal on the news, I feel a sense of humiliation. It stings. I regret the bad choices that I made in order to serve my interests at the expense of others.

13. What roadblocks do you expect to encounter upon release?

I am a felon and I am barred from the securities industry. My convictions have cost me well over $500k in hard costs, fines, and restitution orders. I expect to work the rest of my life to pay off the costs that were associated with the greed and poor judgment of my early career as a stockbroker. Somehow, I hope to make contributions to society, though I must also find a method to sustain myself. Perhaps I can teach, as I’ve learned lessons that can be of value to others. Still, I do not know the restrictions or stigmas I will encounter as a man released from federal prison. I must also learn to live with the shame that follows me like a shadow.

14. What advice would you provide a business student?

As a young student at USC, I dismissed courses or lectures on ethics. I never expected they would have relevance to me. Yet as I entered the business world, I was constantly confronted with ethical dilemmas. They would have been a dilemma to me at all if I had had a strong core. I would advise business students that an education does not end with a degree. Each individual should recognize the value that comes with a commitment to learning. Taht student should not neglect the importance of ethical lessons, as they are human lessons. I learned mine from the wrong side of prison boundaries. As a consequence, I carry a heavy burden. I advise students to recognize that they must prepare themselves for the challenges and ethical dilemmas of the business world.

15. How do you feel about a Business Ethics class questioning you on your ethics?

I feel a sort of catharsis in writing about the shame that I carry within me. I made some bad decisions, decisions that I would not have thought possible when I was a college student. Talking about my disgrace is like an exercise in expiation. If I were speaking in person, I suppose that those in audiences would cast aspersions at me. As a felon, I will have to learn to live with the disgrace I have brought upon myself. By talking about my ethical lapses, however, I hope that I may help others, and I hope that I may begin the healing process for myself.

Summary:

I found Justin honest and remorseful for his actions. Perhaps his efforts to atone will help him reconcile with his conscience and with society. I welcome reader questions and comments.

The realization in the differences between our lives became more clear to me earlier this week when I was leading a seminar on ethics. Thiry other prisoners were present during the meeting. Many were white collar offenders like me who had been reared in privileged backgrounds. Others, however, had grown up in the poverty of housing projects that were infested with gangs and criminal lifestyles.

Whereas I had enjoyed many opportunities to thrive and make meaningful contributions to the world, those former gang bangers never had a real chance. They were reared without fathers or stability. Guns and violence were as normal to them as baseball was to me. I felt a heavy sense of shame as I listened to their stories and shared mine. I realized that with my background, society had a right to expect more from me.

Upon my release, I intended to devote some time mentoring or providing some leadership guidance to at-risk adolescents. Although we did not share the same background, racial identity, or life experiences, I knew that I could infuse some with hope. Those young people needed a sense of direction. They needed to understand the self-empowerment that could come through education and goals; likewise, they needed to understand how bad decisions could lead to imprisonment and loss.

I had a close friend, Julio Marcial, who built a career around opening opportunities for at-risk adolescents. I trusted that Julio could direct my efforts to contribute. At the moment, my thoughts were to contribute some time each week to homes for troubled youth or to centers that confined them, I could motivate them, guide them, show them steps that would set them on a better path. I had worked as a big brother before, but I felt much better prepared to make meaningful contributions now that I’ve served time in prison.

Some of my fellow white-collar offenders didn’t share my sense of empathy. They told me that I was too hard on myself when I expressed that as a well-educated man with opportunities, I should have been held to a higher standard. My exposure to prison may have been brief, but it has had a profound effect on me. I not only wanted to emerge successfully, I also felt compelled to redeem myself by helping others reach their full potential. I intended to start by helping at-risk adolescents.

Wednesday, March 4, 2009

Life was filled with disappointments. In prison, those disappointments seemed to keep coming. The attitude that worked for me required that I kept focus on the broader perspective, just as I did during that baseball game more than a decade ago. More important than my own dismal stats during that game was the advancement of our team’s efforts.

Today was a disappointing day. I watched the Dow Jones Industrial Average drop to levels not seen since 1997. I knew that millions of americans were losing value in this market, and my own retirement account was being crushed. Yet I had to keep my perspective. Instead of dwelling on what I could not control, I had to find strength and gratitude in the blessings I had. Like the miserable baseball game of so many years ago, current financial conditions were transient. I believed in America, and my experience convinced me to believe in myself.

I had endured more than 300 days of confinement. There was a time when I couldn’t conceive the end. But now I’m in March. The spring is here and in only 77 more days I will walk from the prison boundaries of Taft into the loving embrace of my family and community. My parents are in good helath; my brother and sister-in-law brought my nice into the world; I am 34-years-old and fully capable of thriving in any environment. I’ve often heard the cliche that what doesn’t kill a man makes him stronger. Now I know the meaning of that maxim. Prison has made me stronger.

