'I Once Was Lost': Turning Ex-Cons Into Entrepreneurs

Defy Ventures offers former criminals a second shot by training them to run their own businesses.

Miller Mobley

A Clean Slate Through her M.B.A.-style program, Defy Ventures, Catherine Rohr is helping former prisoners, including Maliki Cottrell (left) and Marlon Llin (center), learn how to launch their own companies.

Catherine Rohr stands at the front of a drab, fluorescent-lit classroom in Midtown Manhattan. Her 27 students, who sit crammed into chair-desks, are ex-cons whose crimes include narcotics trafficking and murder. Rohr, 35, is dressed conservatively in long black pants, a button-down white shirt, fitted jacket, and high heels. Beneath her razor-straight bangs, Rohr's kohl-rimmed eyes zero in on a man in the back of the room, leaning against the wall.

"Are you sleeping back there?" she barks.

"No," says the man. "I'm just not feeling that well."

"From now on, no one in the back row can rest their heads against the wall," she orders. "It looks like you're not paying attention."

These men are the inaugural class of Defy Ventures, a yearlong, M.B.A.-style program that Rohr created to teach former inmates how to start their own companies. For months, they have been meeting here for 14 to 16 hours a week to learn about things such as cash flow, balance sheets, intellectual property, accounting, and taxes. There are workshops on how to behave in professional settings, how to speak in public, and how to be a better parent. These men are also learning how to create business plans. In June, they will compete in a business-plan competition. The winners will split $100,000 in seed funding.

Rohr has an interesting theory about criminals. She says that many of the qualities that made these men good at being bad guys (until they got caught, of course) are the same qualities that make effective entrepreneurs. Some of the men in this class had up to 40 employees under management. Though their merchandise was illegal narcotics and not, say, office supplies, these men developed certain business skills'the ability to motivate a team, identify new markets, manage risk, and inspire loyalty and hard work. Rohr's goal is to help these students apply their abilities to legal endeavors.

Rohr continues today's lesson, evaluating the company names proposed by each student. "What's the name of your business?" she asks, pointing to one of the students.

"Mine's is'"

"What did you say?" Rohr pounces. She's a stickler for proper speech. He stops and takes a deep breath.

"Mine is..." he carefully enunciates. Rohr smiles slightly as the man continues.

In this room of former criminals, Rohr may be the most intimidating figure. She runs the show. It's not just because these men respect her, though they clearly do, but because part of the deal of being in this room is doing what Rohr tells them to do. In exchange, they get a once-in-a-lifetime opportunity. And for that, they are willing to sit up straight, put their personal lives on hold, and study hard.

This program is the type of second chance that none of these men ever thought they would get. It's also a second chance for Rohr, who not very long ago had her own'very public'fall from grace.

At age 25, Rohr found God. She and her husband, Steve, a lawyer, began attending a church in the Bay Area. She worked as an associate at Summit Partners, a venture capital firm in Palo Alto. At church, Rohr was introduced to the concept of tithing, giving away 10 percent of her income to the church or charity. Donating felt really good. So good that she resolved to make $1 million a year by age 30, just so she could give away 95 percent of it.

A couple of years later, after landing a job in New York City at American Securities Capital Partners, a private equity firm, Rohr took a trip to several prisons in Texas as part of a Christian outreach program. It was there that Rohr first made the connection between criminals and entrepreneurs. These men exhibited many of the same qualities she looked for when she met with founders as an investor.

In 2004, Rohr launched the Prison Entrepreneurship Program, or PEP, in Houston to teach inmates basic business skills. After several months of running the program remotely, Rohr left her job and moved to Texas to focus all her efforts on PEP. She and her husband spent nearly every penny they had, including her entire 401(k), on the program. She and volunteer executives taught classes about marketing, finance, and how to act professionally. And it was all topped with a thick frosting of religion'both because it fueled Rohr's passion and because religion is an unspoken requirement for any prison rehabilitation program in Texas.

Rohr believed God had called her to this ministry. And what she was able to accomplish in a short time struck many as miraculous. In five years, about 500 students graduated from the program. About 60 of them started businesses when they left prison. More important, the recidivism rate of graduates'at the time, around 10 percent'was much lower than the U.S. average of 40 percent. Rohr and her program received several honors for public service, including awards from Texas Governor Rick Perry and President George W. Bush.

But everything came crashing down in 2009, when Rohr admitted to her staff of volunteers that she had had inappropriate relationships with four graduates of her prison program. "I felt like I'd been punched in the gut," says Bert Smith, one of those volunteers. After someone sent an anonymous letter to the Texas Department of Criminal Justice, which has strict policies against volunteers becoming personally involved with inmates, the department launched an investigation. Rohr says that none of the relationships started until after the prisoners were out of jail. But the department barred her from ever entering the Texas prison system again, citing security concerns. It also threatened to kick PEP out of the prison system if Rohr was involved in the program in any way. Devastated, she resigned.

The troubles, says Rohr, started a year earlier, when her husband asked for a divorce after nine years of marriage. In retrospect, the divorce wasn't so unexpected, she says. As the program grew, Rohr traveled frequently, visiting prisons and raising money for the program. She slept four hours a night and was rarely home. "I didn't have good boundaries in terms of working a certain number of hours and then I'll be home and be a wife," says Rohr. "I wasn't living sustainably."

After the divorce, she felt ashamed. "Instead of reaching out for help, I chose to be on my own," Rohr says. "And in that aloneness, I didn't make the best decisions." Rohr won't discuss specifics but claims that not all four relationships were "what people thought."

The media, which had frequently celebrated Rohr's efforts to reform prisoners, pounced on the story of her downfall. The scandal became news as far away as China. Prisons Ban Founder for 'Improper Relationships,' read the headline in the Austin American-Statesman. That particular story attracted more than 60 online comments, most of them negative. "Let me guess, the greater the crime committed by the ex-convict, the dirtier the sex?" wrote one commenter. Others claimed to have knowledge of more than four affairs. "I was just bawling my eyes out," says Rohr. "They wrote untrue things'all sorts of uninformed comments. I didn't want to live anymore. I thought that I would live my whole life covered in shame."

Before the scandal, Rohr often spoke at churches and conferences about the prison program. She would always ask the crowd, "What would it be like if you were known for the worst thing that you ever did in your life?" Now, she was in that very situation.