Federal Prisoners Hold Millions in Accounts Shielded From Scrutiny and Debt Collection

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 Federal prison inmates are keeping large sums of money — in some cases more than $100,000 each — in government-run deposit accounts effectively shielded from court orders for things like child support, alimony or other debts, and not subject to the same scrutiny as accounts owned by non-incarcerated citizens, reports the Washington Post. Within the Bureau of Prisons system, there are more than 20 inmate accounts holding more than $100,000 each for a total exceeding $3 million. In all, the combined value of such inmate accounts recently topped $100 million. Law enforcement officials from other agencies say the program poses significant risks for abuse, money laundering and corruption. The Bureau of Prisons has for years resisted efforts to change the program because its leaders maintain they are already diligent about making inmates pay what they owe. However, authorities typically have to go to federal court to try to force inmates to pay what they owe to crime victims and to settle other debts.

Under the Bank Secrecy Act, everyday account holders who move more than $10,000 in cash can be flagged with a suspicious activity report, potentially prompting an investigation, but that law does not apply to the Bureau of Prisons, because even with $100 million in accounts, the agency is not considered a financial institution. The problem has only gotten worse during the pandemic because the overall value of those accounts has ballooned in recent months as covid relief payments made their way to inmates in $600, $1,200 or $1,400 increments. By late May, the U.S. Treasury had sent 37,852 checks totaling more than $38 million to federal inmates. It’s not clear exactly how many of the 129,000 inmates in the federal system received such a payment, but it’s believed to be more than 22,000. Law enforcement officials worry that so much money in the system is an invitation not just to criminal activity outside prison but within it, as more inmates have the means to bribe their guards.

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