What To Expect In Federal Prison: The Black Market

By Elizabeth Franklin-Best, Esq., and Christopher Zoukis, JD, MBA

Federal prison has no cash, so it develops an informal economy — and taking part in it is a disciplinary offense before it is anything else. The Bureau of Prisons does not need to prove anyone sold drugs or ran a racket to write an incident report: Code 328 makes it a prohibited act to give or accept “money or anything of value to, or from, another inmate or any other person without staff authorization,” full stop, and that includes a soup handed across a table.

This page explains how the informal economy works, why the Bureau’s own rules create it, and exactly what it costs — because the family members who call us usually do so after an incident report has already landed, asking how a bag of coffee turned into fourteen days of lost good conduct time. It is not a guide to participating in anything.

Question	Current answer	Source
Is trading with another prisoner an offense?	Yes — Code 328, Moderate severity, no exceptions for small value	PS 5270.09 at p. 52
Is lending for profit an offense?	Yes — Code 304, “loaning of property or anything of value for profit or increased return”	PS 5270.09 at p. 51
Is holding cash an offense?	Yes — Code 303, possession of money or currency unless specifically authorized	PS 5270.09 at p. 51
Monthly commissary spending limit	$460 per month, raised from $360 on 7 May 2026	PS 4500.13 at p. 28
Holiday increase	+$50 during the November/December period, for no more than one validation period	PS 4500.13 at p. 28
Are stamps excluded from the limit?	Yes — postage stamps are on the exclusion list, and postage carries no mark-up	PS 4500.13 at p. 28, [p. 38]
Stamp purchase cap	Ordinarily no more than 20 first-class domestic stamps per commissary visit	PS 4500.13 at p. 31
Criminal statute	18 U.S.C. § 1791 — maximums from 6 months to 20 years, and sentences run consecutive	18 U.S.C. § 1791
Drone-delivered contraband	The SAFER SKIES Act adds five years to the § 1791 maximum	6 U.S.C. § 124n-1(d)
Can property bought from another prisoner be reclaimed?	Ordinarily no — a claim of ownership “is ordinarily not accepted”	PS 5580.10 at p. 13

Current as of 7 September 2026. A Program Statement is agency policy, not law: the regulation binds the Bureau, and the Program Statement is how the Bureau instructs its staff to apply it.

Why the informal economy exists: the Bureau built the conditions for it

Nothing about this is mysterious, and understanding the mechanics is what lets a family see the trap before someone walks into it.

There is no cash. A person in federal prison holds money only as a balance in a Trust Fund account. Money reaches that account through three channels and no others — the national LockBox, Western Union, and MoneyGram — and even then, “personal checks, cash, and any negotiable instrument not payable in U.S. dollars cannot be accepted” (PS 4500.13 at p. 71). Acceptable instruments are money orders, U.S. government checks, business checks, and cashier’s or certified checks and bank drafts (at p. 71). Our page on sending money to a federal inmate walks through the mechanics, and MoneyGram and Western Union have their own pages.

Every purchase is a debit against that balance, recorded in the Bureau’s TRUFACS system. There is no way for one account to pay another. So when two people want to exchange anything of value, there is no lawful instrument for doing it — which is the first structural cause of everything on this page.

Earnings are very small. The Bureau publishes hourly rates for its Trust Fund workers: $0.55 per hour starting, $0.75 after three months’ service, $0.95 after six months, and $1.20 after nine months, with any increase capped at $1.20 and dependent on work performance and available funds (PS 4500.13 at p. 24). Institution work assignments generally are graded into four performance-pay levels under 28 C.F.R. § 545.26, distributed approximately 5% at Grade 1, 15% at Grade 2, 25% at Grade 3 and 55% at Grade 4, with pay owed only for hours actually worked — time lost to a call-out, a visit, sick call or a phone call is deducted. Facilities work has its own four-grade structure, but the hourly rates come from an Operations Memorandum issued annually by the Chief, Facilities Management Branch, not from the Program Statement (PS 4250.01 at p. 2), so there is no published national figure. UNICOR pays more, and comparatively few people work there. Our page on jobs and work assignments has more.

