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Jail in a Gilded Cage: Forced Labor Case Raises Doubts Over Home Imprisonment

Zhong, 47, a former Chinese diplomat and legal U.S. resident, is accused of forcing immigrants to work on construction projects.
Image: The home of Dan Zhong is seen in Livingston, N.J., Jan. 5, 2017.
The home of Dan Zhong is seen in Livingston, N.J., Jan. 5, 2017. Zhong, a businessman imprisoned on charges that he forced immigrant laborers to do construction at Chinese diplomatic facilities in the U.S., wants permission to turn his New Jersey home into a private jail where he can comfortably await trial.Mel Evans / AP

NEW YORK — Dan Zhong's two-story home in Livingston, New Jersey, is unremarkable by suburban standards, but the businessman's lawyers have told a judge he is willing to pay $144,000 per month to turn the place into a private jail where he can comfortably await trial on charges he exploited immigrant Chinese laborers.

His proposal is the latest example of wealthy people facing potentially long prison terms who have asked to finance their own, extravagant house arrests, highlighting inequities between them and defendants of lesser means who languish behind bars and spawning a cottage industry of former federal agents and police officers working as private guards.

Zhong, 47, a former Chinese diplomat and legal U.S. resident, is accused of forcing immigrants to work on construction projects at Chinese diplomatic facilities in the U.S.

Image: The Metropolitan Detention Center (MDC) in the Brooklyn borough of New York, Jan. 8, 2017.
The Metropolitan Detention Center (MDC) in the Brooklyn borough of New York, Jan. 8, 2017. Dan Zhong, a businessman imprisoned on charges he forced immigrant laborers to do construction at Chinese diplomatic facilities in the U.S., wants to turn his New Jersey home into a private jail where he can comfortably await trial. For now Zhong is a prisoner at the MDC.Kathy Willens / AP

For now, he's a prisoner at the fortress-like Metropolitan Detention Center in Brooklyn. But he has resources other prisoners don't. His uncle is a Chinese billionaire, Wang Wenliang, who has drawn scrutiny over his large donations to American political campaigns and nonprofits like the Clinton Foundation.

Hiring a security firm to ensure Zhong doesn't flee the property "is a very, very expensive proposition," defense attorney Thomas Fitzpatrick said at a hearing late last year. "His family in China is willing to spend that money to get him out of the MDC."

Prosecutors so far have won the fight to deny Zhong release on $10 million bail, in part by arguing that his finances are too murky. Another hearing is scheduled for Monday.

"The relatives in China have a lot of money at their disposal. A $10 million bond? They'd probably laugh it off, right?"

If a judge approved the scheme, Zhong would join a short but notable list of loaded defendants who turned their New York-area homes into a gilded cage.

Ponzi scheme mastermind Bernard Madoff was released on $10 million bail and allowed to live in his $7 million Manhattan apartment before he was sentenced to a 150-year prison term in 2009.

Former International Monetary Fund leader Dominique Strauss-Kahn posted $5 million bail so he could stay, under guard, in his Manhattan townhouse in 2011 until charges accusing him of sexually assaulting a hotel maid were dropped.

More recently, a judge released Chinese billionaire Ng Lap Seng on $50 million bail so he could live in his $4 million Manhattan apartment, under 24-hour watch by two $200-per-hour security guards, while awaiting trial in a bribery case involving the United Nations.

Other judges have been less hospitable.

Last year, U.S. District Judge Richard Berman denied a $50 million private-jail bail bid by gold trader Reza Zarrab, who is charged with violating U.S. sanctions on Iran. Berman called it "unreasonable because it helps to foster inequity and unequal treatment in favor of a very small cohort of criminal defendants who are extremely wealthy."

Image: The home of Dan Zhong is seen in Livingston, N.J., Jan. 5, 2017.
The home of Dan Zhong is seen in Livingston, N.J., Jan. 5, 2017. Zhong, a businessman imprisoned on charges that he forced immigrant laborers to do construction at Chinese diplomatic facilities in the U.S., wants permission to turn his New Jersey home into a private jail where he can comfortably await trial.Mel Evans / AP

Another federal judge in Brooklyn, Nicholas Garaufis, grew disdainful last year when Jacob "Kobi" Alexander, a former technology firm CEO who spent 10 years on the lam in Africa, unsuccessfully sought release on $25 million bail in a securities fraud case.

"Spare me. I wasn't born yesterday," the judge said.

A letter from Guidepost Solutions, a firm headed by former federal prosecutors, lays out the strict conditions for guarding Zhong, including installing alarms, sensors and cameras at his home and instructing his guards to take cellphones from any visitors — and even use "reasonable force" to keep him from fleeing.

But prosecutors in the U.N. bribery case have questioned Guidepost's resolve in their contract to secure Ng. In court papers, they complained the defendant was visited by a masseuse 16 times and was allowed to pick up meals at his favorite restaurant in Chinatown.

"His family in China is willing to spend that money to get him out of the MDC."

Before his arrest, Zhong ran a business affiliated with China Rilin Construction Group, owned by his uncle, Wenliang Wang.

Wang has made large donations to Virginia Gov. Terry McAuliffe. One of his companies, based in New Jersey, gave $70,000 to the Democrat's gubernatorial campaign and $50,000 to his inaugural committee in 2013, according to campaign finance records.

Rilin also gave at least $1 million to the Clinton Foundation, according to the foundation.

McAuliffe's dealings with Wang touched off a federal probe that the governor's lawyer has said found no wrongdoing. Wang also was among dozens of members of China's legislature expelled last year in a vote-buying scandal.

In a past ruling denying Zhang bail, Magistrate Judge Ramon Reyes suggested that in dealing with the super-rich, even bails in the tens of millions that could be forfeited to the government don't dampen the incentive to flee.

"The relatives in China have a lot of money at their disposal," he said. "A $10 million bond? They'd probably laugh it off, right?"

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