IRS Audit Guide For Bail Industry

I found an interesting article on on UncleFed's website. It is reported to be the IRS technique guide for the bail industry. It is designed to be used when auditing a bail bond agent and/or company. The guide educates auditors on common terms used in the industry, the way funds change hands, and common pitfalls in record-keeping.

Bail Bond Power Grab

Bail Association Seeks to Strip Oversight by DIFP

The Missouri Professional Bail Bond Association, Inc., (MPBBA) is at it again this year. They have two bills floating around the Capitol this session, SB1247 and HB2454. Like past years, the association would like to pass legislation that will feed revenues to the association and require its continued existence. This year, the association is promoting a bail bond board. The association will nominate members to serve on the board. The association will have exclusive rights to provide initial and continuing education to bail and recovery agents, so your choice of education providers will be gone.

This is what the changes would mean to you and your bail bond business:

The language strips all authority from the Department of Insurance (DIFP) and transfers it to the newly created bail bond board.

There will be a $10 tax on every bond you write in the State of Missouri. This tax will be collected every time you write a bond. This tax will be distributed to pay the cost of collecting the tax and to pay the costs of the new board. There has been no published cost analysis to verify if this tax will even cover the costs for paying the board members, executive, investigative, and support staff, as well as other overhead of maintaining offices. (In Arkansas, the bail bond board tax is currently $70 with every level of government getting a cut of the tax.)

The association (there can only be one state-sanctioned association) will nominate 3 bail bond/general agents to serve on the board. A quorum to conduct business is 4 board members.

The board will be responsible for licensing, education, discipline, and rule-making for all bail and recovery agents. In other words, your competitors will be overseeing your business. There is no term-limit on the office of board member.

The association hopes you will overlook this power grab by telling you that this bill offers you a six month remission on judgments. Read the whole bill, not just the highlights published in the association newsletter.

I urge you to get involved this year. Read the bill and think about the consequences to your business. If you disagree with the philosophy of the bail association running your business through a board, I urge you to sign and return this petition. Let your voice be heard. Let those who represent you at the Capitol know that this is a flawed idea for the bail industry.

Analysis of Bail Bond Bills

Bart Cooper submitted the following analysis of SB1247 and HB2454. He owns Freedom Bonding, LLC, and Bart Cooper Bail Bonds in the Kansas City area. You can visit his website here.

Issues/concerns surrounding establishment of a “Professional Bail Bonds Board”

Overview: The bill strips the DIFP of authority to license, supervise, discipline and educate bail and recovery agents. Instead, such powers shall vest in a Professional Bail Bonds Board consisting of nine members (four general agents, two bail agents, one law enforcement officer, one circuit clerk and one public member). Members of the Board shall be appointed by the Governor.

Functional Concerns:

1) The DIFP structure for licensing, supervision, discipline & education is well-planned and substantial. The legislation sets forth no plans regarding infrastructure necessary to achieve the stated purposes. Apparently, legislative proponents assume that members of the board will possess the requisite expertise to create and maintain such an infrastructure.
2) No analysis exists regarding the financial solvency of the Board and its employees. The Board will be funded by imposing a ten dollar per bond tax on each bond written by a licensed agent. Notwithstanding the procedural difficulties in imposing and collecting such a fee, no evidence exists establishing the sufficiency of said fee. A review of other jurisdictions reveals a substantially higher fee per bond.
3) No ability to issue cease and desist orders exists.
4) No mechanism exists for policing the Board. The proposed legislation does not provide a solution should Board members act inappropriately. While the Governor may remove a Board member for just cause, no standards for just cause exist.
5) Discipline by the Board would likely be arbitrary and capricious. No standards exist for discipline. Since Board members would possess an economic incentive to discipline (eliminate) their competition, the expected result would be just that.
6) No mechanism exists for auditing Board members’ expenses.
7) While all “regular” meetings shall be open to the public, the legislation does not delineate what constitutes a regular meeting or what must be discussed at these meetings.
8) The bill requires attempted notice within 48 hours of a forfeiture being listed with the department. The language is problematic since there is no requirement that the department (assumed to be DIFP) notify the board. Additionally, actual notice is not required, only an attempt to notify must be made.
9) The bill fails to expand the 15-year felony clause to prohibit all felons from entering the bail industry.

Philosophical Concerns:

Individuals with an economic interest in reducing competition will be placed in the position to do just that. Nearly all will agree that the DIFP is a neutral party who gains no economic advantage in enforcing bail laws. Such transparency is vital to the legitimacy of enforcement. Most members of the Board, however, will benefit in seeing their competitors disciplined. Less bond agents means more bonds for the agents remaining in the industry. Thus, a clear economic benefit and an equally clear conflict of interest is present.