Spending is capped. The Bureau imposes a $460 per month spending limitation — raised from $360 on 7 May 2026 — and says why in the policy itself: “To lessen the disparity between affluent inmates and inmates with few resources” (PS 4500.13 at p. 28). The limit rises by $50 in the November/December holiday period, for no more than one validation period, and is revalidated automatically each month.

And the Bureau knows exactly what the cap produces. The paragraph immediately after the spending limitation reads: “To enable institution management to control or restrict gambling and other illicit activities involving payoffs, local controls, including quantity limitations, may be set to restrict trafficking of Commissary items” (PS 4500.13 at p. 28). That sentence is the Bureau conceding, in its own manual, that capped goods in a cashless environment become tradeable goods, and authorizing wardens to respond item by item. It is also why the same snack costs a different amount of trouble at different institutions.

Put those four facts together and you have the whole system: no currency, minimal income, capped consumption, and a population with time. What fills the vacuum is barter, and barter is a prohibited act.

Stamps, and why the Bureau treats them the way it does

If you have heard that stamps are money in prison, this is why, and the reason is written into the commissary manual rather than into folklore.

Postage stamps are on the short list of items excluded from the monthly spending limitation (PS 4500.13 at p. 28) — one of only eight categories, alongside nicotine replacement therapy, over-the-counter medications, kosher and halal shelf-stable entrees for people on IFRP-refusal status, copy cards and paper, footwear, mattresses, and the secured media device. Postage is also one of a handful of items sold with no mark-up at all, at cost, and not rounded to the next highest nickel — everything else on the shelf is priced at cost plus a 30% base mark-up adjusted annually by the national Consumer Price Index (PS 4500.13 at p. 38).

So stamps are the one commissary item that is uncapped, uniform, small, durable, and sold at cost. That is a functional definition of a unit of account, and the Bureau’s own countermeasures show it understands the problem:

• The commissary “may sell a maximum of five different denominations of stamps,” and the only first-class stamp purchased for resale is the Forever stamp (PS 4500.13 at p. 31).
• “Ordinarily, the Commissary sells no more than 20 postage stamps (for first class, domestic, one-ounce mailing), or the equivalent per Commissary visit.” An exception exists only where visits are limited to one per week or less, in which case the Unit Manager may authorize additional purchases in writing “based on a demonstrated need,” and the authorization must be scanned into TRUFACS (PS 4500.13 at p. 31).
• Stamps count as a single item against the 600-item ceiling on total commissary offerings (PS 4500.13 at p. 30).

None of that makes possessing stamps an offense. Buying and holding stamps to write letters is exactly what they are for, and our page on writing to an inmate covers the mail rules. What makes stamps a problem is transfer. A book of stamps handed to another person without staff authorization is “anything of value” under Code 328, and the fact that it is stamps rather than cash changes nothing about the charge.

The same is true of the electronic side. TRULINCS email and CorrLinks and the inmate telephone system both run on account balances, and using either one to arrange a transaction is separately chargeable — Codes 296 and 297 at High severity where the use circumvents monitoring, Codes 396 and 397 at Moderate where it does not, and Codes 196 and 197 at Greatest severity where the purpose is illegal (PS 5270.09 at p. 46, [p. 49], [p. 53]).

The prohibited acts: what actually gets charged

Every entry is from Table 1 of the Inmate Discipline Program; the binding version is the table at 28 C.F.R. § 541.3.

