A Spokane bail bondsman who put up the cash to get an alleged Ponzi schemer and a convicted sex offender out of jail had to shutter his business after clients complained he took them for more than $84,000.
State regulators revoked the license of Christopher T. Smith, owner of now-defunct Smith Family Bail Bonds Inc., last year after former clients said he did not return collateral given to secure the release of loved ones awaiting trial.
A son who put up more than $10,000 worth of silver coins to get his father out of Pend Oreille County Jail in October 2012 never recouped a cent from Smith when bail was forgiven in the domestic violence case several weeks later.
The bulk of the money Smith owed was to family members and associates of Doris Nelson, a payday-loan business owner from Spokane who faces federal charges of fraud and money laundering after a Securities and Exchange Commission investigation. Smith is accused of keeping about $51,000 in that case that he should have returned.
Smith, who has been a licensed bond agent in the area since 2007, did not respond to repeated requests for records by officials at both the state Department of Licensing and Office of the Insurance Commissioner. In April, the licensing department revoked his agent licenses. The insurance office followed suit, revoking its licensing of the business for a decade, effective Oct. 14.
While insurance companies backing Smith’s company paid back some of the clients who complained, the rest would likely have to go through courts to recover their money, said Steve Valandra of the Insurance Commissioner’s Office.
State agencies can only order repayment and revoke licenses, they can’t compel a delinquent bondsman to repay debts, said Department of Licensing spokeswoman Christine Anthony.
According to clients, Smith kept money given as collateral that should have been returned once court proceedings ended. That’s on top of fees collected by his agency, which are non-refundable. Smith refused to talk with his clients, would not turn over records to the state and told one customer her collateral – $1,250 in a money order – was stolen from his car.
Smith Family Bail Bonds caused a stir in summer 2012 when it posted a $250,000 bond for convicted child molester Richard Payne, who had been arrested for molesting a 5-year-old girl at a NorthTown Mall arcade. Payne has since been convicted of the crime and sentenced to life in prison.
At the time, Smith told The Spokesman-Review he required clients to pay 10 percent of a bail amount in cash before springing them.
A call to Smith Family Bail Bonds went to another bond agency that reported Smith Family had closed. An email sent to its listed business account bounced back.
Smith Family was not the only Spokane bail bond company disciplined by the Licensing Department last year. BJ L. Lyman’s application for a license was denied in August for five years after a criminal conviction was discovered, and agent Eric Houchin of All City Bail Bonds was fined $2,000 for using an unlicensed bond agent when chasing bail jumpers, according to department records.
Internal numbers provided by the Department of Licensing total 31 investigations of bail bond companies last year statewide, nine of which ended in disciplinary action. There are 17 licensed bail bond recovery agents in Spokane County working for seven licensed companies, according to Licensing Department figures.
Anthony said many complaints about bail bond agents come from customers who are upset that their collateral is not returned after a suspect misses court. Contracts stipulate that any money or property put up to pay a bond can be forfeited if the defendant does not appear for scheduled court dates.
“If that person runs, they’re going to lose their money or property,” Anthony said.