If you disagree with transferring the authority of the DIFP to a newly created bail bond board, please join us in making your opinion known. Download this petition, sign it and return it to the address listed.

Telephone Area Code/Prefix Locator

Here's a cool tool. This website will tell you the location and type of service for any telephone area code plus prefix. The service is free.

DIFP Licensing Actions

The DIFP has published the following licensing actions on its website:

The Administrative Hearing Commission has dismissed the complaint filed against the DIFP by John Garrett. In October 2007, the department refused to renew Garrett’s bail bond license. The DIFP’s order stated the refusal was issued because Garrett pled guilty to unlawful use of a weapon in 1996. Garrett received a SIS in the case and did not disclose the plea on his renewal application. Garrett then filed a complaint with the AHC asking for a hearing on the matter. However, he did not attend the hearing which was scheduled last February. The DIFP moved for a dismissal, which was granted by the hearing official at the AHC.

The AHC denied the DIFP’s motion to dismiss the complaint filed by Edward Loughary against the DIFP. The department refused to renew Loughary’s license, citing he had been convicted of mail fraud in US District Court in 1993. The order states that Loughary is disqualified for licensure because of the plea and for fraud and deception on his 2003 initial application for licensure. Loughary answered “yes” to the question concerning any felony convictions on his 2007 renewal application. But according to the Department, Loughary answered “no” to a similar question on his 2003 application. Loughary then filed a complaint with the AHC asking for a hearing on the matter. The DIFP filed a motion for dismissal claiming that Loughary’s petition did not set forth facts showing that he was entitled to be licensed. The AHC denied the department’s motion and the case is set to be heard on April 22nd.

The DIFP has filed a notice of dismissal against general agent Cynthia Saulmon and Afford Able Bail Bonds, Inc. The department’s dismissal states that it has been unable to locate and serve notice to Saulmon and/or her company. The DIFP's original complaint alleged that Saulmon committed fraud, deception, or misrepresentation by filing affidavits with the local court claiming real property they allege she did not own. According to the complaint, Saulmon had an investor who executed two quit claim deeds to Saulmon’s company for property he legally owned. Those deeds were recorded. On the same day, Saulmon executed two quit claim deeds back to the investor, but those deeds were not recorded. The Department alleged that when Saulmon executed the un-recorded quit claim deeds back to the investor, she no longer owned the properties. The DIFP alleged that the counties of Clay and Jackson relied on the properties which were listed in her general affidavit of qualification with the courts. The DIFP also alleged that Saulmon is subject to discipline for writing a bad check for license renewal to the State of Kansas. The DIFP asserted that Saulmon is also subject to discipline in Missouri because she was disciplined in Kansas under a similar statute and her license was revoked. The allegations were dismissed when the DIFP filed the notice of dismissal. Saulmon's license is listed as inactive on the DIFP's website.

Judgment List 3/7/2008

The bail bond unsatisfied judgment list is compiled by the DIFP and the Missouri Office of State Courts Administrator. The following companies appear on the list distributed on March 7th. The list is distributed to local courts via electronic means.

1) April Reeves, General Agent, Belton, MO-9 judgments totaling $10,000
2) L&C Investment Group, president-Douglas Cheatham of Blue Springs, MO, -no longer licensed-7 judgments totaling $105,800
3) Richard Kentner, General Agent, Lamar, MO- 1 judgment totaling $200
4) Regina Muwwakkil, General Agent, Kansas City, MO-1 judgment totaling $1,500

There are no agents, general agents, or companies reported with pending disciplinary action.

VA-Slain Bondsman was Alone and Unarmed

VIRGINIA-The Richmond Times-Democrat reports that bondsman James Woolfolk was alone and unarmed when he was killed last Thursday morning while attempting to apprehend fugitive James Carr. Woolfolk was found inside a residence with gunshot wounds to the back, head, and neck. He was shot from behind.

The State of Virginia requires a firearms endorsement in order to carry a weapon while performing bail bond or recovery work. Woolfolk, who has been licensed since 2007, had no endorsement.

Prosecutors say that Carr has admitted to the shooting. Carr has been placed in protective custody in an undisclosed facility.

Among other survivors, Woolfolk leaves behind a 14-year old daughter. Funeral services are scheduled for Tuesday at 1 pm.

