CNHI News Service
OKLAHOMA CITY -- Try running a household or business after losing one fourth of your income.
It's a situation Rob Hudson, district attorney for Payne and Logan counties, found his office in when Wal-Mart announced in November it would chase after its own bogus checks instead of having local district attorney offices do it.
Hudson and other prosecutors say they are trying to make do, but the plight is, well, bogus. His office made $118,290 in fees in 2004 from hot checks made to Wal-Mart stores in Stillwater, Cushing and Guthrie.
"Twenty-four percent of our bogus check business was Wal-Mart," Hudson said. "It had been our biggest merchant."
In fiscal year 2005, DA offices in Oklahoma collected more than $14.1 million in fees for themselves and $13 million in restitution for merchants from the nearly 147,000 hot checks they collected.
Byron Cate, finance director for the Oklahoma District Attorneys Council, said of the $14.1 million in hot-check income for district attorneys, about $3 million came from Wal-Mart.
Wal-Mart spokesperson Sharon Weber said the company believes the nationwide change makes sense because "we have a system with better controls in place that we feel is best for all concerned."
"We wanted to standardize our bad check collection process with one vendor nationwide," Weber said, "so that we would have better control of the process and so our customers would be treated consistently across the country."
For DA offices, though, the lost revenue affects not only their bogus check divisions but also the entire operation. Oklahoma County District Attorney Wes Lane estimates his office stands to lose $660,000 per year, which he said "could pay for our entire sex crimes prosecution unit."
The Oklahoma County office collected a state-leading $2 million in bogus check fees in 2004, and Lane said Wal-Mart's portion accounted for about 8 percent of the office's total budget.
"Many people don't realize the budget of the district attorneys across the state," Lane said. "We get a piece of our funding from the state Legislature, about half. The other half has to be made up from entrepreneurial ventures like hot checks."
Writers of unfunded checks, and not the merchants, are those who pay the district attorney offices. Lane said the business or individual client gets restitution plus $25 per check; the DA office receives $114 for checks of $50 or less and $134 if it's more than that.
The loss of Wal-Mart income leaves DA offices with two choices: furlough people who help prosecute cases or find new ways to make money. Hudson and Lane are among district attorneys who have chosen the latter.
Hudson said his office is doing more to find thousands of people with old warrants, wherever they are, and telling them to make good on their accounts or they'll have law enforcement agents arrest them.
District employees also are finding new clients for hot checks among businesses and even individuals.
"It's a system," Hudson said, "that's available to anyone in the public."
The Oklahoma County office has two people whose full-time job is to meet merchants in the community and convince them to let the district attorney's office pursue their hot checks.
Lane said the bogus check division is "not unlike any small business."
"People like the program and we're doing some innovative programs around the state, trying to be more competitive with more high-tech standards," Lane said. "We've got some things in the mill that we hope will make us more competitive nationally against collection agencies."
Even before Wal-Mart's decision, district attorneys realized going after hot checks could be a dwindling venture anyway as more payments are made electronically.
Lane said his office is "taking steps that will take us to the next generation of electronic payments," including a partnership in the works with a high-tech finance recovery group.
James S. Tyree is CNHI News Service Oklahoma reporter.
