Tuesday, February 26, 2008

Critics Slam Low-Cost Maryland Bonds

People charged with crimes generally can get out of jail by paying a bondsman 10 percent of the bail set by the courts. But many in Maryland are walking free by paying much less - in some cases as little as 1 percent - to bondsmen willing to offer a discount.

These cut-rate bails are a common practice, leading to thousands of people accused of serious offenses going free on far less bail than some judges and the public realize. State regulators and city prosecutors say they are troubled, but bondsmen argue that such price reductions are necessary to remain competitive in a cutthroat industry.

It is legal as long as the bondsmen have the accused or their friends or family sign promissory notes agreeing to pay the full 10 percent fee and the bondsmen make "good- faith efforts" to collect the money. Some don't, and the Maryland Insurance Administration, which regulates the bail industry, has fined five bondsmen for it since 2003.

Baltimore State's Attorney Patricia C. Jessamy said bail bondsmen are making "a mockery" of the system.

"Somebody gets a big bail, $500,000, and gets out for 1 percent," she said. "If that doesn't defeat the purpose, I don't know what does. ... The whole system needs to be reformed."

Del. Robert A. Costa, an Anne Arundel County Republican, wants the law changed to make it a misdemeanor for bail bondsmen to fail to collect the full 10 percent fee upfront. This, he argues, would end a dangerous practice that undermines judges and puts the public at risk by making it easier for suspected criminals to get out of jail.

He said he sought the change after his ex-wife's brother paid a bail bondsman 1 percent to get out of jail and then fled to Florida. The man is wanted in Anne Arundel County.

The bail bond industry "was very angry that I was introducing the bill," Costa said. They said, "How dare I interfere with their business. It's their choice if they want to do this or not. And I said, 'Not if it's putting defendants back on street to continue to commit crime.'"

Costa withdrew the bill this month, saying that he did not have enough research to win a battle against the lobby. He said he plans to try again next year after gathering more information.

One person who took advantage of the discounted bails was Brian Compton. A Baltimore County judge set his bail on an armed robbery charge at $75,000. Compton hired Big Boyz Bail Bonds.

On paper, the company charged Compton 10 percent of the bail - $7,500 - to free him. That rate, which is set by the insurance company contracted with Big Boyz and enforced by the state, cannot be changed by individual bondsmen.

But Compton did not pay anywhere near 10 percent. He and his family handed Big Boyz $750 and signed promissory notes for the difference. Court records show that Compton walked out of the county detention center two days after his arrest.

Court records also show that Compton, 25, his stepmother and father owe Big Boyz the $6,380 remaining on the promissory notes, plus $1,276 in attorney fees and $120 in court costs. Collecting that money is often difficult because friends and relatives of suspects co-sign the promissory notes but expect the suspect to pay the rest of the bill once freed.

"We told the bondsman we were not going to be responsible, but obviously we didn't read the paper," said Compton's stepmother, May Rorie of Baltimore. "We signed our name on something without reading everything in small print. ... I don't see why we have to be in charge of paying the bill. Brian [Compton] should be paying the bill."

Bail bonds are a big business in Maryland. Court records show there are more than 1,000 bondsmen in the state. In 2001, according to Douglas Colbert, a law professor at the University of Maryland, the industry took in an estimated $100 million to $150 million.

Bail bondsmen complain that the 10 percent minimum fee, which is set by their insurance underwriters, is a hardship for many clients.

"If your brother was locked up on a $10,000 bail, and you could pay $300 or $1,000, which one would you do?" said Barry Udoff, president of the Maryland Bail Bonds Association, who also runs the day-to-day operations of Fred W. Frank Bail Bonds in Baltimore.

"Requiring us to collect the 10 percent fee upfront would cause companies like ours to go out and open a premium finance company," Udoff said. "You'd go next door, borrow the money, walk back into the bail bonds office and pay the full fee. Not only the full fee, but interest on it, like a car loan. We'd make more money if that happened."

Sonya Rogers is handing over $75 per week to pay off a promissory note on a $150,000 bail to Big Boyz. She was arrested in August on drug distribution charges and said court officials are setting bails that are not "fair and reasonable," which is driving the industry to offer discounts.

"If a bail bondsman isn't getting the full 10 percent, that's his business and it's how he eats," said Rogers, 23, who lives in Southeast Baltimore. "If he decides to take less money, who is he hurting? I thought people were innocent until proven guilty."

The authority for bondsmen to free people, such as Rogers, on credit comes from a 1997 ruling by the Maryland Court of Appeals. According to the insurance administration, the decision left the state with rules that are difficult to enforce.

Simply not collecting the full 10 percent fee isn't enough to violate the law. The state has to prove that a bondsman hasn't tried to collect it, which is difficult, said Todd Cioni, associate insurance commissioner for compliance and enforcement.

Cioni said a bail bondsman could cut a deal for a 5 percent fee and then warn the defendant that he would receive a few meaningless letters demanding the remaining 5 percent, which the defendant could ignore. The letters are sent only to deceive regulators, Cioni said.

"There's no strict criteria; it's not like a Visa card," he said. "Some of these folks don't promise to pay 'X' amount on the 15th of every month. And when we ask, 'When does the defendant have to pay?' They say, 'When the defendant has the money.'"

Cioni's staff has the power to walk into any bail bonds office and order bondsmen to open their files. But Cioni has only one employee assigned to regulate the industry across the state.

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