Bonds Away

The amount of forfeited bail bonds grows, and nothing is done

Maybe John Burns is just a bad judge of character. For years, Burns worked as an independent bail bondsman, but it seems too many of his customers were failing to appear in court. According to records of the Harris County District Clerk, when the county's Bail Bond Board finally jerked Burns' bond-writing license, the bondsman owed the county $444,894 because of his no-show clients.

But before you start feeling too sorry for Burns, consider that while the county searches for his AWOL customers, as well as ways to collect on the $444,894, Burns continues to write bonds, springing accused criminals from jail under the auspices of his son's license at Burns Bail Bonds.

Bondsman Jerry Mercer, who owes the county $227,893, has gone to work writing bonds for Allegheny Mutual Casualty Company since the county refused to do business with him as an independent. Edd Blackwood is another bondsman in arrears to the county -- he owes $309,000 -- but he, too, now works for Allegheny.

John Burns, for one, is philosophical about the situation.
"You end up writing a bond because you need the premium, and you don't study it from a risk factor," he acknowledges. "I had been in the business 20 consecutive years and had written thousands and thousands of bonds, but all of a sudden I wrote seven or eight bad ones. The numbers are very embarrassing, and I can't make an excuse for them. I'm just explaining that I fell into the same trap that is the downfall of many bondsmen."

Overall, the numbers certainly are embarrassing. The amount owed to Harris County as a result of surety bonds that were forfeited when defendants failed to appear for court has grown to an alarming sum -- at least $12 million according to one report, as much as $61 million over the last ten years according to another. The latter figure comes from a study compiled in February by the district clerk's office. District Clerk Charles Bacarisse now says the total owed to the county is probably something less than $61 million, but not much less, say other officials familiar with the study. County Auditor Tommy Tompkins, meanwhile, is confident the amount owed to the county by bondsmen is at least $12 million since 1988 -- the figure he stated in a report to Commissioners Court last year.

Either way, it's the kind of money that would go a long way toward putting more deputies on the streets of Harris County to help prevent the crimes the bond-jumpers are accused of committing. But there's a more important consideration than lost revenue.

"The point that the taxpayers suffer from is not so much the loss of revenue, but instead the fact that people who ought to be standing trial for the offenses they've committed in coming before the bar of justice are still out wandering," says assistant prosecutor Kathy Braddock, who heads the district attorney's bond forfeiture division. "In the end, there may not be anyone who's going to be held accountable [in those cases]."

The system supposedly is designed to ensure accountability. When an accused criminal is released on bail, a bonding company signs a promissory note, or surety bond, for the full amount of the bail set by the court. The bonding company then charges the defendant a portion of the bail -- usually 10 percent. If the defendant fails to appear, the bonding company is liable for the full amount -- or it's supposed to be.

In the report he submitted to the Harris County Commissioners Court last year, County Auditor Tompkins suggested a number of ways for improving the way the county regulates bail bondsmen. But more than a year later, none of the changes have been implemented.

Under Texas law, a bonding company is allowed to write bonds for up to ten times the amount of the company's collateral. For example, if a company puts up property worth $50,000, it can write bonds totaling $500,000. Included in Tompkins' report was a recommendation to reduce the collateral/ bond ratio to one-to-one. A bill which would have reduced the ratio to five-to-one never made it out of a subcommittee during the current session of the Legislature.

Another of the auditor's recommendations called for the use of the Harris County Appraisal District to set the value on the property that bondsmen put up as collateral. Currently, the value of the property is determined by independent appraisers hired by the bondsmen. Tompkins also suggested that 30 percent of a prospective bondsman's collateral be in cash. Like the limit on collateral ratio, both proposals died legislative deaths in Austin this spring.

However, there is a possibility the Harris County Bail Bond Board may take some action on its own against deadbeat bondsmen. The board is currently studying the idea of barring bondsmen, such as Blackwood, Mercer and Burns, who have a hefty amount of delinquent bonds from working in the bail bonding business in any capacity. According to assistant district attorney Braddock, Dallas County recently took the precedent-setting step of requiring all bondsmen, regardless of whom they work for, to be in good standing with the county.

"Under that reading of the law," says Braddock, who represents the district attorney's office on the bond board, "people who still owed us would not be able to write bonds."

