Bail bond agents are increasingly helping cash-strapped defendants get out of jail with ultra-cheap financing deals, a practice that worries law enforcement officials and insurers, and could endanger public safety.
To bolster their businesses during the recession, a growing number of bondsmen nationwide are requiring upfront payments that are only a fraction of the customary 10 percent premium amount — sometimes with no collateral. In exchange, the accused agree to make up the difference on credit cards or monthly installment plans.
While such financing is legal in all but a handful of states, law enforcement officials and politicians fear it undermines defendants' incentive to show up to face charges. Insurance companies that back the bonds are also concerned about the potential for escalating bail forfeiture rates, which are currently estimated at less than 5 percent.
"When you have a bail bond that's half a million dollars and you can get out with 1 percent down, that's pretty scary," said Bill Lee, a San Bernardino County deputy district attorney who prosecutes bail bond cases.
Based on publicly available documents, it is nearly impossible to determine whether the recent rise in bail-on-credit is causing an increase in bail jumping, experts say. That is partly because courts use widely varying ways to record defaults, and even then the data is delayed by the fact that bounty hunters in many states have months to catch absconders before a default is recorded.
In California, for example, they have up to a year to catch bail jumpers, while in states such as North Carolina, Maryland and Connecticut, it's up to six months. Moreover, any payment deals struck between defendants and bail bondsmen are protected by privacy laws.
"We don't know how many bonds are being forfeited," said Timothy Murray, director of the Washington, D.C.-based Pretrial Justice Institute, which has tried unsuccessfully to track the issue.
The financing of bail bonds first popped up a few years ago, but bond agents say the tight economy has made the tactic so commonplace it now makes up as much as half the bonds they write.
It is particularly pronounced in California, where bail amounts are the highest in the nation and the housing crisis has made it difficult for people to use their homes as collateral. Regulation is also more lax in California than other states, a few of which ban bail-on-credit or ban commercial bonding entirely.
Agent Jose Marquez, of Signature Bail Bonds in Santa Ana, said he's turned down some bizarre deals of late: one man offered his beloved 15-year-old pooch as collateral. Marquez is financing twice as many bonds on credit than a year ago — and he feels pressure to cut deals to stay afloat.
"Before, it was only a fraction of them that wanted credit, but now it's the first thing they ask for," Marquez said.
Rules vary by state, but generally bail agents require about 10 percent of the bail amount before posting bond for a client. The premium is nonrefundable and bondsmen must pay a cut of it to insurers who back the bonds in case defendants flee or bondsmen default.
Joe Mastrapa, a Miami bondsman who does business nationwide as bailyes.com, said clients using financing has shot from 1-in-20 before the downturn to 1-in-4 now. He recently let a defendant's family put down less than 3 percent on a $75,000 North Carolina bond.
Defenders of premium financing say the tactic prevents discrimination against the poorest defendants and helps alleviate jail overcrowding.
"Bail is a constitutional right," said Tony Suggs, spokesman for the California Bail Agents Association. "A lot of people cannot come up with that $4,000 or $5,000."
Seventy-four-year-old Robert Buchel recently bailed out his grandson with $500 down on a $10,000 bond, with monthly payments of $100. Waiting anxiously in the visitors' room of the Orange County jail, the retired Anaheim Hills mortgage broker said he hoped the young man could reimburse him for the monthly installments.
Some longtime agents condemn the rush to bail-on-credit and compare it to the fast-and-loose practices in the housing market just before its spectacular slump.
Some insurance companies that back the bail bonds are also concerned that premium financing could leave them responsible for more forfeited bonds, said Steve Krimel, a consultant for Accredited Surety and Casualty Inc., based in Orlando, Fla., and a retired attorney.
Krimel said it's too early for insurers to notice a spike in forfeitures, but premium financing is a trend that's now frequently mentioned in company projection reports. He has doubts about the long-term viability of bail agents who routinely offer discounts.
"You can't run an agency on a 5 percent premium flow," he said.
It's also too early to tell how the increased financing will affect the criminal justice system because most state courts don't keep statistics on bail jumpers and have no way of knowing how a defendant comes up with bail money. A number of judges and prosecutors interviewed by the AP said they weren't aware of the riskier financing.
"If the bond is $10,000, it's set and we're out of the picture," said Ed Griffith, spokesman for the Miami-Dade County state attorney's office in Florida. "The whole liability is on the bondsmen, it's their business."
That lack of oversight bothers Diane White, whose 61-year-old father was killed two years ago in a head-on collision with a man free on financing who was driving a stolen car the wrong way on a San Francisco freeway.
"If they'd have done what they were supposed to do, he'd still be alive," White said. "It's like an empty feeling."
In another recent case, a suspect with a long rap sheet who was free on credit crashed into a San Francisco police cruiser, killing the officer.
Several California lawmakers have proposed legislation to regulate bail financing, but the bills — vigorously opposed by the industry — have died in committee. No states have passed new bail bonds legislation since 2005, said Sarah Hammond, an attorney at the National Conference of State Legislatures.
Some bondsmen see another unsettling trend growing out of the move to bail-on-credit: the threat of re-arrest for defendants who fall behind on their payments. That's the kind of practice that could further damage the industry's already shaky reputation in a toxic economic climate, said Krimel.
"That's become an ethical question," he said. "And you're going to see a lot more of that type of dispute as the recession goes on."