Inside Business | 2013

Published on September 30, 2013 by Bill Cresenzo

From suits to shackles: Former Bank of the Commonwealth executives will soon go to prison

In 2010, Edward Woodard Jr. was living the quintessential high life of a wealthy Norfolk bank president and CEO, complete with $1.4 million in total compensation that year.

In May of this year, Woodard was convicted of 11 federal charges for his role in the collapse of his beloved Bank of the Commonwealth.

By next year, Woodard, 70, will likely begin a markedly different kind of life – one of a federal prison inmate who will make no more than $800 a year.

The same is true for his son, former mortgage lender Brandon Woodard, and for former bank executive Stephen Fields and for Norfolk developer Dwight Etheridge. All face lengthy prison sentences when they appear in U.S. District Court in Norfolk later this month. Edward Woodard is set to be sentenced in November.

The bankers were found guilty last spring of defrauding Bank of the Commonwealth out of more than $70 million through a scheme in which they funneled bad loans to local developers such as Etheridge and hid the losses from the bank’s board of directors and shareholders.

Etheridge was convicted of spending loans meant for construction projects on himself. A jury convicted Edward Woodard of 11 criminal counts and Brandon Woodard on four counts. Fields was convicted of six counts, and Etheridge was convicted of seven counts.

A prosecutor earlier described their sentencing ranges as “off the charts,” so the four men could face years behind bars.

Andrew Sacks, Edward Woodard’s attorney, said his client has been focusing on the case’s legal issues. He said he could not speak to how his client may be preparing for prison.

“It is an individual thing that every inmate is going to have to confront in their own way,” said Chris Burke, a spokesman for the Federal Bureau of Prisons. “It’s going to be an adjustment, that’s for sure.”

Burke said inmates are typically placed within the general inmate population within a couple of hours of their arrival. They go through a month-long orientation program, where “they are given knowledge of what is expected of them and what is available to them,” Burke said.

Once Woodard and the others begin their sentences – likely at a low- or medium-security prison within 500 miles of Hampton Roads – they can expect to live in an environment where they are little more than a number, said Larry Levine, who spent 10 years in federal prison on charges of narcotics trafficking, securities fraud, racketeering, obstruction of justice and possession of automatic weapons.

Levine now owns Wall Street Prison Consultants and American Prison Consultants, Los Angeles firms that advise clients on how to prepare for life behind bars.

“They are going to be in there with a mix of society,” Levine said. “They’ll be with other white collar people. They’ll be there with drug dealers. They’ll be in there with people who are bank robbers. Maybe at one time they were violent people, but they worked their way down [to lower security]. They are going to be around a lot of people who are locked up for child pornography.”

When Levine was convicted, he was immediately sentenced and remanded to custody, unlike Woodard and his co-defendants, who have been free since their convictions in May.

“These are people who know where they are going to go, and what are they thinking about?” Levine said. “They think about their fears: fears about their family, fears of being assaulted. They’ve had time to stew on it.”

And, Levine said, they think about what they can expect. “They can expect to have very little privacy. They can expect shoddy medical care. They can expect to be in a tense, stressful environment where they need to show other inmates the ultimate in respect, because if they don’t, someone is going to put a fist in their mouth or shank them. I don’t care who they are.”

They can also expect monotony.

Forget about what movies like “The Shawshank Redemption” portray, Levine said. Daily life in prison is more like the movie “Groundhog Day,” where every day is like the last and the last day is like the next.

“It’s a daily grind, where everything is the same,” Levine said.

And there are rules, including several major ones, Levine said, that all inmates must follow to survive:

* Never change the TV channel. Levine claims a fellow inmate was stabbed to death for committing that offense.

* Never cut in the phone line. Levine says that he saw someone get his teeth knocked out over this.

* Never reach across another inmate’s food tray. Levine called this the “ultimate in disrespect.”

* Never sit on another inmate’s bunk. Inmates are very possessive of their bunks, which are their only personal space.

* Never “rat out” another inmate. There is nothing worse than to be labeled a “snitch,” because snitches are the most hated inmates in prison, Levine said, along with child molesters.

* Never steal. “It’s OK to be a thief on the outside, but you don’t want to get caught stealing other inmates’ items,” Levine said. “That’s the biggest no no inside. You don’t want to get caught being a rat. They call them ‘cheese eaters,’ because rats eat cheese.

Inmates sleep in dormitories with other inmates. “You have 200 people sleeping and you have snoring and farting and people crying,” Levine said. “Yeah, it’s hard to sleep.”

