Families and friends of inmates do not have to use JPay to deposit funds in California state prisoners’ trust accounts, state regulations show.
However, effective since October 2014, the California Department of Corrections and Rehabilitation (CDCR) entered into a pilot program called Lock Box with the JPay company, according to CDCR Public Information Officer Kristina Khokhobashvili.
“The Lock Box program was started to reduce hold times on incoming inmate deposits,” said Khokhobashvili. “Inmate deposits handled through Lock Box are processed within a 14-day timeframe.”
Inmate deposits received through institution mailrooms can take up to 45 days to process because it includes a 30-day hold to ensure the funds clear the bank, Khokhobashvili said.
CDCR officials said prison staff takes negotiable instruments and/or coins (deposits) to the bank on a weekly basis.
However, families and friends may opt to send the funds directly to JPay where processing is faster.
JPay has multiple methods of depositing funds to an inmate’s account: Online electronic funds transfer service, telephone calls to customer service and walk-in store cash payments. Each of these methods has a related fee.
The Lock Box program provided by JPay is the only service that does not charge a fee, but that has not been widely publicized.
Adding to this confusion, San Quentin prison previously broadcast in English and Spanish a series of JPay video slides on closed-circuit television (SQTV). The videos informed inmates: “SQSP Inmate Trust Office will not accept inmate trust deposits after Jan. 31, 2015; they will be returned to sender at the expense of the receiving inmate.”
Another video said, “Effective Jan. 1, 2015, all money orders and cashiers checks, must now be sent to JPay” at an address provided in Los Angeles.
And another video informed inmates that forms are available “online at www.JPay.com and in the SQSP visiting area to submit with your deposit.” All videos displayed CDCR and JPay logos.
|“CDCR does not receive a share of any money routed through JPay”|
According to prison regulations, “Funds may be mailed to an inmate in the form of a money order, certified check, personal check or any other negotiable means, except cash and Travelers Check.”
Many inmates have complained that their families have had their money orders returned.
An SQTV video painted a rosier picture, saying, “The hold for money orders and cashier checks will be approximately five business days from receipt. Personal checks will be held for 10 days before deposited into the inmate’s account.”
The process could take longer.
In October, the CDCR Regulation and Policy Management Branch (RPMB) published a Notice of Change to Regulations (NCR, 15-09, CCR Title 15, Section 3140) which places further restrictions on money orders and certified checks.
Currently these deposits can be mailed to an inmate’s trust account without the sender’s name or return address on it.
“The department has made a determination to hold these funds until the sender can be identified,” the NCR says. “Correspondence containing funds without a sender and return address is an administrative problem when an inmate paroles, or cannot otherwise be specifically identified because of an insufficient inmate address.”
Citing the possibility of criminal and gang activity the NCR says, “Unidentified senders could be another inmate, parolee or probationer, trying to circumvent current regulations, which require a warden’s permission in order to correspond with inmates inside of the CDCR system.”
Meanwhile in the outside world, electronic banking has eliminated wait times for checks to clear.
According to the Check Clearing for the 21st Century Act (or “Check 21”) passed by Congress in 2003, the recipient of a paper check can create a digital version of it, an electronic “substitute check,” to do away with a physical check. The act makes it legal to scan checks into computers to make remote deposits to banks.
Khokhobashvili said remote deposits made by the CDCR are not possible at all prisons, “but we are actively implementing remote deposit to go out to all institutions in the future.”
“As of July 31, there are currently four institutions active with remote deposits,” said Khokhobashvili. “San Quentin is scheduled to begin using remote deposits this fiscal year.”
“The new service, Lock Box, has handled $263,621 since its inception began in October 2014,” until May 2015, said Khokhobashvili. “CDCR does not receive a share of any money routed through JPay.”
CDCR’s contract with JPay is due to expire on June 30 in 2016.
In 2014, Ryan Shapiro, JPay’s founder and CEO, said in a CNBC article, “Our goal is to become the nation’s digital consumer app company for prisons.”
Shapiro started JPay in 2002. Today it is the largest money transmitter for correctional departments in 31 states, according to the South Florida Business Journal.
“In 12 years, JPay says it has grown to provide money transfers to more than 1.7 million offenders in 32 states, or nearly 70 percent of the inmates in U.S. prison,” the online website publicintegrity.org reported.
According to the Center for Public Integrity, JPay handled nearly 7 million transactions in 2013, generating more than $50 million in revenue. This year the company expects to transfer more than $1 billion.
