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Paul Alec Bilzerian (born 1950) is an American army veteran, businessman, corporate
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast to the acquisi ...
specialist, and felon. Bilzerian was the chairman and chief executive officer of
Singer Corporation Singer Corporation is an American manufacturer of consumer sewing machines, first established as I. M. Singer & Co. in 1851 by Isaac Singer, Isaac M. Singer with New York lawyer Edward Cabot Clark, Edward C. Clark. Best known for its sewing mac ...
for two years, while he owned a controlling stake. In 1989, he was convicted on nine counts of federal crimes, including
criminal conspiracy In criminal law, a conspiracy is an agreement between two or more people to commit a crime at some time in the future. Criminal law in some countries or for some conspiracies may require that at least one overt act be undertaken in furtherance ...
,
making false statements Making false statements () is the common name for the United States federal process crime laid out in Section 1001 of Title 18 of the United States Code, which generally prohibits knowingly and willfully making false or fraudulent statements, or ...
,
securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.tax fraud Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trust (property), trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax au ...
, and
securities law Securities regulation in the United States is the field of U.S. law that covers transactions and other dealings with securities. The term is usually understood to include both federal and state-level regulation by governmental regulatory agencie ...
violations, and sentenced to four years in prison and a fine of $1.5 million. He also lost a civil lawsuit to the SEC. In 2024 the ''Wall Street Journal'' reported that Bilzerian had "been on the run from the Securities and Exchange Commission for so long 1 yearsthat he now owes the agency $180 million with interest."


Early life, education and family

Bilzerian was born in
Miami, Florida Miami is a East Coast of the United States, coastal city in the U.S. state of Florida and the county seat of Miami-Dade County, Florida, Miami-Dade County in South Florida. It is the core of the Miami metropolitan area, which, with a populat ...
but grew up in
Worcester, Massachusetts Worcester ( , ) is the List of municipalities in Massachusetts, second-most populous city in the U.S. state of Massachusetts and the list of United States cities by population, 113th most populous city in the United States. Named after Worcester ...
in an Armenian American family. His father, Oscar, a civil servant, and his mother divorced while he was in high school. Called into the principal's office of his high school one day in his senior year in September 1968 for violating the dress code by wearing blue jeans, Bilzerian responded by dropping out of school. He would later describe himself as a "juvenile delinquent". Starting in December 1968 Bilzerian served—ultimately as
first lieutenant First lieutenant is a commissioned officer military rank in many armed forces; in some forces, it is an appointment. The rank of lieutenant has different meanings in different military formations, but in most forces it is sub-divided into a se ...
—in the
United States Army Signal Corps The United States Army Signal Corps (USASC) is a branch of the United States Army responsible for creating and managing Military communications, communications and information systems for the command and control of combined arms forces. It was ...
, passed a high school equivalency exam, and was deployed for a year during the
Vietnam War The Vietnam War (1 November 1955 – 30 April 1975) was an armed conflict in Vietnam, Laos, and Cambodia fought between North Vietnam (Democratic Republic of Vietnam) and South Vietnam (Republic of Vietnam) and their allies. North Vietnam w ...
during which time he set up telephone systems, and earned a
Bronze Star Medal The Bronze Star Medal (BSM) is a Awards and decorations of the United States Armed Forces, United States Armed Forces decoration awarded to members of the United States Armed Forces for either heroic achievement, heroic service, meritorious a ...
. He first attended small
Clark University Clark University is a private research university in Worcester, Massachusetts, United States. Founded in 1887 with a large endowment from its namesake Jonas Gilman Clark, a prominent businessman, Clark was one of the first modern research uni ...
in Worcester, then earned a Bachelor of Arts degree from
Stanford University Leland Stanford Junior University, commonly referred to as Stanford University, is a Private university, private research university in Stanford, California, United States. It was founded in 1885 by railroad magnate Leland Stanford (the eighth ...
in 1975, and a Master of Business Administration degree from
Harvard Business School Harvard Business School (HBS) is the graduate school, graduate business school of Harvard University, a Private university, private Ivy League research university. Located in Allston, Massachusetts, HBS owns Harvard Business Publishing, which p ...
in 1977. He then worked briefly in the treasurer's office of forest products company
Crown Zellerbach Corporation Crown Zellerbach was an American Pulp and paper industry, pulp and paper conglomerate based in San Francisco, California, purchased in a Takeover#Hostile, hostile takeover in 1985. Most of its pulp and paper assets were sold to James River ...
in San Francisco, assessing merger opportunities. Bilzerian married Stanford classmate Terri L. Steffen in 1978, and moved with her to
St. Petersburg, Florida St. Petersburg is a city in Pinellas County, Florida, United States. As of the 2020 census, the population was 258,308, making it the List of municipalities in Florida, fifth-most populous city in Florida and the most populous city in the sta ...
. Bilzerian has two sons,
Adam Adam is the name given in Genesis 1–5 to the first human. Adam is the first human-being aware of God, and features as such in various belief systems (including Judaism, Christianity, Gnosticism and Islam). According to Christianity, Adam ...
and
Dan Bilzerian Daniel Brandon Bilzerian (born December 7, 1980) is an American businessman and influencer. He gained notability for his extravagant lifestyle and photo ops with scantily dressed female models on social media. The eldest son of businessman Pa ...
. Both went on to careers as professional poker players.


