How did prison inmate allegedly pull off elaborate prison scam?
BOISE, Idaho (AP) - It's clear that Mark Brown is a smart guy, maybe even borderline brilliant.
But what's astounding is the way prosecutors say he apparently pulled off a major, years long financial fraud, taking in big corporations, courts and attorneys across the nation, all from behind bars in an Idaho prison cell.
Investigators believe he used a cherished electric typewriter that he was allowed to keep in his small, spare cell, and legal ads found in national newspapers including the Wall Street Journal and USA Today, to make fraudulent claims in big class-action lawsuits and bankruptcies.
He's alleged to have typed up professional-looking legal documents, false letters from law firms and more, and made skillful use of the "legal mail" exception for inmates that allows for correspondence with attorneys and judges without review from prison staff. Big checks poured in - Brown's take in multiparty lawsuits including a $70 million GlaxoSmithKline drug-pricing settlement and a $20 million IBM shareholders' settlement.
Authorities say Brown collected close to $64,000 through those settlements and deposited the money in his prison trust account, which inmates can use for things like commissary purchases. He then transferred much of it out to an investment account that authorities have targeted for potential forfeiture.
Brown is now facing a 12-count federal indictment for mail fraud and awaiting a September trial.
The story of how Brown went from 23-year-old University of Idaho computer science student to 53-year-old inmate suspected of perpetrating one of the most inventive prison scams ever discovered is a tale of habitual crime, long sentences, mental illness and lack of treatment. Before he'd turned 18, he'd committed 13 burglaries, according to court documents, including one at a U.S. post office. He faced other struggles, including a suicide attempt, an escape from a juvenile detention center and temporary placement in a foster home. By 1982, he'd been involved in 60 known thefts and burglaries.
He enrolled at the University of Idaho in the spring of 1978 to work toward a computer science degree and excelled there. But at night, he broke into university buildings, homes and businesses, hiding away his loot. He was on felony probation in 1982 when a search of his university dorm room turned up piles of stolen property, from computer components and other electronics to jewelry. Brown was diagnosed with kleptomania and borderline personality disorder. In a 20-minute, tearful statement to the court, he pleaded for leniency as the judge pondered a 20-year prison sentence.
"I'm not saying I don't need to be locked up," the young defendant told the court, as the Lewiston Tribune reported at the time. "If that's what needs to be done to keep me from stealing, then that's what I wish. At the same time, I feel I need something else. I honestly feel that the things I've done stem from things I was never in control of."
Brown got out on parole in 1994, but by then, he was a 35-year-old with a long list of disciplinary violations in prison. He'd broken rules, stolen items and forged purchase orders at his job at Correctional Industries. Brown found work at Terry Rich's company, Applied Process Controls, doing technical support for industrial instrumentation controls.
"He adapted very quickly to any circumstance you could put him in, whether it was a conference room of Idaho Power engineers, anything," Rich recalled. "He was great on the phones."
Then, a few months later, Rich got a call in the middle of the night from Boise police detectives. "They said, 'Does Mark Brown work for you?' and I said yes. And they said, 'Well, not any longer, because he's going back to prison.'"
Eight days after a state parole office in east Boise had been torched, silent alarms were tripped at another Department of Correction office in west Boise. Police found a broken window and an oily liquid spread across computers and other equipment; moments later, outside, Brown sped around the corner in his two-tone 1978 Volkswagen bus. Officers gave chase and cornered him in an alley behind a grocery store; in the bus were a baseball bat with fragments of glass on it, a gas can, gloves, a flashlight, and a puddle of the oily liquid.
Brown was arrested and his apartment searched; it was full of stolen property, including lots and lots of computer equipment, along with exotic birds in cages and other items that were tied to a string of business burglaries in Boise. He was sentenced to serve up to 116 years in prison.
"I went and visited him at the Ada County Jail before he went back to prison," Rich said. "I said, 'Mark, why would you do this? I trusted you, gave you a chance to really start your life over again - this is what you do?'?"
Rich was looking at Brown through the glass in the jail's visiting area; Brown was emotionless, he said. "He just sort of shook his head. He told me he was a career criminal. He told me, 'This is what I do.'?"
It's unclear exactly when Brown obtained the electric typewriter that investigators believe he used in the fraud scheme and carried with him from one prison to the next.
According to his federal indictment, Brown's securities and bankruptcy fraud scheme started in September 2007. That was the same month he was transferred to the North Fork Correctional Facility in Sayre, Okla., a private prison run by Corrections Corp. of America, as Idaho shipped hundreds of inmates out of state due to crowding. Brown stayed there two years, before being returned to the CCA-run Idaho Correctional Center south of Boise.
On Aug. 28, 2009, a search of Brown's cell at ICC turned up curious items: numerous typewritten letters from various nonexistent law firms "purporting to provide proof of Brown's purchase of various stocks or interest in various settlements," from IBM corporate securities litigation to NovaStar Financial Inc. securities litigation. CCA officials placed Brown in segregation for five days, reclassified him to medium security and notified the Ada County Sheriff's Department that they had a case of apparent mail fraud by an inmate. He also lost commissary privileges for 45 days.
Nearly two years later, on Oct. 31, 2011, Brown was transferred to the state prison in Orofino. He brought along his typewriter; officials there weren't told of the alleged fraud.
In March 2012, a mail room officer mentioned to Cpl. Wesley Heckathorn, a guard at the Orofino prison and a former investigator for the U.S. Navy, that Brown seemed to be receiving "a large amount of mail that's marked 'legal mail.'?"
Legal mail is handled differently than other mail in prisons, which is routinely screened by prison authorities. Inmates are allowed to correspond with their attorneys and the courts to conduct appeals or address other legal matters without such screening.
The volume of legal mail "struck me as odd," Heckathorn said; he figured such a long-term inmate likely was past the appeals period.
Heckathorn reported the matter to the warden and other prison authorities, who authorized him to start screening the correspondence. "From March to July, I just kind of covertly monitored all of his phone calls, I was looking at his mail, I was watching his finances, kind of collecting data," Heckathorn said. "In July, I had enough data to indicate that a crime was likely being committed."
In July 2012, Heckathorn and the prison sent a report to the FBI, which began investigating. In August, a publishing company called him to say Brown had filed a fraudulent claim in the company's bankruptcy litigation.
A federal grand jury indicted Brown on charges of mail fraud, and a trial is tentatively set to begin in September in U.S. District Court. Much of the nearly $64,000 that authorities believe he received through the prison fraud scheme was transferred to an investment account now targeted for potential forfeiture.
Information from: The Spokesman-Review