New Mexico-Removing Felons from Bail Bond Business

While we struggle to remove felons from the bail bond industry in Missouri, Tony Madrid is fighting the same battle in New Mexico. I’ve met Tony Madrid. He has been a leader in the bail bond industry for over 30 years.

Tony and Gerald Rodriguez met with members of the Public Regulation Commission to complain that licensing and enforcement in the state is so lax that convicted felons have been able to be licensed under numerous Social Security numbers and company names, despite laws that prohibit it.

Rodriguez and Madrid both said they have tried to raise their concerns with the state Insurance Division, which oversees licensing, but have not gotten an adequate response. “It is having an adverse effect on the people of New Mexico, the bail bonding industry, and it is also making a mockery of the state law," Rodriguez said. He also said a bail bondsman working in Farmington had his license revoked in Florida, and should not have been licensed in New Mexico.

Madrid said a bill was passed last year prohibiting convicted felons from obtaining a bail bonding license, but it was amended to allow those already licensed to stay in business. Rodriguez said even with that amendment, the Criminal Offender Employment Act of 1978 should be enough to prevent a convicted felon from getting a license.

Alice Garcia of the PRC Investigations Division said the state is looking into Rodriguez' complaints, but said the investigations take time. "As simple as it sounds, it is not," she said. "You have to hear everybody's side." Commission Chairman Ben R. Lujan said the PRC may need to "cast a wider net," as opposed to simply responding to complaints.

Commissioner David King said when he was working in the corrections industry, they had a policy not to hire felons, and to fire those who were hired by mistake. "They should not be working in this area, and if they are getting licensed we need to clean that up," King said.

Hearing Postponed on Insurance Bill

A hearing on the insurance regulatory bill, SB895, was scheduled for yesterday. The bill is a broad insurance bill which includes language for the regulation of bail bond licenses. As posted before, I support the Senate-approved version of the bill. However, the House committee substitute under consideration places new bail bond language in the bill which was requested by Senator Cauthorn. Cauthorn was not able to get the bail bond regulatory language out of the bill on the floor of the Senate, and threatened to kill the bill in his Fiscal Oversight Committee. The new language in the house substitute includes parts of the bail bond association bills SB885 and HB1997, sponsored by Senator Cauthorn and Representative Behnen.

The new language requires an agent to sign an affidavit if he leaves his current company. The affidavit must also be signed by the general agent he is leaving, stating that there are no premiums owed and that the agent (not the company) will be responsible for all future outstanding forfeitures and judgments. If the agent fails to satisfy a judgment, then his license will be immediately suspended. The new language does not address how the departing agent will handle uncollected premiums or how the agent will assume financial responsibility for future bond forfeitures and judgments entered against his/her former company. The bill also does not address what recourse an agent will have if his former company refuses to sign the affidavit allowing him/her to work. The new language also requires the Department of Insurance to issue photographic licenses.

The Senate-approved language removes the 15-year clause on felony convictions and gives the Director of Insurance the power to discipline a license holder without first getting approval from the AHC. Any discipline ordered by the department can be appealed.

The hearing was postponed because of time constraints. A hearing is expected early next week.

Insurance Department Press Release

The Missouri Department of Insurance issued a press release today regarding the discipline of AAAA Aces Bonding Company, Inc. In a previous post, you will find a link to the first hearing on AAAA Aces Bonding which was held in February. In the first hearing, the AHC found that the company had failed to satisfy bond judgments in southwest Missouri.

According to the department press release, the Administrative Hearing Commission held another hearing this month in order rule on discipline of the bonding company. The department recommended revocation of the company's license. The AHC ruling on the discipline was not disclosed in the release. The AAAA Aces, Inc. has been dissolved by the Secretary of State's office.

The press release and previous ruling did not address the officer of the corporation, Jerry Clay. There has been no action taken against him at the AHC. He no longer holds a bail bond license in Missouri.

The Joyce Decisions, Defining Bail Bond Law

The Missouri Administrative Hearing Commission, in two separate decisions on the same individual, has shaped and defined the Missouri law affecting the licensing of bail bond agents who are convicted felons. In a 1998 decision, the AHC ruled that although Phillip Joyce was a convicted felon, he should be granted a bail bond license. The commission said that the law prohibiting the issuance of licenses to felons was permissive and not a mandate. The Commission ruled that Joyce exhibited a good reputation in his new community,was resolved not to repeat his mistakes, and was candid about his convictions. The AHC concluded that these factors outweighed the felony convictions and granted him a license.