Code	The act, as written	Severity	Where
328	“Giving money or anything of value to, or accepting money or anything of value from, another inmate or any other person without staff authorization.”	Moderate	PS 5270.09 at p. 52
305	“Possession of anything not authorized for retention or receipt by the inmate, and not issued to him through regular channels.”	Moderate	PS 5270.09 at p. 51
304	“Loaning of property or anything of value for profit or increased return.”	Moderate	PS 5270.09 at p. 51
303	“Possession of money or currency, unless specifically authorized, or in excess of the amount authorized.”	Moderate	PS 5270.09 at p. 51
331	Possession, manufacture, introduction or loss of a non-hazardous tool or “other non-hazardous contraband” — the text names food, cosmetics, cleaning supplies, “smoking apparatus and tobacco in any form where prohibited,” and unauthorized nutritional supplements	Moderate	PS 5270.09 at p. 52
324 / 325 / 326	Gambling · preparing or conducting a gambling pool · possession of gambling paraphernalia	Moderate	PS 5270.09 at p. 52
334	“Conducting a business; conducting or directing an investment transaction without staff authorization.”	Moderate	PS 5270.09 at p. 53
314	Counterfeiting, forging or unauthorized reproduction of any document, article of identification, money, security or official paper	Moderate	PS 5270.09 at p. 51
217	“Giving money to, or receiving money from, any person for the purpose of introducing contraband or any other illegal or prohibited purpose.”	High	PS 5270.09 at p. 48
216	“Giving or offering an official or staff member a bribe, or anything of value.”	High	PS 5270.09 at p. 48
219 / 226	Stealing; theft · possession of stolen property	High	PS 5270.09 at p. 49
204	“Extortion; blackmail; protection; demanding or receiving money or anything of value in return for protection against others, to avoid bodily harm, or under threat of informing.”	High	PS 5270.09 at p. 47
108	Possession, manufacture, introduction or loss of a hazardous tool — the definition names a “portable telephone, pager, or other electronic device”	Greatest	PS 5270.09 at p. 45
111 / 112 / 113	Introduction or making · use · possession of narcotics, marijuana, drugs, alcohol, intoxicants or related paraphernalia not prescribed by medical staff	Greatest	PS 5270.09 at p. 45–[p. 46]
115	“Destroying and/or disposing of any item during a search or attempt to search.”	Greatest	PS 5270.09 at p. 46

Three things about that table are worth sitting with.

Code 328 has no minimum. It is not written around profit, quantity or intent. Giving or accepting anything of value to or from another person without staff authorization completes the offense. A stamp, a bag of coffee, a pair of shower shoes, a birthday soup — the elements are the same. Most family members find this hard to believe until they read the text.

Code 305 is the workhorse. “Possession of anything not authorized for retention or receipt by the inmate, and not issued to him through regular channels” is how the vast majority of informal-economy items are charged, because it does not require staff to prove where the item came from — only that it was not issued, purchased or approved.

The severity level jumps sharply once money moves for a purpose. Codes 328 and 305 are Moderate. Code 217 — money moving “for the purpose of introducing contraband” — is High. A phone is Greatest. The same underlying conduct can land on three different rungs depending on what it was for.

What it costs

Sanctions are set by severity level, and the list is the same at each level; what changes is the ceiling. From PS 5270.09 at p. 46–[p. 55]:

Severity	Good conduct time disallowance	Disciplinary segregation	Also available at every level
Greatest	Ordinarily 50–75% — 27 to 41 days — of the good conduct time available for the year	Up to 12 months	Monetary restitution · monetary fine · loss of privileges (visiting, telephone, commissary, movies, recreation) · change of housing · removal from a program or group activity · loss of job · impoundment of personal property · confiscation of contraband · restriction to quarters · extra duty
High	Ordinarily 25–50% — 14 to 27 days	Up to 6 months	(as above)
Moderate	Ordinarily up to 25% — 1 to 14 days	Up to 3 months — i.e. up to 90 days	(as above)
Low	Up to 12.5% (1–7 days) for a second violation of the same act within 6 months; up to 25% (1–14 days) for a third within 6 months	—	(as above)

