'He hurt a lot of people': Embezzler from Belleville now held in West Va. prison

News-DemocratDecember 28, 2013 

AP

James Gibson, who embezzled more than $83 million from orphans and the disabled, was sent to the toughest federal prison in the country where he landed in a cell not far from Ted Kaczynski, the notorious "Unabomber."

That was in 2005 after Gibson was sentenced in federal court in East St. Louis to serve 40 years. Kaczynski is still in the extremely restrictive, "Supermax" Florence, Colo., Administrative Maximum Facility, or ADX.

But Gibson, 69, a former Belleville wannabe supermarket mogul, described by his sentencing judge as "... nothing more than a flim-flam man of the first degree," experienced Christmas this year in the relatively relaxed setting of a West Virginia medium security federal lockup.

Gibson got out of the Colorado Supermax in December 2011 after serving about six years in the tough facility, where inmates are not allowed to glimpse even a small section of their outside surroundings except for an interior courtyard. It is thought that in this way they cannot learn their exact whereabouts in the prison, thus making escape impossible. They spend 23 hours a day in their cells.

After leaving the ADX, Gibson, who still owes his victims about $20 million, according to court documents, was transferred in December 2011 first to the maximum security federal prison in McCreary, Ky., and then in February of this year to a medium security prison also in Kentucky in Manchester.

In June, he was transferred again, this time to the medium security federal prison in Beckley, W.Va., where, according to the inmate handbook, numerous recreational and educational opportunities exist, even for an inmate who deprived many of the most vulnerable of their only means of support.

"The goal is to place inmates in progressively less and less restrictive confinement as security warrants," said Ed Ross, a Bureau of Prisons spokesman based in Washington, D.C.

Victim speaks

There were about 150 victims in the case. Most were from the metro-east, including Terry Erthal.

"He hurt a lot of people," said Erthal, who lost $400,000 from a disability settlement for a back injury. Erthal, 55, of Jerseyville, said he has received partial repayment but declined to name a specific amount.

While Erthal said he is not bitter toward Gibson, he added, "I don't think he should be living his life in any luxury."

The Bureau of Prisons will not release specific information about what prompts an inmate transfer, which can occur for medical reasons. For non-violent federal inmates, many are transferred to minimum security when they have fewer than 10 years remaining on their sentence.

During sentencing, victims of Gibson's fraud scheme showed up in wheelchairs and on crutches. Besides luxuries for himself, Gibson used their money to pay for a risky investment gamble and bought 23 National Supermarkets but failed to make them successful.

Gibson was convicted of misusing money entrusted to him to invest. Court records show that he spent some of the money on himself including $425,000 for a 67-foot yacht, the Emerald Isle, on which he traveled to the Central American country of Belize, where he was arrested in 2001 and turned over to the FBI.

About $60 million of the embezzled money was collected by the government, refunded by several banks involved in the financing and from a $16 million federal fine against a financial consulting firm, court record shows. Some victims received full refunds, but $20 million is still owed.

Prison life

Gibson, whose release date isn't until 2039 when he would be 91, has a number of options and advantages at Beckley. He wears khakis instead of a shapeless jumpsuit. He can spend up to $340 a month in the prison commissary. He can work at various prison jobs, but must forfeit $25 every three months from his prison pay to pay down that $20 million owed to his victims. At that rate, it will take about 200,000 years to pay it off.

Unlike the grim Colorado supermax he once called home, the lockup at Beckley features a large exercise yard with a view.

There are numerous education programs including courses on how to read blueprints, carpentry, computer applications, masonry and appliance repair.

Organized sports leagues are part of the Beckley program where Gibson can play softball, flag football, basketball, soccer and volleyball.

Gibson can choose any number of hobbies including drawing, painting, leatherwork and ceramics. Finally, he can learn how to play the guitar, piano or drums.

Visits are three days a week and up to five people can come at one time.

While he awaits his release date, approximately 25 years from now, Gibson, according to a court document, was still fighting for his cash and property. In April 2011, while in Florence, Colo., he filed an "Exemption Claim" allowed under federal law, asking that $6,250 in belongings be held out from the auction intended to help his victims.

This included a $500 gold watch and a $500 gold ring and $5,160 in cash. In his own writing, Gibson also listed, "Furniture, crystal, rugs, silver and china," estimated to have a value of $500,000."

He ended his exemption request by writing, "I do not owe $20 million. I want a complete accounting..."

But court records show that the cash was applied to Gibson's debt and the items were put up for sale.

Contact George Pawlaczyk at gpawlaczyk@bnd.com or 239-2625.

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