Inmates rise at about 6:30 a.m. They are awakened by someone on a loud speaker who announces that “the compound is now open.” The inmates then go to the bathroom, the dining hall or the common areas.

They are counted around the clock: at midnight, at 3 a.m., at 5 a.m. at 4 p.m. and 9:30 p.m.

Breakfast consists of oatmeal and fruit, although on weekends, some prisons serve foods like scrambled eggs.

The prison manual from the Federal Correctional Institution Petersburg calls this “brunch.”

A typical lunch might consist of chicken tenders, rice, beans, bread, margarine and an orange, while a typical dinner consists of meatloaf and mashed potatoes. Some prisons also have salad bars.

The quality of the food depends on the food service manager, Levine said. “I’ve been at places where the food is excellent, and I’ve been at other places where I wouldn’t have my dog eat that food,” Levine said. “I wouldn’t feed it to my ex-wife.”

Tattooing, although prohibited, is a popular pastime. So is making hooch, a concoction made of fruit that rots and ferments in a trash bag. The people who make it are called “brew masters,” Levine said.

“If the brew master doesn’t know what he’s doing, that bag is going to explode,” Levine said.

The bankers and Etheridge will have weekly access to the prison commissary, where a Reese’s Peanut Butter Cup costs 85 cents.

The commissary supplies inmates with other food items that spur their culinary creativity.

“These people are ingenious,” Levine said, citing “Saltine Pizza” as an example. Inmates crush crackers and then add a little water to make a dough. They spread the dough on cardboard, let it harden and top it with spaghetti sauce, vegetables stolen from the dining hall, summer sausage and cheese.

They also make a “burrito spread,” a dish of ramen noodles, refried beans and cheese that is popular at going-away parties.

According to the Petersburg prison manual, recreation might consist of arts and crafts, racquetball, running track or lifting weights in an outdoor weight-lifting area.

Inmates wear a standard uniform of khaki pants and khaki shirts, which must be tucked in.

Inmate visitation is tracked by a point system.

In Petersburg, each inmate gets 10 points every month. Weekday visits are one point each, for up to four people at a time. Weekends and holidays are two points per visit per month.

Visitors cannot bring gifts or care packages. Conjugal visits are not allowed.

Levine said the first question his clients ask him is “Am I going to get raped?”

A report from the Department of Justice released in May says that in 2011-12, an estimated 4 percent of state and federal prison inmates reported at least one incident of sexual victimization by another inmate or staffer in the past 12 months or since they were admitted to the facility.

“You do not have to tolerate sexually abusive behavior or pressure to engage in sexual behavior from another inmate or staff member,” the Petersburg prison manual says.

“Carry yourself in a confident manner at all times Do not permit your emotions to be obvious to others. Do not accept gifts. Do not accept an inmate’s offer to be your ‘protector.’ “

Levine said in his 10 years at 11 different prisons, he never witnessed someone get forced into sex.

The former bank executives will be assigned a job, Levine said, such as working in food service, working as a janitor or landscaper, or working in a shop or the prison library as a clerk.

Pay is divided into grades. Grade four pays 12 cents per hour, grade three pays 17 cents per hour, grade two pays 29 cents per hour and grade one pays 40 cents per hour.

Prisons encourage inmates to begin to prepare for their release as soon as they enter the system, Burke said. Prisons offer classes and GED programs, although white collar criminals are not going to need some of those resources, Burke said.

Levine said that it is possible the elder Woodard and his son could end up in the same prison. Three of their other co-defendants have already begun their sentences in separate prisons after testifying for the prosecution.

Norfolk developers Eric Menden, George Hranowskyj and Tommy Arney are serving federal prison sentences of 11.5 years, 14 years and 27 months, respectively.

Menden pleaded guilty to conspiracy to commit wire fraud, making false statements and conspiracy to commit bank fraud.

Hranowskyj pleaded guilty to conspiracy to commit wire fraud and conspiracy to commit bank fraud, while Arney pleaded guilty to three counts: conspiracy to commit bank fraud, making an unlawful monetary transaction and making a false statement on loan documents. Menden is in a low-security federal prison in Petersburg. Hranowskyj is at a low-security prison in Loretto, Pa. Arney is at a minimum-security prison in Morgantown, W.Va.

“These were people in positions of authority and power,” Levine said. “Now they are nobodies. They have to get used to the fact that they have nothing coming. The system doesn’t give a s–t about them. They are going to have to start from the bottom and make their own way.”