A good conduct time sanction may not be suspended at any level. And the consequences do not stop at the hearing room:

• Custody scoring. A disciplinary finding feeds into security designation and custody classification. This is the mechanism that moves someone from a camp to a low, or from a low to a medium — often the single most consequential thing that happens to a person’s daily life.
• Time. Lost good conduct time is lost time. Disciplinary findings also affect First Step Act time credit posture and PATTERN scoring.
• Release planning. Findings are visible to the unit team making halfway house and home confinement recommendations, and they surface in the record on any later motion.
• Housing. Loss of privileges is the listed sanction, but a person in debt or under threat frequently ends up in the Special Housing Unit or seeking protective custody, neither of which is a good outcome.

Our inmate discipline proceedings page covers the hearing itself. The evidentiary bar is low: under Superintendent, Mass. Correctional Institution at Walpole v. Hill, 472 U.S. 445 (1985), due process requires only “some evidence in the record,” and a reviewing court’s inquiry “does not require examination of the entire record, independent assessment of the credibility of witnesses, or weighing of the evidence.” That is precisely why the record has to be built at the hearing.

The criminal statute: 18 U.S.C. § 1791

Discipline and prosecution are separate tracks and neither waits for the other. 18 U.S.C. § 1791 makes it a federal crime both to provide a “prohibited object” to a person in prison and, for the person in prison, to make, possess, obtain or attempt to make or obtain one.

Category of prohibited object	Maximum	Provision
A narcotic drug, methamphetamine and its salts and isomers, LSD, or PCP	20 years	§ 1791(b)(1) / (d)(1)(C)
A firearm or destructive device, or a Schedule I or II controlled substance other than marijuana	10 years	§ 1791(b)(2) / (d)(1)(A)
Marijuana or a Schedule III substance; ammunition; a weapon other than a firearm or destructive device; an object designed or intended as a weapon or to facilitate escape	5 years	§ 1791(b)(3) / (d)(1)(B)
Any other controlled substance; an alcoholic beverage; any U.S. or foreign currency; a phone or other commercial mobile service device	1 year	§ 1791(b)(4) / (d)(1)(D)–(F)
“Any other object that threatens the order, discipline, or security of a prison, or the life, health, or safety of an individual”	6 months	§ 1791(b)(5) / (d)(1)(G)

Two features of the statute matter more than the maximums:

It stacks. Section 1791(c) provides that “any punishment imposed under subsection (b) for a violation of this section by an inmate of a prison shall be consecutive to the sentence being served by such inmate at the time the inmate commits such violation,” and that any punishment for a violation involving a controlled substance is consecutive to any other sentence for an offense involving that substance. A § 1791 conviction is not absorbed into an existing sentence. It is added to the end.

Currency and phones are named. Subparagraph (E) is “any United States or foreign currency,” and (F) is “a phone or other device used by a user of commercial mobile service.” Both carry a one-year maximum. That is why possession of a phone is simultaneously a Greatest-severity prohibited act and a separate federal offense, and it is the single most common way an informal-economy problem becomes a criminal one. The catch-all in (G) — “any other object that threatens the order, discipline, or security of a prison” — is what reaches items the statute does not name.

The Bureau’s own visitor policy states the point plainly for people on the outside: 18 U.S.C. § 1791 “criminalizes providing, or attempting to provide, inmates with ‘prohibited objects.’ Visitors providing, or attempting to provide, ‘prohibited objects’ to inmates are subject to criminal prosecution” (PS 5510.15 at p. 5). If a § 1791 charge is being discussed, that is the moment for defense counsel, not the moment to explain.

The drone amendment, and why it is on this page

Congress raised the stakes for one delivery method in particular. The SAFER SKIES Act — title LXXXVI of the National Defense Authorization Act for Fiscal Year 2026, Pub. L. 119–60, § 8605 — increases the § 1791 maximum by five years “[i]f a defendant who is convicted under section 1791 . . . knowingly used an unmanned aircraft to provide a prohibited object to an inmate of a prison,” codified at 6 U.S.C. § 124n-1(d).

