CAPITOL BONDING

JUST HEARD HARCO INSURANCE PULLED ALL BONDS AND BONDING POWER FROM CAPITAL BONDING EFFECTIVELY CLOSING THEM DOWN.ALSO HEARD MR SMITH WAS REMOVED FROM THE OFFICES IN PA BY HARCO REPS-MAYBE THE HOUSE OF CARDS IS CRUMBLING

IN ANOTHER STORY CAPITAL HAS SURRENEDED THEIR LICENSE IN CONNETICUT - BYE BYE CAPITOL THE BEGINNING OF THE END

JACK HAS KILLED THE GIANT

JUST CONFIRMED HARCO HAS EVICTED CAPITOL FROM THE OFFICES IN PA AND HAS TAKEN OVER THE BUSINESS

RUMOR SAYS CAPITOL HAS OVER FIVE HUNDRED MILLION IN FORFITURES NATIONWIDE ALL YOU AGENTS THAT CAPITOL OWES MONEY MAKE CLAIMS TO YOUR LOCAL AGENT QUICKLY

We have been waiting a long time for this!
Now PLEASE take some advice : DON'T HIRE ANY OF THIER AGENTS!
KEEP THE BAIL WITH THE REAL BONDSMAN AND KEEP THIS INDUSTRY CLOSED THAT WAY IT ONCE WAS.

Capitol Bonding Corp. came into California some time ago under Legion Insurance promising bail bond company owners no responsibility in exchange for a 75% commission to Capitol Bonding.

Predictably, every bail agent with a risky bond wrote the bail on Legion, which was quickly replaced by Highland Ins. and then Sirious at some time. Harco came some time after that.

Surety jumping has become something of a devious sport in California. It reportedly goes something like this: get on with an Ins. Co., write every bond without collateral, don't worry about bail enforcement (the summary judgment won' t ever be paid anyways).

Just before the ballon pops, jump to another surety and repeat the process. An incalculable number of forfeitures go unpaid when the Ins. Co. gets liquidated.

The result was that small bail companies got shut down due to an inability to write bonds with no collateral and little or no money down.

Several years ago, I got a call from a guy in jail. He said that he had just gotten off the phone, and the other company said that they could get him out with no collateral, nearly nothing down, and with no co-signer. I told him good luck, and he never called back because he wasn't lying.

The perps who have effectively tarnished the California bail industry are beginning to run into problems finally. Capitol Bonding isn't going to be an enabler it seems. Law changes are coming that will make surety jumping unlikely.

A word of caution. The companies in question may be moving into your neighborhood, and, if this happens, the Mom & Pops will be more than decimated thus leaving bail enforcement contracts very hard to win.

Rex

Back in January, Wachovia National Bank entered a $2 million judgment against Vince Smith and Capital. To get the $2 million, Smith essentially mortgaged the whole business, the six-story building, computers, computer software, furnishings, fixtures, little soaps in the ladies room, you name it. Well, IAT Reinsurance, a subsidiary of Harco, bought that $2 million note from Wachovia for $1.6 million. Apparently after coughing up $5 million to the Connecticut state attorney's office, they felt enough was enough so they took over Capital with a Writ of Replevin. The IAT mortgage assumption was just filed today in Berks County, PA., court.

_________________
Lance Allen Wilkinson
Recoveries by L.A.W.
Serving since 1984
“What is sought is found... what is overlooked escapes” (Oedipus Rex)

Capitol only charges agents in NJ 45% to 60 %

Head of indebted bail firm replaced
An Illinois-based insurance company takes control of Capital Bonding Corp., which owes the county almost $2 million in bail bond forfeitures, from Vincent J. Smith.

By Dan Kelly
Reading Eagle
Vincent J. Smith has been removed as president and chief executive officer of Capital Bonding Corp., an embattled bail bonding agency based in Reading, officials said Thursday.
Officials of Harco National Insurance Co., Rolling Hills, Ill., entered the headquarters of Capital Bonding, 525 Penn St., accompanied by a private security force and took control of the bail agency, officials said.

The action comes just seven months after the Reading Eagle reported that Capital Bonding owed Berks County about $3 million in bail bond forfeitures. Capital still owes the county almost $2 million, officials said.

Smith declined to comment, but issued a written statement indicating he and his wife, Sheila, have left the business in the hands of John W. Cowley and David A. Swintosky and that the couple plan to pursue other business ventures.

Cowley and Swintosky are Harco employees, officials said.