Two years later Joyce applied for a general bail bond license and his application was denied by the Department of Insurance for the same reason, felony convictions. Again, Joyce appealed to the AHC. This time the AHC ruled in favor of the Department of Insurance. The AHC ruled that the wording of the applicable statutes and Missouri Supreme Court Rules prohibited the issuance of a general bail bond license. The commission said that a general bail bond agent shall meet the qualifications for surety on bail bonds as provided by supreme court rule..... and supreme court rule 33.17(c) states that the surety has not been convicted of any felony under the laws of any state or the United States.

Since these decisions were handed down, the Department of Insurance has granted bail bond licenses to felons, but won't grant a general license to convicted felons. It will be interesting to see how the AHC decides the bail bond cases before the commission next month. (See March archives for information on these cases.)

Bail Bond News From Other States

Credit Bonds in California- A bill (AB2368) under consideration in the California Legislature would prohibit extending credit on bail bonds. The bill was defeated in committee.

Credit Bonds in Arkansas- Judge Willard Proctor Jr. issued cash only bonds in an effort to thwart the extension of credit on bail bonds. The decision came after hearing Pulaski County Deputy Prosecuting Attorney Barbara Mariani’s concerns about the practice of credit bonding. State law requires a bonding company to charge defendants 10 percent of the total bail, making the cost of a $250,000 bond $25,000. Discounts are against the law, but credit bonding is legal and allows defendants to pay upfront only a portion of the 10 percent requirement, known as a premium. Defendants then pay off the difference over time. The upfront portion can be as little as 1 percent, Mariani said. Bail is intended as a financial guarantee that a defendant will show up for court if released from jail. A bond is the legal agreement to secure the guarantee. Higher bonds are more effective at ensuring defendants come to court, Mariani said. “You are much more likely to show up if you’ve got $25,000 riding on it rather than just $1,000,” she said. Bond costs also are an issue for defendants with public defenders. “If someone makes a $250,000 bond, why is the public still paying for an attorney?” Mariani said. Credit bonding came to the attention of prosecutors last month after a Little Rock murder suspect jailed for nine months and unable to make bond was accidentally released for four days. The defendant was returned to custody and promptly made a $250,000 bond through credit bonding, Mariani said. At a hearing last month, he said his family put up the money. He said he needed a public defender because he still couldn’t afford a private lawyer.

Tennessee Bondsman Convicted- Bondsman Roy Lee Parker offered a police officer a $1,000 bribe on behalf of his client to make a DWI arrest disappear. The Tennessee Bureau of Investigation was alerted. Parker cooperated with the TBI and was later convicted of bribery and tampering with evidence. His client was convicted of bribery. Article here.

Kansas City: Shots Fired At Bondsmen

According to this report in the KC Star, shots were fired at several bondsmen attempting to apprehend a fugitive. The bondsmen approached an apartment complex as shots were fired through the door. No one was hurt in the incident. Police were dispatched to the scene.

Bail Bond Form Changes Effective July 1, 2006

In an order dated December 20, 2005, the Missouri Supreme Court issued changes to the bail bond qualification forms used in local courts. The changes will take effect on July 1, 2006. The new forms are available on the court's website.

Undercover Agent's Perjury Overturns Drug Cases

Michael Isenberg, a former undercover narcotics officer with Cole County Sheriff’s Office, pleaded guilty to statutory sodomy 8 weeks ago, then he was convicted of perjury Monday afternoon in an unrelated case.

The perjury case stemmed from three confidential informants, who gave sworn statements that Isenberg was not present during the drug sale transactions, contrary to Isenberg's sworn, courtroom testimony.

Cole County Prosecuting Attorney Bill Tackett said his office notified the court after discovering that Isenberg lied at Chism's trial. As a deputy, Isenberg played a role in 140 cases which Tackett's office had to review. The court set aside the judgment in 40 of those cases and released 18 people who had been convicted.

Isenberg, now 31, already is serving a 120-day “shock” prison sentence for his Feb. 17 guilty plea to one count of second-degree statutory rape case, and faces a five-year sentence in that case if he doesn't successfully completes the “shock” sentence, or violates conditions of his probation. He received five years probation in the perjury case.

