Alleged bail-bond fraud cost Wake County schools more than $900,000

khui@newsobserver.comFebruary 20, 2014 

— Wake County school officials will seek to recoup more than $900,000 in forfeited bond money that the district says it didn’t receive because of an alleged scheme to falsify court records.

The State Bureau of Investigation is looking into whether the mishandling of records in the Wake County Clerk of Court office resulted in the failure to turn over to the school system money owed when criminal defendants failed to show up for court.

The figure is the district’s estimate of what it should have received during a five-year period, according to Rod Malone, an attorney for the school system.

Malone says the school system would go to court to recover from bondsmen and insurance companies the missing money, plus interest and fines, for a total of as much as $1.5 million.

“We will seek to recover all the money that is owed to us,” Malone said Wednesday.

Wake County District Attorney Colon Willoughby has said the case could go to a grand jury next week for possible criminal indictments. Willoughby said he learned about the case when county Clerk of Court Lorrin Freeman reported the irregularities to him.

No-shows forfeit bond

Professional bondsmen or others who post money or property as bond – a portion of the bail set by a court for a defendant to get out of jail while awaiting trial – forfeit it if the defendant fails to show up for court. The forfeiture becomes the property of the court jurisdiction in which the criminal case is to be heard and cannot be refunded.

Under North Carolina law, the money collected is to go to the public school system in that jurisdiction.

State law provides a 150-day window for someone who is responsible for the bond to challenge or set aside a forfeiture. The bondsman or insurance provider doing so, though, must serve a copy of the request to the district attorney and the county board of education.

If the district attorney or board of education does not file an objection to the request within 20 days, the bondsman or party responsible for the bail money is released from obligation to pay.

Malone said that a clerk, with the knowledge of a bondsman, apparently falsely entered information into the computer system showing that a motion had been filed to set aside the forfeiture.

The motion avoiding forfeiture would automatically be granted if no objection was filed.

“No notice was given so we could object,” Malone said.

Malone said there have been instances in the past in which the school system has sued to recover money from bondsmen who didn’t send them notice. But he said it’s the first time that members of the Wake clerk’s office were implicated in a scheme.

Willoughby asked the SBI to investigate in August.

Though Willoughby and Freeman have declined to discuss specific targets, Freeman, the chief clerk for the past eight years, has said that one person in her office has been fired as a result of the investigation, and another has resigned.

Malone says Freeman notified the school system about the issue shortly after she learned about the situation. Freeman has filed to run for district attorney. Willoughby isn’t seeking re-election.

“Lorrin Freeman has been amazing,” Malone said. “Her office has done everything possible to help us recover every single dollar. Her office and Willoughby’s office have been aggressively trying to recover the money.”

Staff writer Anne Blythe contributed to this report.

Hui: 919-829-4534

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