On a warm summer day in August 2015, Alexander, 28, found himself barefoot and lost on the streets of New York. Disoriented, he wandered into a private residence in Brooklyn and before he knew it, he was beaten up, arrested and in Rikers.
Veronika*, Alexander’s mother, said he had been struggling to stay on his medication for schizophrenia in the weeks before the incident. “I can’t babysit him every minute,” said Veronika, a single mother who works as a home health aide. “He’s a grown man, I can’t tell him to stay home.”
Alexander’s bail was set at $25,000, an astronomical amount for Veronika, 64, who was making $10 an hour and paying for Alexander’s rent on top of her own. “If you’re low income, you can’t afford to bail someone out,” she said.
“These stories of abuses are endless.’
Veronika contacted Nick Encalada-Malinowski at VOCAL-NY, a grassroots group that organizes low-income New Yorkers affected by HIV/AIDS, the drug war and mass incarceration. He helped her find a bail bond company, the only option for Veronika and many other low-income New Yorkers who are trying to get their loved ones out of jail. Veronika ended up using Marvin Morgan Bail Bonds, but it took her over five months to get Alexander out of jail, and another year to get her collateral back in full. “They make money off of people’s misfortune, off their ignorance,” she said.
The for-profit bail bond industry is notorious for taking advantage of people like Veronika in vulnerable positions and in some states, the industry is outlawed completely. In New York, however, bail bond companies are still legal, and there are more than 100 companies in New York City alone including Marvin Morgan. In mid-February, in a move applauded by consumer advocates, the New York Department of Consumer Affairs (DCA) filed a lawsuit against bail bond agent Marvin Morgan and several insurance agencies alleging numerous violations of the New York Consumer Protection Law. The lawsuit is the first of its kind against the bail bond industry in New York State.
“The for-profit bail bond industry has a history of exploiting economically disadvantaged consumers in their most desperate hours: after the arrest and incarceration of a loved one,” said DCA Commissioner Lorelei Salas.
Veronika said when she showed up to pay the initial quoted amount of around $4,000 in fees and collateral, Marvin Morgan tacked on over $1,000 more and she had to borrow money from a friend to get Alexander out of jail.
Although Marvin Morgan paid Veronika back $1,500, they refused to pay back the $1,000 they added at the last minute, saying they had no record of this payment.
Even though Veronika submitted a letter to New York Attorney General and met with Marvin Morgan several more times regarding the outstanding payment, it took the company over a year to return her money.
Veronika is not alone in her experience at Marvin Morgan. She eventually got her money back, but some were not as lucky. DCA is seeking more than $57,500 in fines and restitution for 16 consumers and a restitution fund for the affected consumers who have not yet filed complaints with DCA. On average, the consumers cited in DCA’s complaint are owed more than $1,000.
“These stories are endless,” said Ted Bajo, a lawyer who has worked on cases involving Marvin Morgan. He blames the Department of Financial Services for allowing bail bond companies to prey on vulnerable communities by failing to regulate the industry. “They don’t issue any regulation, it’s absurd,” said Bajo.
Encalada-Malinowski said the lawsuit is a good start because it “puts companies on notice,” but doesn’t do enough to solve the overall issues. Marvin Morgan is only one company, and in a survey conducted by the Brooklyn Community Bail Fund, the overwhelming majority of participants had negative experience with bail bond companies and reported that they were overcharged, their collateral was not returned, the bail bond company unnecessarily delayed in securing the defendant’s release or the bail bond company employed deceptive practices.
“Only two countries in the world allow commercial bail bond, the U.S. and the Philippines,” said Encalada-Malinowski. VOCAL-NY is campaigning for the elimination of the industry through petitions to Gov. Andrew Cuomo and Attorney General Eric Schneiderman.
The courts also have a large influence and have the option to offer unsecured or partially secured bonds, which would eliminate the need for bail bond companies. Encalada-Malinowski said using unsecured bonds in place of commercial bonds would result in 12,000 fewer people entering Rikers per year, a 20 percent drop in annual admissions. This would align with Mayor Bill de Blasio’s goal of decreasing the inmate population at Rikers to 5,000 in order to close the facility and relocate inmates to local facilities in Manhattan, Brooklyn, Queens and the Bronx.
In the meantime VOCAL-NY is pushing for more regulation of the bail bond industry. “While we fight to eliminate this industry we must not lose sight of the immediate needs of directly impacted people,” said Encalada-Malinowski.
*Veronika and Alexander’s names are both pseudonyms.
Photo: ROTTEN BUSINESS: Outside the Marvin Morgan bail bond office at 77 Baxter St. A in Lower Manhattan. Credit: Erin Sheridan.