VA-Bondsman Killed in Overnight Shooting

VIRGINIA- Bondsman James Woolfolk, age 38, was killed in an overnight shooting in South Richmond, VA. According to press reports, the bondsman was attempting to locate and apprehend fugitive James Carr. Police responded to a shots fired call and found Woolfolk with a gun-shot wound. He was pronounced dead at the scene. Police have taken James Carr into custody after a stand-off ended this morning . He was wanted for failing to appear in court and outstanding warrants for drug charges, trespassing, and obstruction of justice.

Our condolences to the friends and family of James Woolfolk.

AHC Issues Decision on Remand

The Administrative Hearing Commission has issued a decision on remand in the case of licensed bondsman Donald Christian. The case began when the DIFP filed a complaint against Christian in 2006 because Christian had been convicted of a felony drug charge 1998. The AHC ruled against the department saying that the DIFP used statutes in effect in 2006 in composing the complaint, and those statutes could not be used to discipline Christian because they were not in effect at the time Christian committed the offenses. The DIFP filed for judicial review of the decision in Cole County Circuit Court. The court concluded that retrospective application of the statutes did not violate any of Christian’s rights and that the licensing agency has a vital interest in safeguarding the public’s health and welfare. The court ruled that the Director had established cause to discipline the licensee and ordered the AHC to reverse its findings and make a decision consistent with the court’s judgment. The AHC then issued a decision consistent with the court’s finding and ruled that retrospective application of the statutes is permissible and the laws in effect at the time of application or renewal control the qualification of the applicant.

Previous Coverage
Court Reverses AHC in Christian Case
DIFP Files Petition for Review in Circuit Court
AHC Rules No Cause for Discipline in Christian Case

Services Announced for Bondsman

Bondsman Daryl L. Luecke., 53, of Westphalia, Missouri, died Tuesday, February 26, 2008. Services will be held today with a Mass of Christian Burial at 11:00 a.m at the St. Joseph's Catholic Church in Westphalia. In addition to writing bonds, Daryl served his community by being the Osage County Commissioner for 10 years. He also served as an Osage-Gasconade Health Department board member, Secretary for Meramec Regional Planning Commission, a substitute teacher at Fatima and area schools, had county government budget experience, a Missouri C.N.A. and C.M.T., and a care provider to the elderly.

He has been licensed since 2005 and worked under the authority of Dave Strassner.

PA-Bondsman Gets Probation in Shooting

PENNSYLVANIA-The Lancaster Intelligencer Journal reports that a bail bondsman who shot a fugitive in Lancaster was spared a prison sentence. Bondsman Dale Kauffman was sentenced to 5 years probation and ordered to stop working as a bail bondsman. Kauffman shot Moises Torres in 2006, as Torres tried to flee a home while Kauffman and another bail bondsman were in the home trying to detain him. Judge Louis J. Farina said a "deficiency in our system" allows bail bondsmen to be placed in difficult situations with dangerous criminals. "(Kauffman) was never trained," Farina said. "This points out a deficiency in our system, so I have some sympathy for your plight. We need to send a message to other bondsmen," Farina continued. "You are the first. I'm not aware of any case like this. And I want you to be the last." Kauffman pleaded guilty in December to aggravated assault and reckless endangerment. Torres was unarmed when he ran from the bail bondsmen, court documents say. Kauffman fired one shot from his 40-caliber handgun, striking Torres' right leg. The bullet shattered Torres' tibia, requiring him to undergo surgery and skin grafts, court documents say.

Defense attorney Herbert M. Crystle told Farina that Torres elbowed Kauffman in the throat before fleeing the home. Kauffman is a "good man," Crystle said, "who made a bad decision in the heat of the moment."

Kauffman spoke briefly before he was sentenced. "My intent was never to hurt anybody — but to bring him in," Kauffman told Farina. "I can't (change) what did happen. I'm truly sorry I injured Mr. Torres." Crystle told Farina that Kauffman has continued to work as a bail bondsman but no longer carries a gun.

Farina acknowledged writing bail was a source of income for Kauffman, but ordered him to cease practicing. "I have serious reservations about whether a convicted felon should be serving bail pieces," Farina said. Apprehending and detaining fugitives while unarmed could place a bondsman at risk, the judge said. "We allow you to be armed when you arrest dangerous people," he said. "There are rules people in your business need to be aware of and trained for. It doesn't excuse you — but it does mitigate.” “You are a good man. But, you made a very bad mistake here and seriously hurt somebody," Farina told Kauffman. "The system doesn't work when it lets people do what you did."

