Los Angeles bail bonds businesses say they're getting a bum rap.

The City Council disagrees, and has made permanent an ordinance preventing their proliferation or growth.

What "crime" have the bail bonds companies been prevented from committing?

Growing too much in the Little Tokyo district.

"This was about not eroding the cultural and historic identity of the community," said Councilwoman Jan Perry, whose Ninth District includes the Little Tokyo district that was the focus of the measure.

"Little Tokyo is one of the last remaining Japan towns in the country, one of only three in California," Perry continued. "It's a very pedestrian-oriented, family area and a big draw for visitors of all kinds."

Not guilty, says Maggie Kreins, president of the 27-year-old California Bond Agents Association.

"We are treated like the unwanted stepchildren," said Kreins. "But if you go to these (bail bond) offices they look no different than an insurance company or criminal defense attorney's office, because that's what we do. A lot of these people are not guilty and deserve the benefit of the doubt."

Perry denies that the dozen or so existing bail businesses were being singled out.

"It's not just bail bonds. Any concentration of any type of business that erodes the character of the community is something I would ask for relief of," said Perry.

Little Tokyo is next door to the Parker Center jail, as well as the nearby Twin Towers correctional facility. It's also close to lawyers' offices and municipal courthouses. Proximity to the jails is crucial for bail agencies, particularly the smaller shops, which can't afford much advertising.

Last month, the Council amended Little Tokyo's community plan to make permanent a temporary ordinance passed in 2005. It bars existing bail business from expanding and new ones from opening on the ground floor in the area. Similar measures have been adopted in Long Beach and Santa Ana, as well as various municipalities across the United States.

Those in the bail bond business and others say that they are being unfairly stigmatized, given the expanding U.S. prison population and the exponential increase in bail amounts over the past few years.

"That's a huge market for bail bonds and it's a very legitimate business," said Los Angeles criminal defense attorney John Crouchley. "But if you see a lot of them in a particular area, you figure it's not exactly a part of town you want to be in."

There has been tremendous industry growth. Ten years ago, there were approximately 1,000 bail agents in California, and today there are more than 2,400. There are about 14,000 nationwide, giving California more than 17 percent of the U.S. total.

Big-box bail

It's easy to see why the bail bond business has grown: There's more money to be made today.

There has been a dramatic rise in the bail schedule the predetermined bail amounts for various offenses that are set annually and Los Angeles County bail fees are among the highest in California.

Over the past two decades, court-set bail fees for some forms of child abuse have about quadrupled, and domestic violence offenses have increased more than tenfold, from $5,000 to $50,000 today for a first offense, and to $100,000 for a second offense.

If an arrestee has the means, bail can be posted without a bond issued by an agent, if the entire bail amount is posted in collateral or cash. But because of increasingly high bail fees, most defendants use bond agents, which in California charge a 10 percent fee for taking on responsibility for the entire bail should the accused fail to appear for a court hearing. The bail bond agency's commitment is required to be backed by insurers.

"It used to be that you would be dancing around your desk if you wrote a $10,000 bond," Kreins said. "Today half these people won't get out of bed to write a $10,000 bond at all."

The higher rewards and risks have fueled an increase in the number of companies that do a greater volume of bond writing, supplanting many "mom-and-pop" bail businesses. Some companies write higher-risk bonds that are often harder to collect. The smaller shops live and die by writing fewer bonds, making each one important.

"Some guy with an MBA from Florida State University who doesn't know a bail bond from a basketball and backs someone from out of state is going to take some fairly significant hits," said Steve Krimel, an attorney who has long represented bail industry members.

To do business in California, bail bondsmen and bondswomen have to obtain a bail agents license, and are subject to regulation by the state Insurance Department. Agents must have no felony convictions. The license also requires 12 hours of classroom education, passing a written test and payment of a $118 license application fee.

Agents must be backed by a surety bond for proper handling of money collected.

And the insurer can impose restrictions on bond amounts written, since they end up holding the bag for any skipped bail amounts that can add up fast.

Image or reality?

It's unclear whether the industry has been hurt or bolstered by the portrayals of rough-and-tumble bounty hunters known in the industry as "recovery agents" like Duane "Dog" Chapman, star of cable network A & E;'s reality series, "Dog the Bounty Hunter."

It's clear, however, that not all of the industry's problems are the result of unsavory TV portrayals.

Since the bail industry intersects directly with the criminal justice system, problems can result. Or, as Krimel delicately puts it, it can create "a tremendous opportunity for those of lesser ethics to entice public sector employees to join in what may easily be unlawful activity."

That would include paid referrals from jailhouse employees, law enforcement officers or even inmates.

In 2004, Robert Douglass, who owned Ray's Bail Bonds and Pacific Bond Corp., gave up his license and sold his company as part of a plea bargain after being charged with paying inmates to drum up bond business from others behind bars.

Cases like Douglass' and characters like "Dog" are not the norm, some small business owners said.

Al Lopez is the owner of Ernie Lopez Bail Bonds in Los Angeles, which was founded by his father.

He said that agents with high rates of forfeiture or who frequently employ bounty hunters to track "skipping" clients "must be writing some terrible bonds."

Lopez currently has subcontractors tracking down one client, charged with drug possession, but he said it's an unusual practice.

"If you do it right up front and underwrite the bond correctly, that kind of thing won't happen," he said. "People miss court dates, but it's typically because they got dates mixed up or a car broke down or something."

He said he only hires his "recovery guys" a few times a year.

"I need to make sure that if something's going to go wrong I am still going to be here tomorrow," Lopez said.

For reprint and licensing requests for this article, CLICK HERE.