Criminal Justice & Prison Reform

Hassan Nemazee’s Perspective on
The Financial Trap of Life After Prison

We talk endlessly about criminal justice and prison reform in the United States, but policymakers rarely examine the financial rules designed to guarantee failure for those exiting the system.

When individuals leave federal prison, they face an economic trap. True reform requires holding the private sector and government bureaucracies accountable for the financial barriers they create.

Hassan Nemazee knows this system from the inside out.

For decades, he operated in international finance and presidential politics. Then, he served nine years of a 12-year federal prison sentence for bank fraud, followed by three years of supervised release.

He experienced firsthand how financial mandates make successful re-entry nearly impossible.

Hassan Nemazee relaxing on a park bench in the middle of Central Park, New York City. He is an Iranian-American author, speaker, and activist for prison reform in the United States.

“This is an issue that can be addressed by the private sector. It does not need legislation that needs to be passed by both parties and signed by the president. It requires the private sector, the banking sector, to essentially do what they talk about doing but then don’t connect the dots.” – Hassan Nemazee

To truly reduce recidivism, society must fix the economic realities of re-entry: access to banking, the weight of court-ordered restitution, and the need for holistic community support.

Located at 630 Riverside Dr., NYC., St. Walburga's Academy, currently Fortune Society Academy, is used as part of a re-entry program for former prison inmates.

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Wage garnishment as part of court-ordered restitution, stacked on top of overdue bills and payments, displaying the financial challenges of financial stability after prison.

Why Court-Ordered Restitution Guarantees Financial Ruin for Ex-Felons

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Banks like the one shown, often blacklist former felons from opening bank accounts.

The Banking Blacklist: How Corporate Compliance Traps Former Felons

If you ask the average person why an individual with a criminal record cannot open a checking account, they will likely assume it is against the law. It isn't. The financial exile of formerly incarcerated people is driven entirely by the private…

1. The Banking Blacklist

You cannot function in modern society without a bank account. Yet, millions of people with a felony on their record are automatically denied basic checking accounts. This is a discretionary compliance decision made by banks under “Know Your Client” (KYC) policies.

When banks refuse to open accounts for former felons, they force them to operate exclusively in cash. This creates immediate crises:

  • Employment: Most employers pay via direct deposit. Without a bank account, securing legitimate work is nearly impossible.
  • Housing: Landlords require background checks and electronic rent payments or certified funds.
  • Safety: People forced to use cash become visible targets for robbery because they must carry their entire net worth in their pockets.

“In essence, denying a bank account traps an ex-felon in a cycle of high fees, insecurity, and illegitimacy.” – Hassan Nemazee

There is a glaring hypocrisy in the corporate banking sector. Institutions like JPMorgan Chase have publicly committed to hiring former felons, aiming for them to make up roughly 10% of their annual hires. Yet, their compliance departments simultaneously use KYC rules to close the bank accounts of those exact same people.

2. The Restitution Trap

Financial restitution is intended to compensate victims, but in practice, it worsens poverty. It drains the exact funds recently released individuals need for housing, transportation, and child support.

The restitution system creates manufactured hurdles that compete directly with a person’s ability to survive legally:

  • Aggressive Garnishment: Courts routinely garnish a massive percentage of a person’s income. In Nemazee’s own case, the courts garnished 15% of his gross, pre-tax salary.
  • The 20-Year Tail: A restitution obligation does not run concurrently with a prison sentence. The 20-year clock only begins after the completion of the prison sentence and probation.
  • Archaic Payment Methods: In jurisdictions like the Southern District of New York, individuals cannot wire payments. They must take time off work and pay fees to obtain physical cashier’s checks.
  • Parole Risks: If an individual cannot afford their restitution, their parole officer can treat it as a supervision violation, exposing them to warrants and re-incarceration.

3. The Blueprint for Re-entry

We do not have to guess how to lower recidivism. Founded in 1967, The Fortune Society in New York provides a proven model for successful reintegration.

Instead of leaving individuals to navigate a maze of fragmented agencies, The Fortune Society uses a holistic model to provide interconnected services in one centralized place:

  • Transitional Housing: Facilities like the Fortune Academy (the Castle) in West Harlem provide safe, stable apartments for people immediately exiting prison.
  • Job Training: Programs dedicated to helping participants obtain high school equivalency diplomas and prepare for the workforce.
  • Health & Benefits: Immediate access to mental health counseling, substance use treatment, and assistance securing SNAP and Medicaid.

When you give people stable housing and holistic support, they succeed. Stanley Richards entered The Fortune Society as a client after serving time at Rikers Island. He eventually became the organization’s CEO and was recently appointed to serve as the Commissioner of Corrections for New York City.

Discover the
Full Story

To understand the realities of the criminal justice system, you have to see it from the inside. In Persia, Politics & Prison: A Life in Three Parts, Hassan Nemazee details his journey from international finance to a federal prison cell and his fight for systemic prison reform.

Order the Memoir (English) Buy the Book (Persian)
Persia, Politics, & Prison by Iranian-American author, Hassan Nemazee. Prison reform book based on the author’s first-hand experience.

Frequently Asked Questions
on U.S. Prison Reform

A.1. Banks frequently deny or close accounts of individuals with felony records citing internal “Know Your Client” (KYC) compliance policies. Banks often apply this as a blanket ban against anyone with a record, forcing individuals into a high-risk, cash-only economy.

A.2. Financial restitution drains the money recently released individuals need for core re-entry costs like housing, food, and child support. Furthermore, failure to pay restitution is often treated as a supervision or parole violation, which can lead directly to re-incarceration.

A.3. A holistic re-entry program, such as the model utilized by The Fortune Society, addresses the interconnected challenges of leaving prison by offering multiple services under one roof. This includes providing transitional housing, job training, mental health counseling, and benefits assistance simultaneously.

A.4. Yes. In the federal system, a portion of an incarcerated person’s commissary account—often between $25 and $100 a month—is regularly seized to pay towards their restitution. The mandatory 20-year timeline for repaying the remaining debt does not even begin until after they are fully released from prison and probation.

A.5. The government typically seizes a person’s assets to sell them and repay the victims of the crime. This includes cash, homes, cars, and business interests. However, the government often refuses to provide an accounting of those sales, leaving individuals with massive remaining restitution debts