Johnny Nelms, the bonding business' representative on the board, doesn't dispute that bondsmen owe the county millions, but he says the reforms proposed by Tompkins would hurt responsible practitioners of his trade.

"There's a bunch of bondsmen here in Harris County that don't have no trouble with making bail and paying the forfeitures," says Nelms. "You got some bad ones, of course. But it ain't all bad."

The real culprit in the bail bonding business in Harris County, Nelms argues, is the Pretrial Services Agency -- the bondsmen's chief competition. Nelms claims that the agency, which obtains bail for some defendants on their own recognizance, owes more in forfeited bonds than bondsmen. But the district clerk's study showing that bondsmen could owe as much s $61 million puts the dollar amount of bonds forfeited by Pretrial Services' clients at just $4.6 million -- a figure Nelms dismisses as "ridiculous."

Pretrial Services has long been a target of the commercial bond business. Created in 1975 when a federal judge ordered Harris County to alleviate jail overcrowding, the agency coordinates personal recognizance bonds for defendants deemed by judges to be good risks to show up in court. By using personal recognizance bonds, low-risk defendants who would otherwise remain incarcerated are returned to the streets instead of being sent to a jail cell, a precious law enforcement commodity these days.

Although commercial bonds still are used in almost 70 percent of the criminal cases in Harris County, personal recognizance, or PR bonds, cut into the business of bonding companies. Too much so, in the opinion of many bondsmen, who accuse Pretrial Services officials of cooking the books.

Last June, Allegheny Mutual Casualty Company (which allows Blackwood and Mercer to write bonds on its license), International Fidelity Insurance Company, American Bonding Company and National American Insurance Company -- companies that guarantee bonds for local bonding companies -- jointly filed a federal lawsuit against Charles Noble and Carol Oeller, the director and assistant director of Pretrial Services. "[Noble and Oeller] have engaged in a series of acts that are illegal and unauthorized under state law," the companies claimed, "and have engaged in a conspiracy whose avowed purpose is to drive the [insurance companies] out of business."

Specifically, the four companies accuse Noble and Oeller of falsifying the failure-to-appear rate of PR bond recipients. According to Pretrial Services, defendants released from jail on their own recognizance fail to appear in court only 7 percent of the time -- compared to 8.5 percent of the defendants freed by bonding companies. Bail bondsmen contend the Pretrial Services' rate is actually closer to 20 percent, and they claim Noble and Oeller falsified the figures to make the agency look better to the judges who ultimately decide whether or not an accused criminal will be released on recognizance.

After the bonding companies filed suit against Noble and Oeller, the two Pretrial Services officials filed a $1 million countersuit of their own for defamation of character, claiming the suit against them was an attack on their integrity and ability to conduct county business.

"I'm looking for public vindication," says Noble. "I am not going to have any of the judges or commissioners think that the director and assistant director of this agency stole money, lied or tampered with the records."

After Noble and Oeller filed their countersuit, attorneys for the bonding companies asked U.S. District Judge Norman Black to throw it out. Black refused, and he suggested that Noble and Oeller had sound reasons for their litigation, considering the allegations that had been made against them.

"Such conduct would constitute a crime and the statements, which allege commission of a crime, would affect defendants in their office, profession or occupation," Black wrote.

Black issued his ruling in February. Since then, the insurance companies apparently have had a change of heart. Their attorney, Roger Moore, says they'd just like to forget the whole mess and are willing to drop their suit if the Harris County Attorney's Office doesn't seek to recoup the cost of representing Noble and Oeller in their official capacity, and if the two officials will drop their private countersuit. (Since the filing of the lawsuit against Noble and Oeller, one of the four companies, American Bonding, has been suspended from doing new business in ten states, including Texas. A second, National American, was charged in Harris County in January with four misdemeanor violations of the bail bond act.)

"We offered that both sides simply dismiss their claims and go home," says Moore, adding that the problems cited in the bondsmen's lawsuit have now been brought to the attention of county officials.

Officials with the Harris County Attorney's Office say they are willing to walk away from the legal dispute, providing that the insurance companies cover the county's expenses. But Noble wants nothing to do with Moore's offer. He says he considered the offer for a reasonable amount of time -- about two seconds -- and then rejected it.

"The [people] suing me have murdered the truth," he says. "This case is going to trial." In other words, Charles Noble will not fail to appear.

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