Career

One of Bilzerian's first business deals was a 1978 investment in a
Tampa Bay Tampa Bay is a large natural harbor and shallow estuary connected to the Gulf of Mexico on the west-central coast of Florida, comprising Hillsborough Bay, McKay Bay, Old Tampa Bay, Middle Tampa Bay, and Lower Tampa Bay. The largest freshwater i ...
-area radio station, WPLP. He made it, having borrowed money from his father-in-law, with two Army colleagues from the Vietnam War who had experience in the broadcasting industry. While the radio station had been breaking even when they bought it, it lost $1.4 million in their first year, and he was removed from the board and fired. The station’s performance deteriorated further, it filed for bankruptcy in 1980, and lawsuits were filed by Bilzerian and his former partners against each other. Bilzerian then joined his father-in-law Harry in the real estate business in 1979, working on shopping center deals in Florida. His real estate investments were highly successful. In 1984, he moved to
Sacramento, California Sacramento ( or ; ; ) is the List of capitals in the United States, capital city of the U.S. state of California and the county seat, seat of Sacramento County, California, Sacramento County. Located at the confluence of the Sacramento Rive ...
where his father-in-law and another business associate lived.


Corporate takeover attempts

In August 1985 Bilzerian embarked on his first two high-profile, though unsuccessful, takeover attempts, one of New York clothing manufacturer
Cluett Peabody & Company Cluett, Peabody & Company, Inc. once headquartered in Troy, New York, was a longtime manufacturer of shirts, detachable shirt cuffs and collars, and related apparel. It is best known for its Arrow brand collars and shirts and the related Arrow C ...
, and the other of Pittsburgh construction company H. H. Robertson. He and partner William Brodovsky, owning 9.9% of the company, offered to buy Cluett for $336 million, for $40 a share, half in cash and half in debt securities, but Cluett's chairman and chief executive responded that "management and the entire board of directors have absolutely no interest in pursuing your proposal." Two weeks later Cluett announced that it had adopted a
shareholder rights plan A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover. In the field of mergers and acquisitions, shareholder rights plans were devised in the e ...
to prevent takeovers financed by the company's borrowing capacity or the sale of the company's assets. After Bilzerian purchased a large stake and raised his bid for the remaining 76% of Cluett Peabody in October, Cluett's adoption of a poison pill led to public criticism of them by Bilzerian. Cluett eventually accepted a competing merger offer by WestPoint Pepperell (now WestPoint Home) for $41 per share (in cash or equivalent value of WestPoint Pepperell common stock); Bilzerian and his fellow investors agreed separately to sell their stake to WestPoint Pepperell for $40 per share plus reimbursement of $7.5 million in expenses. Bilzerian moved back to
Tampa, Florida Tampa ( ) is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. Tampa's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and t ...
in 1986. That July he and fellow investors William and Earle I. Mack (sons of New Jersey real estate developer H. Bert Mack) launched a takeover bid against the
Hammermill Paper Company Hammermill Paper Company is an American paper manufacturer originally founded in 1898 as the Ernst R. Behrend Company. The company was purchased in 1986 by International Paper Company, where the namesake survived as a brand of paper. This brand w ...
, purchasing about 3.3 million Hammermill shares at an average price of roughly $47-per-share, and then offering $52-per-share, and later $57-per-share, to purchase the remainder of the company. Bilzerian's offer was ultimately rejected, and Hammermill sold out to
International Paper The International Paper Company is an American pulp and paper company, the largest such company in the world. It has approximately 39,000 employees, and is headquartered in Memphis, Tennessee. History The company was incorporated January 31 ...
instead at $64.50 per share, but Bilzerian and his fellow investors still made a profit of $60 million or more from the deal.


