Unlicensed, Baltimore-Based Bail Bond Companies Perpetuate Economic Inequality Along Racial Lines
The system of money bail in Maryland has led to the routine pretrial detention of criminal defendants — whom the law presumes to be innocent — solely because they cannot afford to pay the cost of pretrial liberty. For other defendants, their loved ones contract with bail bond companies to secure their release, resulting in a cycle of inescapable debt.
As a standard industry practice, bail bond companies charge a premium, a fee amounting to 10 percent of the total bail. These premiums are non-refundable, even if a criminal defendant appears in court or is not found to be guilty. As a result, family members and friends who sign bail contracts must pay the entire costs of the bail premium. To collect the premiums, bail bond companies often harass and file debt collection lawsuits against each co-signer. Because the vast majority of co-signers cannot afford attorneys to represent them in collections suits, judgments are often entered against them, allowing the bail bond companies to garnish their income, seize their assets, or even request arrest warrants.
From 2011 to 2015, the average bail amount set for African American defendants in Maryland was 45 percent higher than the average for white defendants during the initial appearance before a District Court commissioner, and 51 percent higher at the bail review hearing before a District Court judge. As a result, in Baltimore City, 89 percent of the individuals being held in jail are African American, despite making up only 64 percent of the population.
Unsurprisingly, the financial impact of commercial bail on African American communities reflects the racial disparities of bail determinations. From 2011 to 2015 in Maryland, bail bond companies charged African American defendants $181 million in premiums, while defendants of all other races combined were charged $75 million
This predatory model of extracting resources from vulnerable families is compounded by the fact that bail bond companies routinely violate laws that are designed to protect co-signers. Because of the lack of coordination between the Insurance Administration, which regulates the bail industry, and the judicial system, where debt collection lawsuits are filed, state courts end up rewarding the abusive and unlawful practices of bail bond companies by entering judgments in their favor.
The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization working to eliminate pretrial and bail practices that make an individual’s access to freedom dependent upon their ability to pay, has been investigating one specific violation over the past year. In the State of Maryland, companies that are unlicensed may neither enter into bail bond contracts nor engage in any bonding activities. The Maryland Court of Appeals has held that unlicensed companies are not entitled to the assistance of courts in enforcing contracts where the underlying licensing statutes are regulatory in nature.
Despite the law, in recent years, one particular unlicensed company, Baltimore’s Discount Bail Bonds (BDBB), has been flooding Baltimore City and County court dockets with debt collection complaints and securing judgments against debtors. In February, the Lawyers’ Committee sent a letter to the Maryland Judiciary requesting that the District Court dismiss, sua sponte, all 149 pending cases filed by BDBB, which sought to collect some $862,111.81.
BDBB is well known in the Baltimore community because, in 2011, BDBB’s past and current owners were convicted for federal tax evasion related to the operation of their bail bond business. In a press release on the convictions, the U.S. Attorney’s Office stated that from 2002 to 2006, BDBB’s previous owner evaded over $400,000 in taxes; the current owner, in 2003, evaded approximately $15,616.
On Tuesday, November 20, the Lawyers’ Committee and the law firm of Santoni, Vocci & Ortega, LLC (SVO) filed a class action lawsuit seeking to stop the collection of the hundreds of judgments obtained by BDBB. The case is Alice Hughes, et al v. 4 Aces Bail Bonds, Inc. t/a Baltimore’s Discount Bail Bonds, et al.
The harmful consequences of misguided pretrial and bail practices, on African-American communities, in particular, are compounded by for-profit private bail bond companies who proclaim service to the community while entrapping residents in predatory practices, cycles of debt, and incarceration. At a minimum, companies that profit off this broken system should be held to the letter of the law.
If you or a loved one have been sued and have a judgment against you by BDBB, please contact the Lawyers’ Committee at (866)996–7921 or CJInvestigator@lawyerscommtitee.org.
Myesha Braden is the Director of the Criminal Justice Project at the Lawyers’ Committee for Civil Rights Under Law. Veryl Pow is a Skadden Fellow at the Lawyers’ Committee for Civil Rights Under Law.