Missouri Meth: Labs Down, Trafficking Up

Two recent articles, the Columbia Missourian and the Springfield News Leader, both report that while Missouri meth labs have declined, imported crystal meth is on the rise in Missouri. The Missourian reports that the border at El Paso, Texas has seen a 479% increase in meth over the last three years. Both articles report that imported crystal meth is far purer and more addictive than the locally produced powder. The News-Leader reports that meth is crossing socio-economic levels, reporting that a school board member from Nixa was recently arrested for possession of methamphetamine.

Bounty Hunter News Article

Here is a link to a very nice article in the Herald-Mail concerning professional bounty hunters serving the tri-state region of Maryland, Pennsylvania, and West Virginia. The article accurately depicts most bounty hunters and points out that most apprehensions are peaceful. It also profiles the laws of various states as well as the bounty hunters' role with law enforcement.

How Felons Become Bondsmen

There has been much talk recently in Jefferson City about how felons can get state issued bail bond licenses. The answer is not so easy to explain.

Before 1983, anyone could write bail in Missouri after filing the proper qualifications with the local court. The procedure was outlined in Supreme Court Rule 33. The qualifications for surety on a bail bond are further outlined in rule 33.17:

A person shall not be accepted as a surety on any bail bond unless the person:
(a) Is reputable and at least twenty-one years of age;
(b) Has net assets with a value in excess of exemptions at least equal to the amount of the bond that are subject to execution in the state of Missouri;
(c) Has not been convicted of any felony under the laws of any state or of the United States;
(d) Is not a lawyer, except that this disqualification shall not apply if the principal is the spouse, child or family member of the surety;
(e) Is not an elected or appointed official or employee of the State of Missouri or any county or other political subdivision thereof, except that this disqualification shall not apply if the principal is the spouse, child or family member of the surety; and
(f) Has no outstanding forfeiture or unsatisfied judgment thereon entered upon any bail bond in any court of this state or of the United States.

Rule 33.20 addresses corporations or insurance companies that write bail:

(a) Any corporation, association, or company formed under the provisions of section 379.010, RSMo, for the purpose of making surety insurance shall be qualified to act as a surety upon any bail bond taken under the provisions of these rules upon presenting evidence satisfactory to the court of its solvency. Any such bond shall be executed in the manner provided by law.(b) An agent acting on behalf of such a corporation shall be subject to the qualifications set forth in Rule 33.17(c), (d), and (e), and, in addition, shall be licensed as a bail bond agent as required by law.

In 1983, the Legislature passed the Bail Bond Licensing Act. The qualifications for licensure were:

374.715 ...Each application shall be accompanied by proof satisfactory to the department that the applicant is a citizen of the United States, is at least twenty-one years of age, and is of good moral character.

In 1997, the legislature tried to tighten the requirements by adding the words "and meets the qualifications for surety on bail bonds as provided by supreme court rule."

The devil was in the details. The word surety was never defined in the statutes but was later defined through administrative hearings, case law, and attorney general opinion. The word surety has been defined as the general bondsman or corporation licensed by the state, who pledges his assets as security to the court in order to write bail bonds. The "surety" is NOT any agent working under the supervision of a general agent or corporation. Thus, the Administrative Hearing Commission has ruled, in two separate opinions, that bail bond agents are not the "surety" as described in Supreme Court Rule and state statutes. Therefore, the Department of Insurance started granting licenses to bail bond agents who were convicted felons, but not general agents.

In 2004, the Missouri Professional Bail Bond Association backed legislation that changed the section dealing with the discipline of license holders. Previously, the law said that the department had the right to refuse to issue or renew any license for, "having entered a plea of guilty or having been found guilty of a felony." (A provision, in my opinion, which should have kept felons out of the business in the first place.) The association backed SB1122 (2004) changed the language so that the department could refuse to renew or issue licensing if the licensee had "final adjudication or a plea of guilty or nolo contendere within the past fifteen years in a criminal prosecution under any state or federal law for a felony or a crime involving moral turpitude whether or not a sentence is imposed, prior to issuance of license date." Bill sponsor, Rep. Bob Behnen (R-Kirksville), acknowledged that the 15-year provision seemed to have been crafted to help someone. "My guess is that it was probably drawn for a particular individual," he said in an article appearing in the St. Louis Post-Dispatch. Virgil Lee Jackson contributed to Behnen's campaign and hired lobbyist Steve Carroll. One might presume this language helped him, since he was a convicted felon who had been denied a general bail bond license.