Singer Corporation

In 1987, Bilzerian began a takeover of defense electronics manufacturer
Singer Corporation Singer Corporation is an American manufacturer of consumer sewing machines, first established as I. M. Singer & Co. in 1851 by Isaac Singer, Isaac M. Singer with New York lawyer Edward Cabot Clark, Edward C. Clark. Best known for its sewing mac ...
, a sewing machine maker that had turned to producing a flight simulator for training pilots. It became his first successful takeover attempt. In October 1987, it came to light that a group of investors led by Bilzerian had purchased 2.1 million Singer shares in the preceding two months. The October 1987 Black Monday crash spooked competing investors. Singer seemed an unlikely target for a takeover; early reports cast doubt on the idea that the government would permit a
hostile takeover In business, a takeover is the purchase of one company (law), company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast t ...
of a defense contractor, and the company had already moved its headquarters from Connecticut to takeover-hostile New Jersey in an attempt to fend off a previous takeover attempt by T. Boone Pickens. Bilzerian said that if he bought the company he planned to dispose of its military business. In January 1988, Pickens provided $150 million in financing which helped Bilzerian acquire Singer. After he engaged in a
leveraged buyout A leveraged buyout (LBO) is the acquisition of a company using a significant proportion of borrowed money (Leverage (finance), leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of t ...
of the company and owned a controlling stake, Bilzerian became its Chairman and CEO from February 1988 through June 1989, though he was not involved in day-to-day management. He was litigous; ''Fortune'' wrote in March 1988: "He sues not only his takeover targets but the people on his own team: partners, lawyers who try to collect fees, even the bankers who finance him." In November 1989, the company filed for bankruptcy.


