It is in keeping with the OP’s hypothetical.
I would feel that legally it would count as either an unpaid debt or a theft.
Is there a legal issue over who pays the bond?
Let’s posit a different legal sanction and say the court had sentenced Bloggins to ninety days in jail. But Bloggins has an identical twin brother. Bloggins pays his twin to show up at the jail and serve the sentence.
That’s obviously illegal. The court wasn’t just interested in having somebody spend ninety days in jail. The court’s intent was that Bloggins, the guilty party, serve the time.
The same would be true if Bloggins was fined but somebody else paid the money. These punishments are supposed to affect the person who was found guilty.
So the question is whether this principle extends to a bail bond or an appeal bond. Would the court take the position that Kevin was helping Bloggins to escape justice by letting him avoid paying his full bond cost?
I’m going to stick with my logical guess - the IRS will determine the status of the financial transaction based on obvious motivation.
If it looks like a gift and quacks like a gift, it’s a gift. Tax due from the donor. “Obviously not able to pay” at the time of the tranaction, known by K, is a good indication of this.
If it’s a transaction that helps the recipient’s overall business, it’s income for the business, depending on how the business and personal income etc. are arranged. (say, the fine is against B personally and B’s business jointly - therefore it’s helps the business).
If K knew in advance that B could not pay, good evidence it’s a gift. If he found out afterwards, and did not pursue K to bankruptcy for whatever he could get, that too sounds like a gift.
Whichever one the IRS settles on, I assume they issue a notice and request payment. If B or K choose to contest, then they show up in court and produce evidence why it is not so. I assume tax cases are essentially civil, preponderance of evidence, so the onus is not on the IRS to prove beyond a reasonable doubt - they just have to have a better, more convincing argument than the other guy.
The other question is how tax evasion law works. If they haul K into court for failure to pay a gift tax as criminal tax evasion, and he argues “I thought it was a legit transaction”, then there is presumably a chance he avoids extra penalty because it was simply a dispute over how the transaction was classified, not a deliberate attempt to evade taxes. I assume people disagree over deductions etc. with the taxman all the time, and in the end only pay the tax that the court says is due.
But for the OP title, it’s not fraud unless the DA can prove criminal intent in the action. It’s not criminal to loan someone money you know they cannot repay. The law does not fobid you frittering away money. It may be criminal if you record it in business records as something else, like “legal fees”
I recall a news article from many many years ago, where someone’s cousin sat in the defendant’s chair instead. (I assume on the theory “they all look alike”) The witnesses identified him as the perp and the judge convicted him. When they tried to spring the “but he’s not the defendant” routine, the judge said “he was identified as the offender and convicted as such, therefore he is guilty and will spend the sentence in jail.” It was also, I assume, a warning to others not to try this trick.
That sounds like an urban legend. If Saint Bad is indicted I doubt Saint Cad can be convicted for the crime. IANAL but I suspect that scenario, if it happened, would result in a mistrial and sanctions against the attorney.
I was on the jury in a real case that was slightly similar to this.
We were trying a guy for what amounted to a financial crime. The victim, the prosecution, the police, and everybody else agreed the actual criminal was the brother of the guy on trial. And of course the topic of “where’s bro and why isn’t he here?” was completely off limits. Both bros were immigrants from one of the Caribbean islands, which raises the idea that maybe other sorta ne’er-do-well bro has fled the US back to the island while this guy had a solid career and family here.
So the prosecution tried very hard to pin enough connection on the defendant so he’d become an accessory or accomplice to his brother’s crime and be convicted on that basis. The defense kept chopping away at those connections as too tenuous or frankly irrelevant, that the whole trial amounted to a de facto frame-up of the guy they could find, not the one they could not.
We acquitted. If I’d had the power I’d have suggested the judge censure the prosecution for misconduct. Substantially every connection the prosecution made was irrelevant under the law. They knew each other! One on occasion mail for missing bro arrived at defendant’s house. If the mailbox fits, you must convict!
None of us bought that crap.
And in enforcement. A lot of bail bonds work is skip tracing, and delivering the person back to the court so the bond company doesn’t need to pay up.
A bad debt for tax purposes requires the debt holder to make attempts at enforcement (sending letters is enough, but it has to be over a period of time). It doesn’t become taxable until the debtor has defaulted and enforcement has been sought.
Is there actually some sort of law which states that a defendant cannot have someone else pay the fine? That seems inherently different than time in jail.
So, cite?
I’m not sure. That’s why I was asking the question.