Services for STL Officer

Please keep the family of Lt. Robert Cooney in your thoughts and prayers. Rob was a 20-year veteran of the St. Louis Police Department and died from a fall at his home this week. Services were held yesterday.

Rob worked a dangerous job doing high-risk search warrants and commanded the department's Mobile Reserve, K-9 and Hostage Rescue units. He received three chief's commendations and two meritorious service citations for valor during his career with the police department.

He leaves behind a wife, two young children, brothers, a sister, parents, and many other grieving friends and family. I grew up with Rob. He led an exemplary life both on and off-duty. We will miss him.

Information on memorial fund for the Cooney children
Fox News coverage

IN-Bondsman Found Guilty of Confinement

The Goshen News, of Goshen, Indiana, reports that a six-member jury returned a guilty verdict in a case of a Goshen bondsman, who was accused of confining a driver and her passenger in a traffic stop. Bart Dewald was convicted of criminal confinement, a Class D felony. Dewald was searching for a woman who was out on a bond through his agency.

The Goshen News reported that bondsman Constantine Nichols was driving a white sport utility vehicle and passed two women in a minivan, then slammed on the brakes, forcing the minivan driver to stop suddenly, too. Then Dewald drove up behind the van in a red pickup truck. The bondsmen went to the front doors of the minivan and spoke to the two women inside, asking if they knew the whereabouts of the woman the pair were searching for.

The vehicle was blocked and the two men were at either front door, blocking the women from opening their doors. But the women did not know answers to the questions posed by the bondsmen. They were stopped for five to 10 minutes, the jury was told.

One of the women testified in the trial that she felt they were free to go at any time. The other woman testified that she contacted Goshen police after the incident and was told she should file a complaint with the state Department of Insurance. The criminal case was brought against the two bondsmen after an investigation by an officer in the county prosecutor’s office.

Judge George Biddlecome set sentencing in the case next month. Dewald faces a prison term of up to three years for conviction of a Class D felony. He was allowed to remain free on bond until the sentencing hearing.

PBUS Winter Conference 2008

PBUS (Professional Bail Agents of the United States) is holding its winter conference in Las Vegas on February 18-21 at the Luxor Hotel and Casino. Special speakers this year include news anchor Rita Cosby speaking on the power of the media and Congressman Robert Wexler. Also on the conference schedule is a presentation on national standards for apprehension, liability, and surrender. The conference also has several break-out sessions scheduled including the future of bail, special concerns of women in the industry, GPS monitoring, and a town hall discussion. There will be a vendor’s exhibit hall open throughout the conference.

Jackson's Bail License Revoked

Virgil Lee Jackson’s career in the bail industry has come to an end. The DIFP and Jackson entered into a consent agreement to revoke Jackson’s license. Late in 2005, the department filed a complaint against Jackson after he was arrested for conspiring to murder his competitor, Jerry Cox. In November 2007, Jackson was sentenced to 10 years in a federal prison after he entered a plea of guilty to the murder for hire charge. Jackson signed the consent agreement which states that he has permanently surrendered his license. The DIFP agreed to dismiss the disciplinary complaint pending before the Administrative Hearing Commission.

My previous Posts
Lee Jackson held on federal charges 4/1/2006
Dotson Arrested/New Charges for Jackson 6/2/2006
Dotson/Jackson trial postponed 6/8/2006
Arraignment 6/13/2006
Trial postponed again 10/28/2006
Dotson Freed on Bond 11/15/2006
Jackson Accused of Another Murder Plot 11/22/2006
January Trial Date Postponed 1/22/2007
March Date Postponed 3/19/2007
Jackson Pleads Guilty 8/13/2007
Dotson Faces New charges 8/27/2007
Jackson Sentenced 11/1/2007

*Accused co-conspirator Glen Dostson is scheduled to go to jury trial on March 3rd. Dotson's bail license expired last November. There are no published disciplinary actions or complaints against Dotson's license at this time.

Charges Against Avett Dismissed

All charges against Randall Avett in St. Louis County have been dismissed. On August 10th, Avett was charged with forcible rape, forcible sodomy, unlawful use of a weapon, and felonious restraint. Avett had been held in the St. Louis County jail with a $150,000 cash only bond. All charges were dismissed last Thursday.

