The Bill Gates of the Big House
WHY YOU SHOULD CARE
Because tech could help keep inmates from returning to jail.
By Eric Pfeiffer
When tech entrepreneur Ryan Shapiro’s customers want to check their email or download a few MP3s, a strict routine is involved. They head over to a specially designed kiosk where, under watchful eyes, they enter login information, including a special ID number. The kiosk is bolted, to the floor or wall depending on location, and trips there often begin and end at a jail or prison cell. Shapiro’s company is called JPay, and the vast majority of his clientele are behind bars, some of the 2.2 million people incarcerated in the U.S.
Shapiro, a lanky 38-year-old who lives in Miami and speaks with a rapid-fire enthusiasm that fits his background as an online marketing executive, has brought JPay into penal institutions in 34 states, gaining access to about two-thirds of America’s inmates for his growing suite of products. He and his company are controversial or inspired or both, depending on whom you ask. JPay takes its name from his first offering, electronic money transfers allowing inmates to pay prison fees and receive money from people on the outside. Over the past several years, he’s added the secure Internet kiosks and, most recently, a customized-for-prison — that is to say, basically bulletproof — tablet computer, the JP5mini. JPay gets a cut of every transaction made by his captive audience; so do some of the institutions that have invited him in. And business is booming.
It’s all happened fairly fast, which seems apt for a guy who cherishes speed. Shapiro runs a 5:30 mile, sets his daily soundtrack to the beats of electronic music, enjoys the run-and-gun style of his hometown team, the NBA’s Miami Heat, and cites The Innovator’s Dilemma — Clayton Christensen’s treatise on how businesses need to adapt quickly or die — as his ultimate “must-read” book.
Keeping inmates better connected to the outside world means they won’t hit the streets without a support system, Shapiro says.
Prisons are big business in America, driving an economy estimated at $80 billion annually. Other companies sell penal institutions everything from bedding to badges; Shapiro sells them convenience. Profiting from prisoners, though distasteful to plenty of activists, is precisely one of his selling points. “We give them tools to become viable citizens,” the self-described conservative boasts, citing Dostoyevsky for good measure: “The degree of civilization in a society can be judged by entering its prisons.” Keeping inmates better connected to the outside world means they won’t hit the streets without a support system, he says. If he’s right, he could help make a dent in the U.S. recidivism rate, estimated in 2005 at better than 75 percent within five years of release.
Shapiro launched JPay in 2002 after accompanying a friend forced to make weekly commutes to transfer money to his mom, who was incarcerated in Rikers Island. Shapiro was dumbfounded: In the age of PayPal and wireless transfers, it was incredibly inefficient. He began setting up his electronic fund-transfer system. It was a tough sell at first, but his client roster grew quickly. A few years later, Shapiro introduced computer access. Nearly every penal institution has staff dedicated to ensuring no contraband comes in through the mail. His alternative: Go digital through the secure desktop kiosk that inmates can use during scheduled visits for email and video-conference calls and to transfer funds or download music — all, again, for a fee.
His latest venture, the JP5mini, has brought new opportunities and fresh criticism. Some argue that prisoners should not be privileged with high-tech devices; others mistakenly believe taxpayers are footing the bill. In fact, the costs are entirely covered by inmates or their friends and families. The stripped-down 6×4–inch Android tablet, which sells for $70, is encased in rugged clear polyurethane plastic. Testers dropped prototypes from a three-story building to ensure it wouldn’t break — and turned into a weapon. Each tablet is encoded with an inmate’s ID and can be remotely shut down.
JPay is private and hasn’t made its earnings public, but it’s done well enough to hire about 250 employees and now serves jails holding an estimated 1.5 million inmates. It’s also run into trouble in some places, reportedly being hit with fines of more than $400,000 in seven states for licensing violations. Shapiro chalks the fines up to his business falling into a regulatory “gray area” in those states. And there’s that lingering question of whether such services should cost prisoners anything at all. Dianne Tramutola-Lawson of the Colorado branch of Citizens United for Rehabilitation of Errants (CURE) says no. “We’ve gotten the amounts reduced … but some people still think some of these services are too expensive.”
Troy Schulz, deputy warden at the North Dakota State Penitentiary, says prison should be about rehabilitation but adds there’s “skepticism about giving these guys gadgets.” At his prison, access to the JPay kiosk and tablet for inmates like Ryan Baxter is tied to good behavior and limited to those considered low-risk. Baxter says being able to stay in touch with family is key: “It gives them a chance to contact me. They can get me books, job opportunities.”
While debate about his business model continues, Shapiro just keeps moving forward, quickly. He says he’ll have free college coursework available via his tablets before year’s end. His political leanings notwithstanding, he says he was inspired by the Obama administration’s plans to revive federal Pell Grants for inmate education. In the meantime, he’s happy to keep making money — and changing prison culture — in his eyebrow-raising way.
- Eric PfeifferContact Eric Pfeiffer