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Last year, Unicoi County Jail in Erwin, Tenn., fired an employee and accused him of theft and official misconduct after he admitted stealing money from jail inmates. The employee confessed to stealing $300 from two inmates to pay his rent shortly before the sheriff's office scheduled him to take a polygraph test.
Sheriff's deputies zeroed in on the employee after inmates complained the jail did not return all of the money they surrendered while being booked.
Continental Prison Systems Inc., which does business as EZ Card & Kiosk LLC, is offering jails kiosks that provide prepaid cards to help prevent such thefts.
In September, EZ Card & Kiosk announced it had signed a contract to install three kiosks in the Madera County (Calif.) Jail. EZ Card has contracts with a total of 10 county jails in Texas, Tennessee, Colorado and Nevada. ATM&Debit News left messages with some of the jails seeking comment, but none were returned.
One of the three kiosks in Madera County issues prepaid debit cards to inmates when they are about to be released. "The kiosk has an acceptor that accepts any size bill, and the kiosk has a pouch that accepts coins," says Frank Hofmeister, the Fresno, Calif.-based company's president and co-founder.
The kiosk deposits the funds into inmate trust accounts, and the machine issues receipts inmates keep and another that stays with their personal belongings, Hofmeister says. An inmate also can use the booking kiosk to send text messages to friends and relatives letting them know he is in jail.
Inmates use their trust account identification numbers on the receipts to purchase products or services while in jail, such as haircuts, soft drinks or bags of potato chips. Prison officials debit the inmate's trust account for the purchases.
Prisoners' relatives and friends also can deposit funds into the inmates' trust accounts using credit or debit cards or cash using either of the two other kiosks located in the jail's visitors lobby.
Kiosk Information Systems of Louisville, Colo., and another, unnamed company manufacturer the kiosks, which house safes that store the funds.
EZ Card employees empty the safes at the end of each day, depositing the funds into a local bank. The bank does not pay EZ Card interest on the deposit, which in most cases is overnight because of the rapid inmate turnover typical in county jails.
Friends and relatives also can deposit funds into inmates' trust accounts online through a dedicated EZ Card Web site, Hofmeister says.
As prisoners are released from custody, jail employees load funds from prisoners' trust accounts into nonreloadable, PIN-based prepaid debit card accounts. U.S. PayCard, a Las Vegas-based company that is an investor in EZ Card, offers the cards. Peoples Bank of Paris, Texas, issues U.S. PayCard. Peoples Bank also is EZ Card's merchant acquirer.
Released inmates can withdraw money from any ATM or make purchases wherever the Star EFT network brand is accepted, Hofmeister says.
Installation of the kiosks eliminates the need for jail personnel to write checks or issue money orders to inmates upon their release and to manage inmates' funds while they are behind bars, Hofmeister says.
There is considerable overhead required to manage inmate funds, including counting and accounting for every penny inmates surrender following their arrest. Jail employees also are responsible for depositing the funds into a local bank, says Hofmeister, adding that installation of the kiosks saves jails $150,000 to $200,000 annually in overhead expense because the institutions do not have to assign employees to monitor inmate cash.
EZ Card makes it money by charging kiosk users fees.
The company charges debit or credit cardholders 7% of the transaction amount to deposit funds into inmates' trust accounts. The transactions can be sizable, sometimes $150 to $200 per day per inmate, Hofmeister says. The company also charges former prisoners 75 cents to check their debit card balances and a 99 cent monthly card fee.
In addition, EZ Card charges cardholders a fee equal to 8% of the transaction amount to pay an inmate's bail, which Hofmeister claims is less than what a bail bondsman charges.
The kiosks provide a useful service, as charges by inmates that jail guards and other employees steal their money are not unusual, Hofmeister says. "It is a major concern and burden to county facilities," he says. "It can get complicated, ugly and demoralizing. I wouldn't put jail professionals on the same level as inmates, but sometimes there is just a hair separating them."
Nevertheless, Hofmeister says crime pays, at least from EZ Card's perspective. "We are struggling to keep up with demand," he says. "We are currently serving 7,000 [jail] beds, and by January we will be serving 12,000 to 13,000 beds," says Hofmeister.
EZ Card executives wrote to the company's business plan to serve county jails because of the facilities' high turnover rates.
Although some inmates may remain in a county jail for up to two years, many have not been convicted of a crime, so they often may be released in just two hours or within days after their arrests.
Whether the nation's jails are deploying kiosks to eliminate employee theft is difficult to determine, says Rick Neimiller, director of administration at the American Jail Association in Hagerstown, Md.
"We have no way of knowing that," he says, noting 3,300 county jails exist nationwide, ranging from facilities with two beds in rural counties to mega jails such as the Los Angeles County Jail with 10,000 beds.
"For some county jails, a fax machine is a big innovation," Neimiller says. "I would think the larger jails would adopt the use of kiosks, but I don't know." ATM