The Act also directed the U.S. Sentencing Commission to act, and on 27 August 2026 the Commission adopted a new USSG § 3B1.6 (Use of Unmanned Aircraft), with a specified effective date of 15 March 2027. As adopted, the guideline applies the greater of a 6-level increase where the statutory enhancement at 6 U.S.C. § 124n-1(c) applies or the parties stipulate, or a 4-level increase where the offense “otherwise involved the use of an unmanned aircraft” — with an express instruction that “‘use’ does not include mere possession,” and a special instruction to apply whichever provision produces the greater offense level where the drone conduct is the only basis for another adjustment.

One caveat, and it is important. The text above comes from the Commission’s preliminary, reader-friendly version released at its 27 August 2026 public meeting. That document states on its face that the amendment has been voted to promulgate but not yet officially submitted to Congress and the Federal Register, that “authority to make technical and conforming changes may be exercised,” and that motions to reconsider may be made. No official text exists yet. Treat the levels and the effective date as the Commission’s stated intention, not as settled guideline text, and check the Federal Register before relying on the wording. Our federal sentencing guidelines page covers how amendments take effect.

What this looks like from the family’s side

Most of the calls we take on this subject are not about someone who set out to run anything. They follow a recognizable arc, and the earlier a family understands it, the more can be done.

“He owes somebody.” Debt is the most dangerous thing in the informal economy, because the enforcement mechanism is not a court. Code 204 — extortion, blackmail, protection, “demanding or receiving money or anything of value in return for protection against others, to avoid bodily harm, or under threat of informing” — exists because that dynamic is common enough to have its own High-severity code (PS 5270.09 at p. 47). Our page on violence and sexual assault in prison covers the safety side, and protective custody covers the formal route out.

“Someone asked me to send money to a different account.” Do not. This is the single most common way a family member on the outside acquires their own criminal exposure, and it is also the fastest way to freeze the money. Institution staff “may encumber funds posted to an inmate’s account via the LockBox from an unauthorized correspondent,” notify the Trust Fund Branch Deposit Fund Section by trouble ticket with the person’s name, register number, date, reference number, amount and circumstance — and the Bureau “may void the deposit made to the inmate account,” returning the funds by U.S. Treasury check with a letter to the sender (PS 4500.13 at p. 68). A third-party deposit does not disappear quietly. It generates a dated record naming the sender.

“He got a shot and I don’t understand for what.” Ask for the BP-A0288 incident report and read the code number. A 328 is a very different problem from a 217, and a 108 is a different problem again. The code determines the severity level, the sanction ceiling, and whether a referral for prosecution is realistic.

“They took his property and he wants it back.” Read the next section carefully, because the rule on informally-acquired property is unforgiving.

“Should I just send more money so he isn’t a target?” That is a decision for the family and there is no universal answer, but understand what the rules permit: the monthly spending cap is $460 regardless of the balance, and the cap is precisely the mechanism the Bureau uses “to lessen the disparity between affluent inmates and inmates with few resources” (PS 4500.13 at p. 28). A larger balance does not buy a larger monthly purchase. Our guide on how much money to send and the page on what indigent inmates are provided set out what is actually needed.

Applied Insight — Christopher Zoukis, JD, MBA, Managing Director: The costliest misunderstanding families have about this subject is that the Bureau distinguishes between generosity and commerce. It does not. Code 328 reads “giving money or anything of value to, or accepting money or anything of value from, another inmate or any other person without staff authorization” — there is no exception for kindness, for repayment of a favor, or for a value of under a dollar. When we review an incident report on this code, the questions that matter are whether staff observed the transfer, whether the item was actually transferred or merely near two people, and whether the reporting officer’s account holds together. Those are hearing questions, and they are gone once the hearing is over.