I have talked extensively in previous posts about the legislation in Jefferson City this year. The Department of Insurance is backing legislation (SB895) which strikes the 15-year provision and the "prior to issuance of license date." You can't be a felon, period. The bill also strengthens the DOI's ability to discipline license holders, instead of having to wait until the licensee renews his license. The Missouri Professional Bail Bond Association opposes this language.

The association is sponsoring their own bill, SB885, which allows felons to have a bail bond license as long as the licensee is not convicted of a "dangerous" felony. See post below.

Lee Jackson Trial Scheduled

The federal trial of Virgil Lee Jackson has been set for June 12, 2006. Jackson has been in federal custody since last October on charges of being a felon in possession of a firearm, after the ATF uncovered an alleged murder-for-hire scheme orchestrated by Jackson. The US Attorney alleges that Jackson wanted to murder his competitor, Gerald Cox, because Jackson believed Cox had told the local courts that Jackson's bail bond company was fraudulent. Jackson operated under two bail bond corporations, neither having a Missouri corporate bail bond license. One of those companies, Missouri National Surety, Inc., lists Jackson as its President. The other company, American Guarantee Surety, Inc., previously listed Jackson as the Vice-President.

Cauthorn Amendment: Bail Bond Language in SB895

Senator Cauthorn R-Mexico, filed an amendment to SB895 seeking to remove the bail bond language out of this regulatory bill. The bill was discussed in the previous post. Cauthorn's amendment was defeated today in the Senate. During debate, several senators expressed concern over bail bondsmen who have criminal histories. Cauthorn stated the current law provided that bail bond agents must meet Supreme Court Rule 33.17 which address felons writing bail bonds. The Supreme Court rule actually states that a “surety” cannot be convicted of a felony. The Administrative Hearing Commission (AHC) has previously ruled (the Joyce decision) that this rule only applies to general bail bond agents (surety) and NOT the bail bond agents that working under the generals’ authority. Bail bond agent licenses comprise over 85% of all types of bail bond licensees in the state. The bill also give the Department of Insurance the ability to sanction bail bond licensees without first getting approval before the AHC. The bill was perfected and will be up for a final vote of the Senate.

Bail Bond Changes on Senate Calendar

The Senate has placed SB895 on the perfection calendar. The bill is a broad insurance bill with several changes to the bail bond industry. The bill removes the clause which allows convicted felons to have a bail bond license. The new language allows the Director of DOI to suspend, revoke, refuse to issue, or refuse to renew an agent license. Previously, the Department could only file a complaint with the Administrative Hearing Commission. Any bail bond or general bond license subject to Department discipline can be classified as a level two violation and subject to a $1,000 dollar fine. Surety recovery agents can be fined up $5,000 per violation. The Director may also refer the case to the Attorney General or a county prosecutor for criminal prosecution. Department licensing decisions can appealed to the Administrative Hearing Commission.

The bill is sponsored by Senator Engler of Farmington. The House companion bill is HB1651.

Update 4/20/2006 SB 895 was passed by the MO Senate today and was first read in the House.

Utah Supreme Court Hears Out-of-State Bounty Hunter Case

The Deseret News reports that Utah Supreme Court recently heard a case that debates whether a licensed out-of-state bounty hunter could apprehend a fugitive in Utah. Utah Supreme Court Chief Justice Christine Durham said she saw a "hole in public policy" in Utah's laws that did not address bounty hunters from other states and if they could legally make arrests in Utah. Durham also expressed concern that if Utah forbade out-of-state bounty hunters from making arrests, other states, such as Colorado, could follow suit, making capturing fugitives fleeing justice more difficult. Attorney for the bail company, Julianne Blanch, said the tradition of bounty hunters being able to cross jurisdictions dates back to 19th century law where a signer of a bond contract is "on a string" and that a bondsman has jurisdiction over him "wherever he may go." Blanch admitted that Langley(bounty hunter) entered the Lee (fugitive) residence "under false pretense" but pointed out that he was trained and licensed in Colorado at the time. During the Utah trial, Langley testified that he had apprehended several Utah residents before. Justices noted that they may recommend that the Utah Legislature clarify its position on out-of-state bail bondsmen. A ruling is expected in the coming months.

