On September 1st, 2015

CDI Arrests Bay Area Bail Agents 31 accused of illegal business practices

SAN JOSE - When the California Department of Insurance (CDI) began seeing an increase in complaints about possible illegal business practices by bail agents in 2013, it sent a letter to all licensed bail agents reminding them of their obligation to follow all laws and regulations.  The letter did not seem to have an impact on 31 bail agents from five San Francisco Bay Area counties, who are now facing felony charges for illegal business practices.

What were they doing?  A multi-year investigation by CDI investigators uncovered schemes by bail agents to scoop business away from competitors by rewarding jail inmates with money added to their jail accounts for providing information about newly booked individuals in the jails.

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"This type of corruption is not only illegal, it directly impacts law enforcement resources and efforts within the California Department of Insurance," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.  "California has a high rate of insurance fraud which requires a tremendous amount of investigative and detective work."

20958801736_64a6086617_oLaw enforcement personnel from CDI and the Santa Clara County District Attorney's Office wrapped up an arrest sweep August 31, 2015, concluding CDI's largest enforcement action ever involving bail agents.  Thirty bail agents were arrested with one arranging to surrender.  The arrest sweep  focused on seven companies, including Aladdin and Luna Bail Bonds and Bail Hotline.  The  bail agents operated  in Santa Clara, Alameda, Monterey, San Benito and Merced counties. The Santa Clara District Attorney is prosecuting the cases.

"Bail agents play an important role in our criminal justice system, which should be free from corruption," said Insurance Commissioner Dave Jones, whose department licenses bail agents in California. "Complaints against bail agents for unfair business practices and alleged illegal activity have been increasing steadily. These arrests and license suspensions should serve as a warning to any bail agent skirting the law that it won't be tolerated."

The department immediately suspended the licenses of all 31 bail agents identified in the enforcement action. They are no longer allowed to serve as bail agents or transact bail business. The enforcement action is the result of a multi-year investigation which included 15 search warrants, approximately 100,000 digital recordings and 50 witness and bail agent interviews.  In addition to the scheme involving paying inmates for referrals, the investigation also revealed evidence of the illegal use of unlicensed individuals to transact bail and a bail agency employing a convicted felon as a bounty hunter-a violation of the Bail Fugitive Recovery Act.

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Images courtesy of CDI

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