Criminal conviction

In 1986, the government stumbled onto an
insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider informati ...
scheme in which
Drexel Burnham Drexel Burnham Lambert Inc. was an American multinational investment bank that was forced into bankruptcy in 1990 due to its involvement in illegal activities in the junk bond market, driven by senior executive Michael Milken. At its height, i ...
investment banker Dennis Levine was exchanging inside information for cash from trader Ivan Boesky. This in turn led to an indictment of Boyd Jefferies, the owner & chairman of Jefferies & Company. Jefferies cut a deal to testify against three individuals, including Bilzerian. The U.S.
Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...
(SEC) then investigated whether Bilzerian had failed to timely and truthfully file two SEC
Schedule 13D Schedule 13D is an SEC filing that must be submitted to the US Securities and Exchange Commission within 10 days by anyone who acquires beneficial ownership of more than 5% of any class of publicly traded securities in a public company. A filer mu ...
filings, and whether he failed to disclose investors in his partnerships.Payback at 94–97. In May 1988, the SEC began a probe against shopping center developer Edward J. DeBartolo, Sr. to determine whether DeBartolo had illegally aided Bilzerian's hostile takeover attempts through illegal "stock parking", in which one party purchases shares in coordination with another to keep legal ownership separated, beneficial ownership disguised, and avoid either party's holdings exceeding federal disclosure law thresholds. DeBartolo's name had been on the U.S. Justice Department's ''Organized Crime Principal Subjects'' list, discontinued years earlier. The following year DeBartolo settled a suit against him by the SEC, agreeing to give up $2.7 million in profits from Cluett Peabody and Hammermill Paper Co. stock transactions. In December 1988, US Attorney for the Southern District of New York
Rudy Giuliani Rudolph William Louis Giuliani ( , ; born May 28, 1944) is an American politician and Disbarment, disbarred lawyer who served as the 107th mayor of New York City from 1994 to 2001. He previously served as the United States Associate Attorney ...
announced that Bilzerian had been indicted in federal district court in Manhattan by a federal
grand jury A grand jury is a jury empowered by law to conduct legal proceedings, investigate potential criminal conduct, and determine whether criminal charges should be brought. A grand jury may subpoena physical evidence or a person to testify. A grand ju ...
. The indictment was on 12 counts of conspiracy, false statements, tax fraud, and securities fraud, including illegal stock parking, and filing false Schedule 13(d) disclosure statements to illegally hide his ownership of stock in takeover targets Cluett Peabody and Hammermill Paper Company in secret accounts at Jefferies, and claims regarding failed takeovers of H. H. Robinson and Armco. In January 1989, Bilzerian pleaded not guilty to the charges. At trial in May 1989, the government described him as having used "trickery and deceit" to enrich himself. A widespread public view was that Bilzerian's activities were "
greenmail Greenmail or greenmailing is a financial maneuver where investors buy enough shares in a target company to threaten a hostile takeover, prompting the target company to buy back the shares at a premium to prevent the takeover. Corporate raids invo ...
", with him profiting by deceiving companies into believing they faced a hostile takeover attempt and scaring them into buying their stock from him at a high price. Some saw Bilzerian as guilty only of making a profit in genuine-but-failed takeover attempts which benefited all investors. In an article in ''New York'' magazine as the trial was proceeding, Christopher M. Byron questioned whether the case might stem from "Puritan envy". He further opined that the Department of Justice's motivation was at least in part a need to justify its earlier
plea bargain A plea bargain, also known as a plea agreement or plea deal, is a legal arrangement in criminal law where the defendant agrees to plead guilty or no contest to a charge in exchange for concessions from the prosecutor. These concessions can include a ...
with Boyd Jeffries. Daniel Fischel, at the time a professor at the University of Chicago Law School, argued Bilzerian's actions benefited the shareholders of Cluett Peabody and Hammermill Paper Company. After eight hours of deliberations over two days in June 1989, the jury found Bilzerian guilty on all nine counts including
criminal conspiracy In criminal law, a conspiracy is an agreement between two or more people to commit a crime at some time in the future. Criminal law in some countries or for some conspiracies may require that at least one overt act be undertaken in furtherance ...
,
making false statements Making false statements () is the common name for the United States federal process crime laid out in Section 1001 of Title 18 of the United States Code, which generally prohibits knowingly and willfully making false or fraudulent statements, or ...
,
securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.tax fraud Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trust (property), trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax au ...
, and
securities law Securities regulation in the United States is the field of U.S. law that covers transactions and other dealings with securities. The term is usually understood to include both federal and state-level regulation by governmental regulatory agencie ...
violations, and he faced a maximum sentence of 45 years in prison and a fine of $2.25 million. In September,
U.S. district judge The United States district courts are the trial courts of the United States federal judiciary, U.S. federal judiciary. There is one district court for each United States federal judicial district, federal judicial district. Each district cov ...
of the U.S. District Court for the Southern District of New York Robert Joseph Ward sentenced Bilzerian to four years in prison and a fine of $1.5 million, saying: "In short, he lies." Bilzerian was permitted to remain free pending appeal. He appealed, and the Court of Appeals for the Second Circuit ruled against him in January 1991 in a split decision, finding no merit in his argument that his trial had been unfair. He started to serve his sentence in December 1991 at the now-closed Federal Prison Camp, Eglin at Eglin Air Force Base, Florida, and later in a prison in Georgia. Bilzerian was released from prison 13 months later, in December 1992, to serve out the remainder of his sentence under
house arrest House arrest (also called home confinement, or nowadays electronic monitoring) is a legal measure where a person is required to remain at their residence under supervision, typically as an alternative to imprisonment. The person is confined b ...
. After Bilzerian's release from prison, he became president of Utah-based software company Cimetrix. ''The New York Times'' quoted the then-president of the company as saying: "He has a wonderful track record; he is a genius, and he has a Harvard M.B.A." The newspaper then added: "He also has a prison record." in January 2001, Bilzerian was jailed again, this time for
contempt of court Contempt of court, often referred to simply as "contempt", is the crime of being disobedient to or disrespectful toward a court of law and its officers in the form of behavior that opposes or defies the authority, justice, and dignity of the co ...
by Judge Stanley S. Harris of the U.S. District Court, District of Columbia, who was demanding that he provide better documentation of his assets. It was nearly a year before he was released.