The appellant court said that the defendant could not dispute the bail company's authority to arrest him under the bail contract despite Langley's lack of a Utah bail enforcement agent license. The trial court also properly dismissed the family members' claims for false imprisonment.

Senate Committee Hears Bail Bond Bill

Missouri Senate Judiciary Committee recently heard testimony on Senate Bill 885. This bill is backed by the Missouri Professional Bail Bonding Association (MPBBA). The bill is sponsored by Senator John Cauthorn (R). Speaking in favor of the bill were MPBBA president, Jack Allison and his lobbyist, Steve Carroll.

Speaking in opposition to the bill was the Honorable Gary Lynch, a judge of the Missouri Southern District Court of Appeals. Judge Lynch opposed the language in the bill that allows bondsman to be released from a bond if it becomes “physically impossible for the defendant, bail bond agent, or surety to satisfy the conditions of the bond through no fault of the bail bond agent.”

Also speaking in opposition to the bill was a representative of the Missouri Department of Insurance, who said that portions of the bill would conflict with Department sponsored SB895 and the bail bond bill would undermine provisions of SB895.

I spoke only about the provision of the bill that would allow convicted felons to become licensed agents. Missouri Department of Insurance is currently seeking discipline on several licensees who are convicted felons. This bill would allow convicted felons in the business as long as they did not meet the statutory definition of “dangerous.” Dangerous felons are defined primarily as felonies against a person that result in physical injury. Examples of crimes NOT considered dangerous would be production or distribution of drugs, fraud, child pornography, etc.

The Legislative Committee of the Missouri Bar also published opposition the bill, stating that the bill seeks to supersede existing Missouri Supreme Court Rules and judicial authority.

One senator on the committee said that the Missouri prosecutors expressed concern over the provision of the bill that allows bondsmen to write bail for defendants whose bail has been set as “cash only” by the court.

The bill is still in committee.

A House companion bill, HB1997, has been filed by Rep. Bob Behnen (R). Behnen's bill is assigned to the committee he chairs, the Professional Registration Committee. The bill is not on the hearing schedule at this time.

Missouri Ranks 47th in Indigent Defense Spending

According to a report funded by the Missouri Bar Association, the state's public defender system is in crisis. The Missourian reports that the average caseload per defender is 298, while state funding has been stagnant for five years. This has resulted in a 100% attrition rate over the same five years.

MO Using GPS to Track Offenders

Last year, Missouri became one of the first states to require GPS tracking for parolees and probationers convicted of certain sexual offenses. This year, the MO Department of Corrections is piloting a program for those convicted of certain dangerous felonies. The sofisticated program will send an email to the probation officer if the parolee is located in area determined to be off-limits. See the article here

Where's Lee?

Virgil “Lee” Jackson is the perfect example of why Missouri should not allow convicted felons to possess a state bail bond license. Jackson continues to be detained by the federal authorities after his federal arrest last October. Jackson was arrested after the ATF discovered his alleged participation in a murder-for-hire scheme. Jackson sought to hire a hit-man to murder his long-time rival Gerald Cox. According to the St. Louis Post-Dispatch, Jackson has a string of convictions: burglary in 1959, burglary in 1967, forcibly breaking into a post office in 1971, and first-degree robbery in 1984. Even so, he received a license from the Missouri Department of Insurance in 1996 to act as a bondsman.

The Department of Insurance responded to Jackson's arrest by filing a complaint with the Administrative Hearing Commission seeking to discipline Jackson. That hearing will be heard later this summer.

Missouri should not allow convicted felons to post bail in our courts. It is a tremendous responsibility to have the power to grant or revoke the personal freedom of another human being. This responsibility should not be granted to those with the propensity to abuse it.

Should felons be bondsmen?

A review of state statutes across the US confirm that most states strictly prohibit felons from obtaining a bail bond license. Only five states, including Missouri, allow it. Research from all fifty states reveal that 35 states require state-level licensing. The other 15 states require bondsmen to qualify through the local court system. Of the 35 licensing states, thirty states require the license applicant to be free of any felony criminal conviction. Missouri should follow this trend. It is good policy for the citizens of Missouri.