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Bail Bond Payment Plans Face Scrutiny, Criticism in New Jersey

In May 2014, New Jersey’s State Commission of Investigation (SCI) concluded a “broad-based” probe into the state’s bail bond industry for allowing criminal defendants to get out of jail with lower upfront costs and weekly or monthly payment plans, a law enforcement source told the Newark Star-Ledger.

“You have to keep up with the market because if you don’t, you’re going to be out of business,” Glenn Johnson, who manages Right Away Bail Bonds, said of bailing out defendants with little to no down payment.

But while the new bail schemes are frustrating prosecutors who rely on pretrial detention to coerce defendants into unfair plea bargains, they are also forcing friends and family who have co-signed for the bonds to take over payments if a defendant is convicted or jumps bail.

Before the payment-plan trend, defendants were typically required to pay 10% of the bond amount set by a preliminary or trial judge, in cash.

If bond was set at $100,000, for example, a bail bondsman required a defendant to pay a premium of $10,000 to get out of jail – a payment that was not refundable even if he or she was eventually found not guilty.

Now, some defendants are getting bailed out on payment plans of $75 a week or, as Aaron Bail Bonds in Hackensack, New Jersey advertised on its store-front window, “$0 down payment.” ASAP Bail Bonds next door claims “Instant 0% approval.”

“We’re concerned that the percentages are getting smaller and smaller and smaller, to 3% or less. It still remains such an unregulated industry,” said Gene Rubino, acting chief of staff for the Hudson County Prosecutor’s Office.

A bail payment plan got Rasul McNeil-Thomas out of the Essex County Jail in October 2011, five months after he allegedly killed William Johnson, a 45-year-old off-duty Newark police officer. A judge reduced his $1.5 million bond to $250,000, and a bail bondsman gave his family a deal to get him out, resulting in public outcry.

A year later, however, McNeil-Thomas was returned to jail when his family couldn’t afford to make the bond payments. Jersey City’s Ace Bail Bonds then stepped in, took $7,500 from McNeil-Thomas’ family as a partial payment toward the $25,000 premium and accepted his mother’s home as collateral for the rest of the bond. The remainder of the premium, according to a bail hearing transcript, would be paid in monthly installments of $400 to $450.

When a judge increased the bond to $500,000, the deal with Ace fell through. McNeil-Thomas was later convicted and sentenced to 60 years in prison in April 2015.

Rubino said bond payment plans are also helping defendants get around a 2007 state law that requires them to prove the money they put towards bail is legitimate. The lower the down payment, the easier it is to prove the money is not dirty.

“As the percentages they’re asking for as down payments decrease, the more difficult it becomes for the state to learn the legitimacy of the funds,” Rubino stated.

In 2004, New Jersey legislators voted down a bill which would have required that no less than 10% be posted upfront for a bond premium. Lawmakers believed that such a requirement discriminated against the poor. But Ron Olszowy with Nationwide Bail Bonds, who lobbied in favor of the bill, said those concerns were misplaced.

Many of the co-signers on bail payment plans, he noted, are “one step above indigent.”

“If you want to feel sorry for someone, feel sorry for the people who get roped into these 1% deals,” Olszowy said. “It’s making it hard for these people to survive.”

Such was the case for 23-year-old Gregory Hargrove, a fast-food worker in Newark who co-signed for his childhood friend, Gene Williams, on an $80,000 bond in February 2010 after Williams was arrested for aggravated assault and unlawful possession of a handgun.

Williams agreed to pay Aaron Bail Bonds $100 a week toward the $8,000 premium, and made at least several of those payments until 10 months later when he pleaded guilty to the gun charge.

After Williams’ conviction, Aaron Bail Bonds sued Hargrove for the rest of the premium. In May 2013, Hargrove was told by an Essex County court that he had to pay nearly $6,400.

In a letter to the court, Hargrove wrote that he was paying child support for two children and in legal trouble himself, and that he was “not in the condition or making enough money to help make payments for [Williams’] bail bond.”

“People who work hard and are trying to do the right thing, they shouldn’t take that big amount from you,” Hargrove told the Star-Ledger. “That’s too much. If I had known they were going to hit me for the $6,000, I would have gone to the judge.”

Every week, Hargrove said, $100 is taken out of his paycheck to cover Williams’ bond premium while Williams now sits in prison.

Meanwhile, the SCI report found that a lack of government regulation had allowed previously prohibited bail bond businesses back into the industry. These bail bondsmen allegedly employ prisoners inside county jails to recruit new clients among recently-arrested defendants. The recruiters, or “runners,” are often trustees with greater access to jail common areas; the bondsmen reimburse the runners with cash and other benefits.

Some bail bondsmen said they dislike making payment-plan deals or collecting from co-signers. But they do it, they claimed, to keep up with competitors. Bail industry veterans agreed the state should intervene and enact stricter regulations.

“It’s cutthroat,” said A1 McCallen, the owner of Ace Bail Bonds. “These guys want it all. They’re greedy.”

In its report, the State Commission of Investigation called for more stringent regulations prohibiting the use of prisoner “runners” and other unlicensed individuals to bring in bail bond business. Other recommended changes included the elimination of filing fees when posting or discharging bail, and criminalizing the already-borderline illegal three-way phone calls some bondsmen offer prisoners as an incentive to sign with them.

The SCI also recommended that oversight of the bail bond industry be moved from the Department of Banking and Insurance to the Department of Law & Public Safety under the Office of the Attorney General.

The SCI report exposed a myriad of flaws and loopholes in the state’s bail bond system, and prompted the approval of 2014 state ballot questions on bail reforms. The main purpose of the reforms was to shift the focus of bail bonds from money and income to risk and public safety considerations.

“In the past, those who could afford to pay were released and those who could not stayed incarcerated,” Judge Stuart Minkowitz told the Morris County freeholders in September 2015.

In March 2016, Camden, Morris, Sussex and Passaic counties began introducing some bail bond changes as part of a pilot program before the bail reform laws go into effect statewide on January 1, 2017.

Millions of dollars will be needed to acquire enough staff and resources to implement the reforms, and it is undetermined where that money will come from. Passaic County has increased court filing fees to generate additional revenue needed to fund the changes, while other counties are considering reallocating funds from other areas to cover the costs of bail reform.

One potential solution? Impose fees on bail bond companies.



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