Cowley and other Harco officials did not return numerous phone calls.

Harco spokesman David Pirrung declined to comment on the takeover.

“We have a long corporate history of not commenting on situations like this,” Pirrung said.

Capital will continue to operate under Harco's management, officials said.

However, it is unclear if Harco will pay Berks County about $2 million in forfeited bail bonds written by Capital bail agents while Smith was at the helm.

Harco took over Capital just days after Harco and Aegis Insurance Co., another Capital Bonding underwriter, were forced to pay the state of Connecticut $5 million in forfeited bails written by Capital Bonding agents.

Connecticut also revoked Capital Bonding's state insurance license for three years. Capital also is prohibited from writing bail in New Jersey because it committed fraud and used dishonest business practices there, officials said.

Berks County Solicitor Alan S. Miller said $1.3 million of the almost $2 million Capital owes the county is for forfeited bail bonds insured by two insurance companies that Smith claims have gone bankrupt. Smith threatened to sue the county if it tried to collect the $1.3 million from Capital Bonding.

Miller said the forfeitures were issued against Smith and Capital Bonding. He said Harco, as new owner of Capital Bonding, would be responsible for all Capital forfeitures.

Miller filed seven judgments totaling $525,000 in bail forfeitures against Capital in November. In January, Berks President Judge Arthur E. Grim issued an order prohibiting any company that owed the county more than $500,000 from writing bail in the county.

Miller said Smith since has paid the county $700,000.

Officials said financial woes opened the door for Harco to seize control of Capital Bonding.

A week after Miller filed judgments against Capital Bonding, Wachovia National Bank called in a $2 million loan it had extended to Capital bonding. The loan was guaranteed by the Smiths, both of the 100 block of Maple Grove Road, Cumru Township.

The Smiths used the firm's five-story Penn Street headquarters and everything in it as collateral for the loan.

On Feb. 10, attorneys for Harco's parent company, IAT Reinsurance Group of Bermuda, bought the $2 million note held by Wachovia for $1.6 million.

However, IAT lawyers did not file court papers settling the Wachovia judgment until late Wednesday.

_________________
Lance Allen Wilkinson
Recoveries by L.A.W.
Serving since 1984
“What is sought is found... what is overlooked escapes” (Oedipus Rex)

L.A.W.,

Thanks for the update on Mr. Smith's Capitol Bonding Corp. (CBC).

I found the article to be of tremendous interest insofar that CBC ostensibly enjoyed surety jumping as a way to rake in the bucks with no concern over forfeited bonds--just like the ostensible practices of some corporations here in California.

Extensive research into the illegalities of surety jumping in California met with negative results. That is to say, I am not aware of any state laws that prohibit a bail bond corporation from going forward while it's surety goes under from unpaid summary judgments.

However, it would seem that involved players weren't going to put up with "fraud" and took action, which could serve as a model for California.

Rex

Some inside info (or scutlebutt i should say) i have recieved was as administrator for Harco capital was able to obscure from view the true nature of the forfitures from Harcos view-only when Conneticutts 5 million dollar pay out occured did Harco come to see what was happening.

I also believe that the next few months will see some major changes coming about as Harco tries to recover from a five hundred million pot of forfitures and comes to relize only a good gang of well paid pro beas can pick up the skips and help dwindle down that massive debt.

I also hope they relize that the way capitol did it does not work(as evident by the volume of skips that have not been caught)and they need pro beas working for a reasonable fee 10 to 15 percent across the board plus expenses to recoup some of their losses.

The day of the back backyard bea is dead-the pro with his or her skip tracing knowledge and contacts working full time to recover the jumper will be needed.It is evident the the easy skips were returned by capitols people and the hardcore jumpers are left-only the most well trained and well equiped in survaillance , electronic detection and skip tracing abilities will succeed.That will cost money 7percent and 2 percent will not cut it.
Our ability to work with FBI , DEA , US MARSHALL SERVICE wil be tested as i suspect many skips are out of country aleady(i know of 2 in poland and 1 in the ussr)

Hgunner, I've always said that I am a student of many subjects to include the BEA/Bail Bond trades; accordingly, I remain open-minded when a new angle or concept is brought to my attention.

As usual, you're visionary brain hit upon an idea that my negative past experiences with CB resulted in my foresight being too clouded to see the larger picture (Hey! It happens to everyone from time to time!).

Harco may need considerable help.

Well done, Sir.

Rex