Prison phone company secretly records attorney-client calls
New York Post 11/11/15
Prison phone company Securus Technologies is no longer a secure investment.
Securus, owned by private equity firm Abry Partners, had its cloud storage system hacked recently, revealing it has apparently recorded 14,000 phone calls between inmates and their lawyers, according to a report.
Prison phone companies can record calls between inmates and their families, but are barred from doing so when lawyers call their clients.
Lawsuits seem likely to follow.
“This could be the nail in the coffin” of Securus, one well-placed source told The Post.
The troubles for the Dallas company were dialed up on Oct. 22 when federal regulators capped at 11 cents a minute the rates prison phone companies can charge.
That is much less than what Securus, which provides telephone service to 2,200 jails, was charging in some states.
The rate cap instituted by the Federal Communications Commission could cut profits at the 29-year-old company by one-third, a source close to the situation said.
Securus, in a lender presentation last April, said it was generating $142 million in Ebitda, while it owed lenders $789 million.
None of its loans become due until 2020.
Securus and Global Tel-Link, also PE-owned, dominate the US prison phone-system industry that serves 2 million people.
Prisons have their own closed systems that connect with outside networks.
Earlier this year, a federal judge in Texas allowed a civil case to proceed against Securus for allegedly recording a call between an inmate and his lawyers .
Bryan Byrne, who has done consulting work for Securus and owns Mesh Detect, a maker of cellular phones for prisoners, said the question arising from the hack is whether it is the fault of the prisons or Securus.
Under normal procedures, prisoners give their warden a list of about 10 names and numbers. They are allowed to call the people on the list.
If a lawyer is on the list and is called, the recording system should be turned off, Byrne said.
“If they have a system problem, that’s huge,” he added.
Byrne said Securus put itself at greater risk about a decade ago when it moved hard drives and recording devices at each facility to centralized cloud-data collection.
“Your exposure is limited when it is localized,” Byrne said. “Why did they move to a centralized database? Cost and efficiency.”
Abry Partners did not return calls.