SEC civil suit and judgment

After Bilzerian was convicted, the SEC filed a
civil suit A lawsuit is a proceeding by one or more parties (the plaintiff or claimant) against one or more parties (the defendant) in a civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. T ...
against him based on identical charges to force him to disgorge his illegal profits from the takeover attempts. In 1993, a federal judge ruled in favor of the SEC and ordered Bilzerian to disgorge $33.1 million of profits, plus interest. The total amount to be disgorged was thus $62 million. In January 1994, Bilzerian filed an appeal against the civil judgment in the Court of Appeals for the District of Columbia. However, the court rejected his civil appeal as well. In order to avoid paying the SEC the judgment against him, Bilzerian said he did not have any money, declared bankruptcy twice, and then moved to St. Kitts and Nevis to escape the jurisdiction of the U.S. government. Bilzerian first filed for
Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...
in August 1991. He listed no assets, though the SEC and other creditors Creditors and the Securities and Exchange Commission accused him of hiding his assets overseas. He emerged from that bankruptcy having disgorged what he said were all his non-exempt assets in settlement of debts that mostly consisted of claims by the government. In 1999, he tried to put his house in the prestigious Avila neighborhood of
Tampa Tampa ( ) is a city on the Gulf Coast of the United States, Gulf Coast of the U.S. state of Florida. Tampa's borders include the north shore of Tampa Bay and the east shore of Old Tampa Bay. Tampa is the largest city in the Tampa Bay area and t ...
, Florida, up for sale. As the SEC continued its efforts to have Bilzerian pay his fine, the judge issued an order appointing a receiver over Bilzerian’s assets and ordered him arrested for
civil contempt Contempt of court, often referred to simply as "contempt", is the crime of being disobedient to or disrespectful toward a court of law and its officers in the form of behavior that opposes or defies the authority, justice, and dignity of the co ...
as he failed to give a full account of his assets. Bilzerian then filed for bankruptcy again in January 2001, declaring he had non-exempt assets of only $15,805 against $140 million in debts, most of which was for the government's disgorgement judgment. His home, which he called his
Taj Mahal The Taj Mahal ( ; ; ) is an ivory-white marble mausoleum on the right bank of the river Yamuna in Agra, Uttar Pradesh, India. It was commissioned in 1631 by the fifth Mughal Empire, Mughal emperor, Shah Jahan () to house the tomb of his belo ...
, was the largest home in Hillsborough County, a 36,000-square-foot lakefront mansion that included an indoor basketball court and scoreboard, movie theater, 21 bathrooms, elevator, nine-car garage, and a 6,000-square-foot guest house. However, under Florida Bankruptcy Law, the value of his primary residence was shielded from creditors. The SEC alleged that Bilzerian was using bankruptcy as a tactic to block creditors from finding out the true value of his assets, and Bilzerian argued that was a fabrication as the bankruptcy laws require full disclosure and a trustee to take possession of his assets. On June 11, 2001, while Bilzerian was in prison,
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
agents raided his family's residence on the strength of a sealed warrant and seized computers, files, and a
Beretta Fabbrica d'Armi Pietro Beretta (; "Pietro Beretta Weapons Factory") is a privately held Italian firearms manufacturing company operating in several countries. Its firearms are used worldwide for various civilian, law enforcement, and military p ...
firearm. The raid appeared to be related to SEC contentions that Bilzerian had concealed his ownership of assets during bankruptcy proceedings by transferring them to trusts and
shell corporation A shell corporation is a company or corporation with no significant assets or operations often formed to obtain financing before beginning business. Shell companies were primarily vehicles for lawfully hiding the identity of their beneficial ...
s, which Bilzerian claimed was a fabrication. Bilzerian unsuccessfully sued the FBI agent for filing a sworn affidavit that contained mostly what Bilzerian alleged were false statements, as a federal judge dismissed his case. Bilzerian was released from prison in January 2002 pursuant to an agreement under which his wife, Terri Steffen would sell the residence and split the proceeds with the SEC, and transfer most of her wealth to the SEC. Bilzerian was critical of the deal, describing it as the SEC using him "as a hostage to extort money" from his wife. In May 2004, Steffen sold her residence for $2.55 million to a partnership controlled by a Belgian businessman; SEC attorneys approved the unusually low price. According to court documents filed in 2006, Steffen's parents purchased a 99% interest in that partnership three weeks later. In September 2024, Bilzerian and his accountant were charged in federal court with conspiracy to commit
wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...
and securities fraud for hiding assets in shell corporations to avoid paying the previous SEC fines. In December 2024, ''The Wall Street Journal'' reported that Bilzerian had "been on the run from the Securities and Exchange Commission for so long 1 yearsthat he now owes the agency $180 million with interest."


2024 criminal and civil charges

In September 2024, Bilzerian was again charged with crimes in the United States. A federal grand jury indicted him and his accountant and he was charged in federal court on nine counts including conspiracy to commit
wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical (e.g., the U.S. Postal Service) or electronic (e.g., a phone, a telegram, a fax, or the Internet) mail system to defraud another, and are U.S. fede ...
, securities fraud, and conspiracy to defraud the United States by hiding assets in shell corporations to avoid paying his previous SEC fines. If he is convicted of all charges, he will face a maximum sentence of five years in prison for each conspiracy count, and up to 20 years in prison for each wire fraud count. In a parallel action, the SEC filed a civil action against him and others in the U.S. District Court for the Southern District of New York, alleging the fraudulent reporting of revenue.


References


External links


"How a Wall Street Felon Stayed in His Mansion."
''The Wall Street Journal'', September 16, 2014 {{DEFAULTSORT:Bilzerian, Paul 1950 births American businesspeople convicted of crimes American financiers American male criminals American people convicted of fraud American people convicted of making false statements American people of Armenian descent American white-collar criminals Businesspeople from Miami Corporate raiders Criminals from California Harvard Business School alumni Living people Place of birth missing (living people) Prisoners and detainees of the United States federal government Stanford University alumni