Craig Rothfeld Founder: From Finance Professional to Advocate for Justice

From Finance Pro to Federal Target

Craig Rothfeld calls me on a Friday afternoon, sliding into the weekend after yet another high-profile case made headlines. The founder of Inside Outside has been busy lately. You might have seen his name in Fox News or the New York Post when Luigi Mangione hired Harvey Weinstein’s former prison consultant. That consultant is Craig.

“Yeah, I think first of all, thank you for having me on and I’m glad we can do this and I think this is our fifth attempt to find it, we’ve gotten to know each other through the process,” Craig told me. We’d been trying to connect for weeks as his phone kept ringing with emergency calls from defense attorneys.

Before Craig became the go-to guy for high-profile white collar defendants facing prison, he was building something else entirely. Growing up in Oceanside, Long Island, he had law in his blood. His grandfather, uncle, and great uncle all worked at the family law firm. His dad was the only one who chose education over litigation. Craig started at SUNY Albany as a criminal justice major, planning to follow the family tradition.

Then his mom gave him advice that changed everything. “You’re going to go to law school,” she told him, “and it’s really good for attorneys to know accounting and finance, it’s a skill that most of them don’t have.” So Craig switched to accounting, figuring he could learn the criminal justice system later.

Building an Empire

Craig graduated into a job at Arthur Andersen, one of the Big Eight accounting firms. He hated auditing. After about a year, he jumped to Lehman Brothers for retail brokerage training. He got his MBA from NYU Stern, worked corporate finance in Philadelphia, then got a call from his best friend from high school.

That friend worked on the floor of the New York Stock Exchange and needed help financing the purchase of his seat. Craig put together the entire financial structure over the phone from Philadelphia. When 9/11 hit, his friend made him an offer: “You can always be an investment banker. Why don’t we try to build this company together?”

On January 1, 2002, Craig joined what became his former company. They took 13 people doing $6 million in revenue and turned it into a $46 million operation with 120-plus employees across five regional offices over 10 years.

“I’m guilty of a bunch of things and right at the very top of the list is absolute stupidity,” Craig told me about what happened next.

When Success Becomes Survival

The 2008 financial crisis hit their industry hard. Trading volume plummeted. Instead of cutting costs, they doubled down, hiring talent that other firms had laid off. When expenses grow at the same rate as revenues and something hits the skids, you have a problem.

“The decisions I should have made were to either fire people or cut their payouts in half, and not worry about losing the firm because ultimately I lost the firm,” Craig explained. Instead, they started borrowing against money owed to them to maintain regulatory capital requirements. These were real receivables, but when you sign a federal focus report claiming borrowed money as capital, you’ve committed a crime.

“The thought process was, by the time they figure it out, if they ever figure it out, you know, well, if fixed it, it’ll be a slap on the wrist,” Craig said. They also ran personal expenses through the business without picking them up as income. Tax fraud, plain and simple.

They shut down the business at the end of 2011 with money still in the bank. Investors wanted to put in more capital, but the SEC wouldn’t allow it the way they wanted. Craig took a bar from the industry through an admission waiver and consent. Nine attorneys and an accounting specialist told him the same thing: “You’re not going to jail. No one ever goes to jail for this.”

They were wrong.

The Knock on the Door

Twenty-six months after shutting down the business, on February 6, 2014, the Manhattan District Attorney came calling. The feds had passed on the case. State prosecutors picked it up.

“I believe when I look back on it all that from January 2013, businesses already been shut down a year… to February 2014, [were] the worst 13, for 13 months of my life because you wake up every day wondering that’s the dread,” Craig told me. “Is it going to happen? Is it going to happen? When’s it going to happen?”

He was in the shower getting ready for work when they knocked. His kids, nine and six years old, were still sleeping. The police told him he’d be home that night. Instead, he spent four days in the Tombs, Manhattan’s notorious detention center.

In July 2015, Craig took a negotiated plea for a promised sentence of one and a half to four and a half years. In New York State, sentencing day is remand day, no matter what. Unlike federal court, where some white collar defendants get time to surrender, state defendants go straight to jail.

That meant Rikers Island.

Rikers Reality

Craig and his former business partner were led into a dorm at 9 PM with 58 other people inside. Forty-one of them were Bloods gang members. For the first nine or ten days, the gang members thought Craig and his partner were undercover cops. They ran their ID numbers to verify they’d actually committed crimes.

“You had the four highest ranking, you know, members of the blood there were stationed in the four corners,” Craig described. “Half the people in the dorm wouldn’t talk to me at all.”

He kept to himself, stayed polite and respectful. Soon inmates were bringing him their legal papers to read because many couldn’t. He wrote letters for people who dictated them but couldn’t write themselves. He shared his books with everyone.

“Violence broke out in the dorms a few times. And, you know, this couple of the senior people in the dorm come over, you’re right, you’re okay,” Craig said. “So, I felt very grateful for that, because it could have gone a completely different way.”

Due to a clerk’s error on his commitment papers, Craig got trapped at Rikers for five and a half weeks instead of the standard two. His business partner got transferred after 10 days. Craig learned his first lesson in what would become his new career: the system makes mistakes, and those mistakes can cost you weeks or months of your life.

Building Something New

Today, Craig runs Inside Outside, advising high-profile defendants and their lawyers through the maze of plea negotiations, sentencing, and prison placement. He coupled his 22 months defending himself and 18 months of incarceration to become an expert on the New York State Department of Corrections.

He’s also working on criminal justice reform, actively involved in the LESS is More parole reform legislation. The guy who built a $46 million financial services company has found a different way to use his skills.

“They can take my money, they can take my freedom, but they can’t take my brain, right?” Craig told me. “They can’t take my mind, they can’t take my creativity, they can’t take my will, they can’t take my spirit, they can’t take those things.”

He’s building again. Just not what he expected.