It’s Simple Math – Deposit Bonds Don’t Add Up

Indianapolis, IN – An article appeared recently on NewsandTribune.com entitled Released on Bond: A flawed system?  The article was written by Matt Thacker.  The article takes aim at the deposit bond program employed by the Clark County courts in Jeffersonville, IN.  Jeffersonville is located just across the Ohio River from Louisville, Kentucky.  Bail is outlawed in Kentucky but that’s a story for another day.

The Released article cites two studies, an unnamed study from 2008 where 31 percent (30) of Indiana counties responded to a survey.  The study concluded that 47% of $5.3 million collected by the courts on cash bond deposits in 2008 went to the county.  The article also cites the 2007 Bureau of Justice Statistics (BJS) study that said 30% of those defendants released on an unsecured bond (a deposit bond is 90% unsecured) failed to appear while only 18% of defendants released on a bail bond failed to appear.

Let’s use these numbers to paint a picture.  The $5.3 million collected by 30 Indiana counties in 2008 represents a 10% cash deposit against $53 million in actual bonds set by the courts.  This translates to 90% or $47,700,000 of the bonds being unsecured sans the criminal defendant’s personal guarantee.   

According to the BJS Study, 30% of defendants released on unsecured bonds fail to appear for court. This would mean 30% of the $5.3 million, or $1,590,000 of the cash bond deposits collected by 30 Indiana counties should have been forfeited and sent to the State for deposit to the Common School Fund.  This also means the defendants, who deposited the 10% cash with the court to obtain release, owe the State of Indiana the remaining 90% on the forfeited bonds or $14,310,000.  This is what Hoosiers have come to know as toxic debt.

While Clark County and the other 29 counties in Indiana, who accept deposit bonds can rejoice at collecting 47% or $2,491,000 of $5.3 million in cash bond deposits (average of $83,000 per county), Indiana taxpayers can be disgusted at the idea that due to the negligence of these 30 counties the State failed to collect $15,900,000 in forfeited bail and that’s just for one year.   I say negligence because these courts, in their wisdom, elected to allow defendants to be released from jail by depositing just 10% of the bond in cash and sign as a guarantor for the remaining 90% of the bond.  What bank in Indiana, or the country for that matter, would loan someone any amount of money without first running a credit report and in most cases asking for collateral or a third party guarantor?  None that I’m aware of.

Clark County seems to make these underwriting decisions on a daily basis.  The Released article refers to Fadayeen Guy who bonded out of jail in 2006 by posting $7500 cash with the court.  This was 10% of $75,000, the actual bond amount. Mr. Guy was arrested for, among other charges, dealing cocaine.  He was from Tennessee.  According to the Released article, Mr. Guy never made his first appearance and didn’t reappear in court until March 2009.  To Mr. Guy’s good fortune, the court returned his original $7500 cash deposit less $719 to cover probation and court costs.  How great is that!  Had the court required a bail bond, which guarantees a defendant will appear in court every time until the case is adjudicated, the State of Indiana would have received $75,000 as opposed to the county receiving $719 had the bail agent been unable to locate, apprehend and surrender the defendant to jail.

Deborah Neal, staff counsel for the Indiana Public Defender Commission, is quoted in the Released article, saying "As with a car loan or anything else, collecting a judgment can be like squeezing blood out of a turnip".  That is certainly the case; when, in this scenario, you secure the car loan with an unqualified buyer, no collateral or third party guarantor.  I can assure Ms. Neal, the surety companies approved to guarantee bail bonds in Indiana are not turnips.  Surety Bail Bonds companies must pass a rigorous qualification process before being approved to operate in Indiana. Failing to pay verified bond forfeiture judgments will result in the seizure of cash on deposit with the State and a revocation of authority to transact further business in Indiana. 

One can only hope that one day the good citizens of Indiana, their legislative representatives and the Governor will wake up to the fact that the deposit bail scheme in place in several counties is nothing more than a way to generate a few bucks for the county.  They only need to do the math.