Property acquired informally is usually unrecoverable

When a shakedown produces items that were traded rather than bought, the ownership rules decide what happens next — and they are written to defeat exactly this claim.

Under 28 C.F.R. § 553.13, reproduced in PS 5580.10 (Inmate Personal Property, reissued 7 May 2026):

1. Confiscated personal property is inventoried, and staff “shall provide the inmate with a copy of the inventory as soon as practicable.” A copy goes in the central file, and form BP-A0402, Confiscation and Disposition of Contraband, is completed (PS 5580.10 at p. 13).
2. The person has seven days following receipt of the inventory to provide evidence of ownership.
3. The two exclusions. “A claim of ownership may not be accepted for an item made from the unauthorized use of government property.” And: “Items obtained from another inmate (for example, through purchase, or as a gift) without staff authorization may be considered nuisance contraband for which a claim of ownership is ordinarily not accepted” — PS 5580.10 at p. 13.
4. If ownership is established but the item is contraband, staff mail it — anything other than hard contraband — at the person’s expense to an address they choose. The Warden may authorize the institution to pay postage where the item was unaltered and originally permitted or commissary-purchased, or where the person has insufficient funds.
5. Property is ordinarily held thirty days before destruction, so the person can obtain proof or appeal through the Administrative Remedy Program. If they appeal, the property is held until the appeal is complete (PS 5580.10 at p. 14).

That third step is the whole point. An item bought from the commissary has a receipt and a TRUFACS record behind it. An item acquired informally has neither, and the policy says in terms that a claim of ownership for it is ordinarily not accepted. This is not an oversight — it is the Bureau’s deliberate design, removing the incentive to trade by removing any recourse when the trade is discovered. Our prison grievances page and the property claims and inmate personal property policy pages cover the process.

What the Bureau does about it

For completeness, and because families ask: the enforcement apparatus is substantial and it is documented.

• Searches. Housing units and work areas are searched “routinely, but irregularly,” without notice and without the person present, under 28 C.F.R. § 552.14. Our searches and shakedowns page sets out the full ladder.
• Drug testing. Five percent of each institution’s population is tested at random every month, at all security levels; people on the “suspect” list are tested three times over three months; anyone found guilty of a drug or alcohol prohibited act is tested monthly for at least twelve months (PS 5514.01 at p. 3–[p. 4]).
• Ion screening. Since 7 May 2026, staff “may initiate inmate discipline proceedings based solely on a positive ion spectrometry device test result for an illegal substance, even in circumstances in which no observable or tangible amount of illegal substance(s) can be confiscated” (PS 5524.01 at p. 12), provided the policy’s corroboration requirements are met — a preserved item, a detailed memorandum, photographs, chain of custody and the printout.
• Monitoring. Phone calls, correspondence and TRULINCS messages are monitored, and monitored communications are expressly listed as an intelligence source for identifying people whose visitors should be screened out of random order (PS 5524.01 at p. 6).
• Financial review. Financial transactions appear on the same intelligence list.
• Lockdowns. “Mass Contraband Searches” is a listed reason to lock an institution down under PS 5525.01 at p. 4 — “to conduct comprehensive searches for weapons, drugs, illegal communication devices, or other contraband without the risk of items being passed or hidden during movement.” When that happens, the whole population loses movement, programming and often visits for the conduct of a few. See lockdowns and modified operations.
• Commissary controls. Nicotine products approved for sale must be kept in a locked safe or metal container and physically counted every day at the close of sales before inmate workers are released, with discrepancies reported in writing (PS 4500.13 at p. 36). Shelf-stable entrees are limited to 14 per visit with no more than 21 in possession (PS 4500.13 at p. 30). Coins are prohibited from sale outright (at p. 36).

Frequently Asked Questions About the Prison Black Market

Reviewed for legal accuracy by Elizabeth Franklin-Best, Esq., Principal Attorney·September 2026