"Madoff" bill would charge rich NY inmates for jail

NEW YORK Mon Jul 20, 2009 6:40pm EDT

Prisoners place their hands on a wall as they are brought to jail by Orange County sheriff's deputies in Fullerton, California, June 23, 2009. REUTERS/Lucy Nicholson

Prisoners place their hands on a wall as they are brought to jail by Orange County sheriff's deputies in Fullerton, California, June 23, 2009.

Credit: Reuters/Lucy Nicholson

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NEW YORK (Reuters) - For anyone who believes crime doesn't pay, tell that to the New York state legislator who introduced a "Madoff" bill on Monday. Rich New Yorkers convicted of crimes would be forced -- if his bill becomes law -- to pay the state and federal governments for how much it costs to keep them in jail.

The bill's moniker is a nod to Bernard Madoff, who began serving a 150-year prison sentence last week in a federal prison in North Carolina for running a Ponzi scheme considered to be Wall Street's biggest investment fraud. Before his arrest in December, Madoff had lived a life of luxury with a Park Avenue penthouse apartment and luxury homes in other glamorous locales, as well as yachts, designer clothes and collectible watches with eye-popping price tags.

"Far too often, taxpayers are stuck with the bill for criminals who have extensive personal wealth waiting for them once they are discharged from our state's penal system," Republican Assemblyman Jim Tedisco said in a statement.

Like many states, New York has looked at various ways of driving drive down the cost of keeping people in jail.

NEW YORK ON $90 A DAY

The state comptroller, Thomas DiNapoli, a Democrat, estimated in 2007 that it costs the counties around $1 billion a year, based on daily costs of $80 to $90 a day for each inmate.

Though federal prosecutors sought to strip Madoff of all of his assets before he went to prison, Tedisco told Reuters that his bill would force drug dealers and other high-profile people who serve jail time to pay for their prison upkeep.

If such a law had been in effect at the time, it could have targeted such wealthy inmates as Martha Stewart, the lifestyle guru who was sentenced to five months in prison in 2004 for lying to investigators about a stock trade, and Leona Helmsley, the high-end hotelier who was sentenced to prison in 1989 for tax evasion. Helmsley's prison sentence was reduced to four years, but she only served about a year and a half.

Tedisco said the need for his bill was demonstrated by "an incident in lower Manhattan's Tombs prison," a reference to an inmate's costly bar mitzvah that Mayor Michael Bloomberg has said the city is investigating.

A sliding scale would determine how much convicts would have to pay, based on their assets, under Tedisco's bill. Those who are worth $200,000 or more would pay the entire tab, while those whose net worth is $40,000 or less would pay nothing.

Convicts' homes "or any equity found in it" would not be counted in determining their assets nor would their mortgage payments, tax bills or payments for child or spousal support, Tedisco said. The idea, Tedisco said, is not to punish the convict's family, and in particular, it is not meant to deprive an inmate's children of a home or parental support.

( Editing by Jan Paschal)

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