SURETY COMPANY DATA:

Allegheny Casualty & AIA Holdings

Political Contributions

According to the California Secretary of State, from 2007 to 2019, AIA Surety and AIA Holdings has contributed a total of $364,764.28 in California.

Lobbying

According to the National Institute on Money in Politics and New Jersey Law Enforcement Commission, AIA Holdings reported $21,000 worth of lobbying in 2017 with its lobbyists Van Wagner Government Affairs and Public Strategies Impact. On the other hand, IFIC reported a total of $196,400 from 2001 to 2014. In total, companies affiliated with AIA Holdings spent $217,400 on state level lobbying.

Ownership

Allegheny Casualty International Fidelity Associated Bond (AIA Holdings) calls itself “the nation’s oldest and largest family of bail bond insurance companies” and it has “been partnering with agents across the country for over a century.”


AIA Holdings is a member of a holding company system. The owners and holding structure is detailed in the chart below.

Leadership

Director

Title

Francis Louis Mitterhoff

President, Chairman of the Board

Ellen Sue Kagan

Executive VP and Treasurer

Normal Roger Konvitz

Executive VP and Secretary

Robert William Minster

CEO

Dirty Laundry

 

ACLU Lawsuit

In April 2019, plaintiffs Eugene Mitchell and his wife, Shayleen Meuchell, filed a civil suit in the U.S. District Court of Montana against “First Call Bail and Surety Inc., Allegheny Casualty Company, International Fidelity Insurance Company, Montana Civil Assistance Group, Michael Ratzburg, Van Ness Baker Jr. and Jason Haack,” according to Courthouse News Service. The case was filed by the American Civil Liberties Union, ACLU of Montana, and the Terrell Marshall Law Group. The plaintiffs asserted “claims for assault, trespassing, false imprisonment, intentional and negligent infliction of emotional distress, as well as several charges under the Racketeer Influenced and Corrupt Organizations Act and the Montana Consumer Protection Act.” It was the first lawsuit filed by the ACLU “against the private, for-profit bail industry in America.”

According to details of the case reported by Courthouse News Service, “Mitchell and his wife were in bed in April 2017 when bounty hunters from the Montana Civil Assistance Group allegedly broke down the front door of their home and pointed guns at the couple and their 4-year-old daughter.” These bounty hunters were “wearing bullet-proof vests and wielding semi-automatic rifles,” and the lawsuit alleged that the Group “recommends that its members carry AR-15 type rifles to be the ‘last line of defense against any threat.’” Then, “the bounty hunters seized Mitchell and took him to the nearby Ravalli County Detention Center, but law-enforcement officials there refused to accept Mitchell into the jail because the bounty hunters did not have power to arrest him, according to the complaint.” 

Mitchell said that “he had been jailed three months earlier on misdemeanor offenses when he hired First Call Bail and Surety to bail him out of jail and allow him to get back to his job as a concrete worker.” He and “his wife paid the bond deposit of $228 but when he missed a court appearance, the armed bounty hunters from Montana Civil Assistant Group were called in, the complaint states.” Mitchell said, “This experience turned my life upside down. […] I didn’t feel like we had another option at the time. We couldn’t afford the bond and I needed to be released to work and support my family. This incident was traumatizing. My wife is nervous to be home alone. We’re all still waiting for things to feel normal again.”

Alex Rate, legal director of the ACLU of Montana, said, “To break into someone’s house and hold him and his family at gunpoint is an absurd and dangerous overreaction for a missed court date related to a traffic violation. When these bounty hunters brought Mr. Mitchell into jail, they didn’t even have a proper warrant for his arrest. This type of vigilantism is disturbing and deeply damaging.” In addition, Andrea Woods, a staff attorney at the ACLU’s Criminal Law Reform project, stated, “It's easy to look at the bounty hunters who charged into Mr. Mitchell's home as the villains of the story. […] But the insurance companies are making billion-dollar profits off this predatory behavior. They're the ones who fund lobbyists to enact laws that enable this to continue unfettered.”

 

California Class Action Lawsuit

In February 2019, Stephen Breux, Shonetta Crain, and Kira Serna filed a class action suit against several different bail bond insurance companies in the U.S. District Court for Northern California. The class in the case included all “individuals in California who, between February 2004 and the present (‘Class Period’), paid, in full or in part, for a commercial bail bond to bail out him/herself or another in California.” 

Overall, the complaint alleged that these “companies have been engaged in a long-standing and ongoing collusive and anti-competitive conduct by conspiring to keep bail bond premiums higher than they would be had the bail-bonds market in California functioned competitively.” 

According to the consolidated amended complaint in the case, filed in June 2019, AIA Holdings Vice President Jerry “Watson directly participated in the conspiracy alleged herein and approved and ratified the conduct of AIA’s members (Defendants Allegheny Casualty Company, Associated Bond and Insurance Agency, and International Fidelity Insurance Company) and Defendant American Bail Coalition.” While “Defendant AIA has been operating in the bail market for 107 years (now underwriting $700 million of bail annually),” Watson publicly admitted, “You know how many checks has this company written to pay a bail loss? Not a single one.”

Furthermore, in an article posted on AIA’s website, Watson “publicly derided ‘price-cutting’ as a ‘cancer,’” referring to the ability of bail agencies and sureties to charge consumers premiums of less than 10 percent for bail bonds.

 

Employment of Fraudulent Bondsmen

Joaquin Cruz of Cruz Bail Bonds, who worked for Allegheny Casualty Insurance Company and International Fidelity Insurance Company, was charged with embezzlement, false imprisonment, attempted extortion, and hiring unauthorized bounty hunters following a two-year investigation by the CA Dept. of Insurance.1

 

Fine from Colorado Insurance Division

In September 2010, Insurance Law & Litigation Week reported that “the Colorado insurance division fined International Fidelity Insurance Co. $442,000 in connection with violations related to the company's bail bond business."2

 

Failure to Supervise Bondsmen

In November 2015, James Portman, as officer of Allegheny Casualty and International Fidelity, signed separate consent orders for each company issued by the Minnesota Department of Commerce in regards to “alleged violations of Minnesota law by the company that may have occurred on or before the date of this Order.” According to background on the order, the department had “received numerous complaints concerning the failure of certain bail bond producers to follow all Minnesota laws related to the solicitation, negotiation, sales and posting of bail bonds, among other things.” After reviewing the complaints, the department “initiated Market Conduct Examinations of most, if not all, of the bail bond surety companies,” along with “their contracted bail bond agencies…and appointed bail bond producers.” As a result of these examinations, “the Commissioner alleges that surety companies…have failed to adequately supervise their producers’ conduct and various producers have engaged in conduct that is allegedly in violation of Minnesota law.”

 

Corruption Allegations Against Former Chairman

According to a 2006 article in the Asbury Park Press, Philip Konvitz, then-chairman of International Fidelity, was one of the subjects of “a wide-ranging and ongoing FBI money-laundering and bribery investigation, called Operation Bid Rig.” It “began in 1998, when the FBI wiretapped conversations conducted between various public officials and Philip Konvitz.”3

 

1 Pacer.gov, Case No. 3:19-cv-00717-JST
2 Insurance Law & Litigation Week, September 20, 2010
3 Asbury Park Press, June 6, 2006