Those who expect a struggle through the criminal justice system must keep perspective. I learned that lesson, among many others, from this experience. There will be ups and downs and adversity from outside forces we cannot control. Yet we do not control our attitudes. We control the manner in which we respond to all that comes our way. From this experience, I have learned the power that comes from virtues such as tolerance and acceptance. Rather than feeling crippled by adversity, I’ve learned to empower myself with confidence and gratitude. I look forward to sharing these lessons with others.

Tuesday, March 3, 2009

My presentation for the class today is not spontaneous. I take this subject of ethics very seriously, as I know that it was my sliding away from ethics that led to my troubles with the law. As a young man, I felt that I lived with strong core values. Athletics and the strong role models in my life imbued me with an appreciation of right from wrong. As I entered the class of money management, however, I began to compromise my commitment to ethics. That was a mistake with lifelong repercussions.

I am convinced that both academics and human resource departments of corporations need to offer more personal stories on ethical dilemmas of the work place. When I was a student at USC, I never paid attention to abstract concepts. Ethics did not seem like a subject that I needed to learn. At Bear Stearns and UBS, the culture of  Wall Street prevailed. It was not one that placed a strong emphasis on ethics.

The other prisoners who sit in my audience today may have views that differ from mine. Most led careers in business prior to their confinement, and some were officers of publicly traded corporations. I have found that I have a deeper sense of remorse than many of the men with whom I served time — at least that has been my perception. Today I intend to open up. Perhaps together, we can find some ideas that will make a contribution of more effective ethical lessons that students and business professionals may consider.

Clearly, the need for a continuing training in ethics exists. The newspapers publish stories every day about financial scandals. I submit that many of the culprits did not set out to live as criminals. Lapses in ethics, however, led to their demise. Better training may help others. I hope to help.

Monday, March 2, 2009

In cases where the sentences were relatively short, the legislation helped, though it was not monumental. Certainly, my family and I feel thrilled that I will return to quasi freedom six weeks sooner than would have otherwise been the case, though in the bigger picture, six weeks is not life changing. This week, I learned of another prisoner who is receiving much more consideration.

The other prisoners refer to the man as Coach. He has been incarcerated for more than 16 years, and he expected to serve another 24 months before release. Coach is 73-years-old, and he has been serving time for a white-collar offense. He has worked out every day of his sentence, and as a consequence of his exercise, Coach has the build of an athlete in his mid-thirties. I am not exaggerating. He does not have access to weights, but through isometrics, and jerry-built systems on the yard with rocks and sticks, Coach has built massive biceps, a powerful chest, and kept his waist trim with slate-like abdominals. With his full head of hair, a casual glance would suggest Coach is no older than 40.

Despite his physical appearance, Coach is not 40.  He is 73.  Besides his age, Coach has served longer than 10 years, he has completed more than 75 percent of his sentence, and he does not have a history of violence. Taken together, provisions under the Second Chance Act now qualify Coach for release to home confinement. Rather than serving an additional 24 months, Coach’s case manager notified him that he will be releasing to home confinement within the next month. That was a monumental change.

As I contemplated Coach’s release, I realized the absurdity of some of these federal sentences. This was not a subject I would have contemplated had I not lived amidst so many prisoners. Coach was 73-years-old and he had been incarcerated for more than 16 years. It seemed prudent that administrators would release him to home confinement early. What purpose would two more years of confinement serve? Society reaped no further benefit from continuing to inflict the punishment of confinement after so much time had passed.

What I found troubling, however, was that our society continued to lock tens of thousands more offenders in prison despite their having served significant portions of their terms. I didn’t see the point. They could not receive consideration under the new legislation, however, because to qualify for the earlier access to home confinement, the prisoner had to be older than 65; had to have served longer than 10 years; and had to have completed more than 75 percent of the sentence imposed. Very few people would merit consideration under such provisions, and society paid a heavy price because of the lunacy in such laws.

Such was an observation I made in my final 86 days. I felt happy for Coach, but concerned that we needed further prison reforms to improve our system in meaningful ways.

Sunday, February 22, 2009

Those thoughts came to me yesterday, as I was walking back toward my housing unit from the visiting room. My friend Brad had driven up from Los Angeles to visit with me and we enjoyed a wonderful few hours together. He has been a close friend of mine since childhood, and he has been extremely supportive of me throughout my ordeal. While we were visiting, another prisoner introduced me to his wife, and she told me how much she enjoyed reading my blog postings. The day before, I sat for an interview with representatives of a university who wanted to talk with me about my case and my journey through the criminal justice system.

