Silicon Valley Bail Bondsman Bagged For Allegedly Charging Extortionate, Usurious Fees In Attempt To Squeeze 75-Year Old Homeowner Out Of Valuable Property Through Foreclosure; Local Prosecutors Fear Inflated Fee Racket By Bondsmen May Be All Too Common In Area Of Skyrocketing Real Estate Values

In San Jose, California, the San Jose Mercury News reports:

• The motto of Jake's Bail Bonds -- "Whatever the situtation, I can assist'' -- is exactly the kind of assurance anxious families whose loved ones need to be bailed out of jail long to hear. But prosecutors claim that in at least one case, the only person Jake Peters sought to assist was himself.
  
  Peters, 40, was arrested last week on suspicion of trying to extort money from a Los Altos customer via a manuever that Santa Clara County prosecutors believe may be all too common in the industry. The way it works: Naive families who owe small amounts of money and don't pay on time wind up being charged outrageous fees and interest within a short period of time. If they fail to pay those fees, they risk losing the homes they've put up as collateral, so they are forced to come up with the money.
  
  "It's easy to squeeze people who have property -- no one wants to lose $2 million in equity to pay off a bail premium in this market,'' prosecutor Alison Filo said. "We are concerned there are other victims and encourage people to come forward.''
  
  Peters, who was released on his own recognizance, declined to comment.
  
  His interaction with Los Altos homeowner Greg Chiotti began six years ago after Chiotti's adult daughter was arrested for felony welfare fraud at a time when she had a drug habit her father said she's since kicked. Chiotti initially paid Peters a legitimate $1,500 fee to have her freed on $15,000 bail.
  
  Chiotti's daughter then missed at least one court appearance, prompting the judge to issue a bench warrant for $50,000, Filo said. When the woman reappeared, she was taken into custody and the court terminated the bail obligation.
  
  Peters charged Chiotti another $5,000 fee, and when he didn't pay within about six months, a lien was put on his house, triggering a foreclosure action. Chiotti, who is on a fixed income, then paid Peters the $36,000 the bail agent was demanding -- more than seven times the original $5,000 debt -- to avoid losing the valuable property on a third of an acre.
  
  Chiotti had bought the property 48 years ago and couldn't afford to replace it at Silicon Valley's sky-high prices. Filo contends Peters defrauded Chiotti by charging usurious fees.
  
  "I just wanted to save my house,'' said Chiotti, a retired district manager for the San Francisco Chronicle, explaining why he paid Peters. "The bill looked like an official receipt.''
  
  After cashing out a small investment to pay the bill, Chiotti thought that was the end of it. But he recently got another foreclosure notice, claiming he somehow owed Peters more than $100,000. The situation has been stressful for the 75-year-old man.
  
  "I can't eat and I can't sleep,'' Chiotti said. "I love this place.''
  
  This time, he consulted a friend, who urged him to call the District Attorney's Office.
  
  Peters' latest bill includes such charges as $19,500 for "recovery expenses,'' which Filo said could refer to the cost of tracking down Chiotti's daughter. The woman didn't show up in court at one point because she was in drug rehab in the Central Valley, the prosecutor said.
  
  "$19,500? Where did he have to go to get her -- Peru?'' Filo said. "She was in Mariposa.''
  
  To contact the District Attorney's Office with similar concerns, please call 408-299-7400.

Source: San Jose bail agent arrested on suspicion of extortion.