I don’t think the courts care who pays the bail or the fine as long as they get paid. The real issue is on the path we’re going on is what does the IRS think.
No, most definitely not. The bond is put up by anyone the defendant can get to do it. Usually it’s a family member, most often their mother. The bond companies insist on them having collateral to back up the entire amount of the assigned bail (not just the 10% bond). Usually the collateral will be the family house. If they don’t show up and can’t be located, the mother loses the house.
The amount posted for the 10% bond is not refundable. That money is lost. Even if the person is released and all charges dropped, they are out that money.
This is part of why states are starting to move away from requiring pre-trial cash bail (so far, IL, NM, NJ, NY, and WaDC). That, plus poor people can’t afford to bond out and lose months of income rotting in jail waiting for their court date. Often they’ll just plead guilty just so they can get back out, hoping they’ll be given a suspended sentence (and incurring a record).
Bear in mind that the collateral for the bond is going to for be entire amount of the bail: $100,000. Their insurance company isn’t going to cover that amount if the bond company didn’t bother to secure the bond with the full $100,000 collateral amount.
That’s the nature of the question. What if the insurance company doesn’t take that amount of collateral for whatever reason. Yes, that’s how it would be normally but not in the hypothetical.
This was my understanding as well, but @Little_Nemo claimed that fines also could not be paid by someone else, something I’ve never heard of. I was asking for a cite that fines could not be paid by someone else.
I see I was unclear in my previous post.
I did not mean to state as a fact that fines must be paid by the guilty party. IANAL and all that.
I will say that it seems like a reasonable probability. I think we’re in agreement that a prison sentence must be served by the guilty individual and not some substitute. If a fine can be paid by a third party, then we have the apparent contradiction that some court-imposed punishments can only be borne by the guilty person and other court-imposed punishments can be borne by anyone. So we would need some kind of legal standard saying which punishments were in each category.
It is usually accepted that at common law a contract to insure against liability to pay fines and penalties is contrary to public policy and void.
Holman v Johnson - 1775 (lawteacher.net)
My understanding of those cases is that you can’t enforce your insurance contract, but of course, that doesn’t mean that some random insurance company, or your mother, might just decide to pay your fine.
So, out of the goodness of their hearts, insurance companies started offering business insurance to cover fines levied on businesses or business principles, when laws started becoming more aimed at businesses. Generally limited to cover where the penalty wasn’t the result of a deliberate decision to deliberately or negligently break a law or regulation, but I suspect that’s due to an unwillingness to bet against deliberate acts rather than public policy or clear legal restrictions.
To prevent that kind of insurance, it’s now illegal in my state for Health/Safety penalties and probably Employment law, Corporations law, and Banking law.
actually in california if theyre using a car for collateral and the bond doesn’t get paid they can take the car … it usually gets sold in auction but here’s the kicker
If you sell the car for more than whats owed you have to give the extra to the car owner … my uncles crazy ex hocked her car ended up in a state-sponsored rubber room and didn’t get out to make the payments so they repoed the car… when she did get out they called her to the office for a check that was worth more than the original loan …
I’m confused here. The idea of bail or bond is that something of value is put up as a guarantee - so the state doesn’t care who, but someone is on the hook for the amount if the perp fails to show for trial, or their appeal loses, etc. In some cases this is a certified bond company, insurance company whatever - someone/something with deep pockets - that satisfies the court they can pay when called to, and unlikely to take all their assets and run. I assume when mother puts up her house for the son, the state puts a lien on the house just in case. (Or requires the owner or the perp’s lawyer to do so for them?)
As I understood, if the bond is $100K then it is the bond company that charges the $10K fee, which is their payment for putting up their money on behalf of the perp. The state as I understand charges nothing. They came out ahead for not having to house and feed the perp in jail for the year or two it took to get to trial.
There was a fellow in Toronto in the 1960’s who was injured when a bomb went off under his bed. This led to a police investigation and he was charged with financial crimes. He skipped bail and IIRC was captured about 2 years later in Spain. I recall in the news his parents complaining that because their house had been put up as collateral for bail, that the province was seizing it and “it’s like being in Nazi Germany!”. The Toronto Star’s editorial suggested that “maybe they should have been more careful who they pledged their house for…”
So how do skip tracers work? If the bond company returns the perp who skipped htey get their money back, if the perp is arrested by police they don’t?
(The bit about the defendant switching with his cousin was in a Toronto newspaper in the 60’s also. Of course, back then even newspapers were known to fall for urban legends, so who knows? Best case, teh cousin spends a while in jail before the ruling is reversed, since likely he only had a public defender.)