The following article is yet another example of Vince Smith (a/k/a Capital Bonding) placing a huge blight on the bail bond industry. HGUNNER and myself were instrumental in shutting down their operation in New Hampshire and attended the hearing when Smith had to meet with the NH Department of Insurance investigators in the wake of our investigation. Smith appeared with three attorneys who tried in vain to exclude us from attending the hearing... their efforts failed. I stared at Smith the whole time but he would not engage my eyes and kept looking down at the table. The man is a moral coward and the CEO of a former criminal enterprise.
I wrote a few articles regarding Capital Bonding and posted same on the Internet consequently I received a "cease-and-desist" letter from one of Smith's expensive attorneys. I copied the cease-and-desist letter and in extremely large letters I wrote "NO" across the page with a red felt marker and sent it back to the law firm. I added a footnote to their letter stating an old adage... "An empty barrel makes the loudest noise." I never heard from them again.
Several months ago a firm of investigators based in London, England, contracted by Lloyds of London, purchased the file I gathered on Smith/Capital. They were investigating allegations that Smith/Capital "forged" some Lloyds of London bonds. I wonder where they could have gotten that information? Ha!
Saturday, May 21, 2005
Davidson courts rein in bail-bonders
Some may fraudulently avoid payments
LEXINGTON
Nearly two years after Davidson Clerk of Court Brian Shipwash shut down a major bail-bonding company for writing bonds that he said it could not guarantee, several more bail-bonding agencies are under investigation in Davidson County.
And in Davidson Superior Court yesterday, Judge W. Douglas Albright ordered one of them, Allegheny Casualty Co., to pay more than $100,000 in forfeited bond money or remain shut down.
Albright ordered the company to pay the $100,000 that Monte Spells, a licensed bail agent of Allegheny Casualty, filed a motion to set aside when his client, Kimberley Ratcliffe, failed to show up for her June 21, 2004, court date on a charge of trafficking in cocaine. The reason for the motion, Spells claimed, was that Ratcliffe was in jail elsewhere in the state on the date of her scheduled appearance and therefore could not be in two places at once.
"Tell them to send the check on in," Albright said in court yesterday morning.
The $100,000 will include an additional 8 percent interest that has accrued since January, when the forfeiture should have become final judgment. The money is intended for the Davidson County School Board and will benefit the Davidson County, Lexington City and Thomasville City schools.
It is another example of a move that Shipwash says is sometimes misused to delay payment on a forfeited bond.
An investigation by the clerk's office into Spells' motion- led by Shipwash - and Stephen Barnhill, the attorney for the county school board, revealed that Ratcliffe was not imprisoned at the time.
Spells later told the court that he believed that the imprisoned woman was Ratcliffe using an alias.
In addition, a statewide review of Allegheny Casualty showed that the company was operating in at least 35 counties. It was prohibited from writing bonds in four counties, and owed them a total of nearly $30,000. It also had motions pending on past forfeited dates in 11 counties totaling more than $200,000 and a total potential statewide liability of more than $1 million, according to the Order to Restrict Execution of Bail Bonds against Allegheny Casualty, filed in Davidson County.
"The integrity of the motion to set aside is questionable, and mislead the court as to the status of the defendant, and warrants investigation as a possible misuse of the set aside statute as an attempt to delay entry of final judgment," the order says.
Spells' attorney, Mike Grace, could not be reached yesterday for comment. Jerry Watson, the executive vice president of Allegheny Casualty, also could not be reached.
Shipwash said, however, he believes that the problem stems from a few individual agents, not from the bail-bonding and insurance companies themselves. Some of the companies are unaware of what is going on in their name, Shipwash said.
Barnhill said, "We've been working very closely to monitor every one of these bond forfeitures.
"This is the highest-dollar individual one that we've dealt with.... We're pretty proactive," he said. "The goal here is to make sure the school systems are getting the money that's supposed to be going to them. Sometimes it's not an intentional misleading of the court, but you'd be surprised how many of these get through."
In 2003, Shipwash first started investigating bail-bonding companies that posted bonds for defendants likely to flee and then didn't pay the bonds when the defendants failed to appear.
In August 2003, he stopped agents of Capital Bonding Corp., of Reading, Pa., from writing bonds in Davidson County. Capital Bonding had operated in 38 states. Its underwriters had been criticized in other parts of the country, and officials from several other states and the U.S. Department of Justice were taking regulatory action against it.
According to statistics compiled by Shipwash at the time, two of Capital Bonding's underwriters together owed more than $8 million throughout the state, with a potential liability of $21 million in missed court dates at one time.
Harco National Insurance Co., one of Capital Bonding's underwriters, owed more than $100,000 in Davidson County alone.
Harco has since taken over Capital Bonding and has paid off several million dollars' worth of the judgments against the defunct company.
As a result of the investigation into Capital Bonding, North Carolina tightened its regulation of insurance companies involved in the bail-bond industry.
Among the changes, the N.C. Department of Insurance now requires companies to submit a $1 million deposit in order to keep their licenses. Previously, they had to deposit $300,000. The money is used to pay local officials the amount of a bond after a defendant fails to appear in court. The change was made to deter fly-by-night companies from competing in the industry.
A bond is considered forfeited 150 days after a defendant fails to appear in court, unless the bonding agent files a motion to set aside forfeiture within that time that gives one of six legitimate reasons for the defendant's absence.
Once a motion is filed, the school board has 10 days to object to the motion.
Given the number of motions filed and the time it takes to investigate each motion, many bond agents get away with filing fraudulent motions. Shipwash said he wants to close the crack those agents are slipping through.
If a motion is found to be fraudulent after the 10 days, the case can be reopened.
Barnhill said that the agencies that issue bonds need to be held responsible for making sure the defendants appear in court, which may entail more selectivity in whom they do business with.
"The whole purpose of a bond is to make sure the subject appears in court and that the public is safe," Barnhill said. "If the surety is going to post bond, it's their responsibility to make sure they appear in court."
In Spells' case, Ratcliffe claimed to live in Charlotte, had a New Jersey license and a car bought in Texas, which should have sent up a red flag for a flight risk, Shipwash said.
• Jessica Guenzel can be reached in Lexington at (336) 248-2074 or at
jguenzel@wsjournal.com