All of that attention, with visits from home, compliments from strangers, interactions with universities, camouflaged the seriousness of my predicament. As I walked back into prison after my visit, however, I realized that I was not some kind of celebrity. I was a felon, a prisoner, a convicted criminal. It was my duty to atone, to redeem the troubles I had caused.

As I thought about the very different status I would have in society upon my release, I understood that these final 87 days I was serving may be the calm before the storm. I feel prepared to navigate my way through the challenges ahead, but new concerns are creeping into my conscience. For the rest of my life, I must accept that others will look at me as if I am a bad example. That stings. It is the shame I have brought upon myself as a consequence of my criminal behavior.

When these anxieties come over me, I feel sobered, as if I no longer have the right to smile, as if I should hold my head down in disgrace. I want so badly to live as a part of society again, to make my parents proud. Will that be possible? I don’t know, and I’m struggling with the likelihood that regardless of what good I strive to do or contribute, I will forever live with the stigmas associated with my criminal conviction. I will be the stockbroker from Bear Stearns and UBS who facilitated a Ponzi scheme.

I was once an athlete, a man who lived with a sense of honor, dignity, and integrity. Knowing that I had forfeited the right to be characterized by such virtues was my real punishment. That knowledge was far worse than the year I was serving in prison, far more substantial than the six-figure costs associated with my crime. People might shake my hand and smile upon greeting me, but what would they say behind my back? “He was in prison,” I presume. For the rest of my life, I would carry this stigma. Like Sisyphus endured, it was punishment without end. I earned it, I suppose.

Saturday, February 21, 2009

I had come into contact with Kelly through my friend Walt Pavlo, who was a leading speaker on the subject of ethics. Kelly and I exchanged a correspondence through which I introduced myself and explained the motivations behind the crimes I had committed as a stock broker with UBS. As an effort of full disclosure, I had sent Kelly all of the legal documents pertaining to my case.

After reviewing my work, Kelly and her students saw some value in gathering more data from me. She accepted the challenge of coordinating authorization from prison administrators at Taft Camp, then arranged a flight out to visit. Kelly was expecting, however, and her doctor advised that with a delivery scheduled for March, it would not be prudent for her to fly. She adjusted by coordinating several of her graduate students and teaching assistants to make the trip in her stead.

This was a real production, and I felt privileged to participate. Karen Chodzicki was a graduate student working toward her MBA, and she served in the capacity of interviewer. Along with Karen were two additional students who served as the film crew. Karen had come with a few pages of questions that she had put together with Kelly and others. Karen was going to lead the interview while the film crew recorded us both. Following her interview with me, Karen and the film crew were driving to Los Angeles in order to interview my mother, Tallie.

With the economic crisis plaguing our country, I understood that both academic and corporate leaders would need to expand the literature on the subject of ethics. I was happy to contribute in any way that seemed appropriate. As a former stockbroker with Bear Stearns and UBS, I had direct experience with the dichotomy that existed between published corporate ethics codes with the actual practices within the corporate culture. As a consequence of the continuous dilemma between ethics and compensation schedules presented in the professional environment of money management, headlines were showing that many in business were making the wrong decision. By exposing my own experiences and describing the humiliation I felt, I hoped to put a human face on the subject and help others make better decisions.

Neither Karen nor I had experience with filming such an interview before, but she was a true professional. While the camera crew was setting up the lighting equipment in a conference room, she chatted amicably with me to set my nerves at ease. She showed me the questions that had been prepared, and I understood at once that I could serve the project best by responding with both honesty and humility. Despite the cameras and attention, this was a project of shame. I had done wrong, used poor discretion, and broken criminal laws. The purpose was to convey my feelings of remorse, what had gone wrong within my sense of morality, and the price that these egregious errors in judgment I had made inflicted upon the victims, my family, and on society. Our objective was not to glamorize my status as a prisoner, but rather to help students and other audience members understand the consequences of ethical slides. I would serve as an example of a business professional who had made bad decisions.

Although I clearly understood that in participating with the interview I was exposing myself to relive the humiliating punishment of my conviction over and over again, I felt a kind of cleansing in telling my story and expressing my remorse. My dear mother would be augmenting the production by describing how my inappropriate actions had hurt her. This was an offer of atonement for me, to redeem my indiscretions by making this contribution to the study of ethics. In describing the prices I was paying for bad decisions, I hoped to provide others with the reasons to stay vigilant in their commitments to lead lives of honesty and integrity, consistent with the principles of good conduct. I felt grateful to Kelly, Karen, and all the others who brought me this opportunity to contribute.

Friday, February 20, 2009