Avett still faces charges in Jefferson County related to a fugitive recovery incident. Jefferson County Prosecutor’s office filed charges against three Missouri licensed bail bond agents and two other men. According to casenet, charges were filed against bondsmen Steven Morgan, Randall Avett, and Thaddeus Bibb. The prosecutor’s office charged the men with burglary, armed criminal action, felonious restraint, and property damage. The two unlicensed men, Brandon Morgan and Rudulph Whiston, were also charged on related offenses. The prosecutor alleges the men forced entry at a residence where they believed the fugitive to be staying. The fugitive was not at the residence and the residents denied knowing the suspect. The police were summoned by the residents and charges resulted three months after the incident.

Avett's bail bond license expired while he was in St. Louis County custody. As of today, his license has not been renewed. According to the DIFP website, there are no disciplinary complaints or actions against Avett's license.

Previous coverage
KSDK on St. Louis County Case
KSDK on Jeff County Case
Previous Post on St. Louis County Case
Previous Post on Jeff County Case

Boone County Bond Making Headlines Again

A $750,000 bond posted in Boone County for defendant Kristopher Prince, who is charged with 2nd degree murder, is making headlines again in the Columbia Daily Tribune. In September, McBee Bail Bonds posted the bond for Prince, who had been in custody for five months. The day after Prince made bond the prosecutor alleged that he had jailhouse recordings indicating that Prince may attack witnesses to the shooting. Additionally, Boone County Prosecutor Dan Knight said that after learning of Prince’s release from jail, he called the circuit clerk’s office and learned McBee’s agency didn’t have enough collateral to insure the $750,000 bond, with the family assets listed as $657,000. Prince’s bond was increased to $1,000,000 cash only and a capias warrant was issued. Prince was re-arrested the same day.

The Prince family and McBee Bail Bonds are now disputing the bail bonding agreement after Prince was re-arrested and his bond was raised to $1 million cash-only. The family filed a consumer complaint with the DIFP. The Tribune reported that the DIFP is investigating Arlie Nole Sr.’s bail bonding license and his work on the Prince case. The bond was posted by Stacy Nole, a 36-year-old bail bonding agent for McBee Bail Bonds. But the Prince family told the Tribune that they actually worked with Nole’s ex-husband, Arlie D. Nole Sr. Arlie Nole was not licensed at the time of the transaction. His bail license expired in January 2007 and was not renewed until October. Arlie Nole denies his involvement in the transaction. According to the Tribune, an investigative hearing will be conducted next Wednesday.

Knight also said that in light of the Prince bond, which he believes to be the largest ever posted in the county, his office would now be making more recommendations for cash-only bonds when dealing with suspects accused of violent crimes.

The 13th Judicial Circuit has since issued an order regarding the posting of bonds: "The Circuit Clerk should be contacted before a surety bond in excess of $250,000 is accepted. The Court may require additional collateral on any bond when it appears from the information available to the Court that the surety is without sufficient assets to cover the bond requested and all outstanding bonds for which the surety is liable."

Columbia Tribune Coverage
Murder Case Subject of Bail Squabble 1/24/2008
Murder Case Leads to New Bond Rules 2/6/2008

Previous Posts
High Bond Causes Dispute 1/25/2008
13th Circuit Issues Order on Bonds 1/6/2008

Bondsman Charged with Bribery

General bondsman Gary Darby, of Warrenton, has been arrested in Warren County with a felony charge of bribing a public servant in violation of RSMO 576.010. The probable cause statement alleges that Darby attempted to bribe a corrections officer by offering the county official money while conducting bail bond business at the jail. A court date has been set for February 25th.

Darby has been a general agent since May 2007. He has also held a bail bond agent license since 2003. Darby has 10 agents working under his authority.

Times Article Examines US Bail System

The New York Times published an article about bail system in the US. It is part of a series which also examines juveniles serving life sentences and accomplices in murders serving as much time as the murderer. The article examines the uniqueness of the US system and evaluates how the system works.

Be sure to view this graphic from the US Department of Justice showing that surety release results in fewer failure to appears and also fewer fugitives remain at large as compared to other forms of release.

USDOJ-full report

Licenses Revoked in Residency Case

The DIFP has ordered license revocation for Ulis Vickers, Kristin Vickers, and U&K Investments, Inc. The department adopted the ruling of the AHC, who ruled that the Vickers and their company had committed misrepresentation to the DIFP when they claimed on their licensing applications to be residents of Missouri when they were residents of Kansas.

Timeline of the case:

DIFP files Complaint with AHC-January 5, 2007
AHC Hearing Held 8/13/2007
AHC Orders Cause to Discipline 10/3/2007
DIFP Disciplinary Hearing 1/16/2008
DIFP Orders Revocation 1/17/2008