Crime & publishing

Livermore, Calif. (FSB Magazine) -- When Fernando Ortega talks about the seven days and seven nights he spent in a Los Angeles County jail, he recalls the nine-foot-by-nine-foot cell he shared with three murderers, the "stinking urine smell," and finally, the magazine. "If it weren't for the magazine," he says, recalling the publication that distracted him from his menacing surroundings, "who knows what would have happened to me?"

The magazine he means is Crime, Justice & America, a five-year-old, surprisingly professional-looking 40-page upstart quarterly with articles written by lawyers and other criminal-justice-system professionals and spotlighting issues most glossies prefer to avoid. It features stories about serial killers and FBI profilers, legal discussions such as "11 reasons not to talk after arrest," tutorials on what to expect from your attorney and bail bondsman, humor columns titled "Crazy Laws" and "Weird World of Crime," as well as several pages of relevant advertising. "I read it, like, seven times," says Ortega, 50, who was arrested and later convicted on assault and domestic-violence charges. "I also found my bail agent in it."

CJA (cja.us) is beginning to tap into a previously overlooked - or just misunderstood - niche in the jailhouse marketplace. The magazine, based in Livermore, Calif., targets not only inmates looking to be entertained or defended but also lawyers and bail bondsmen who pay relatively reasonable prices to reach prospective clients. "This is the first magazine we've seen like this," says Lt. Jerry Maldonado, who until recently was in charge of about 3,600 inmates at the Santa Rita Jail in Dublin, Calif., another institution in which CJA is avidly read. "There's a need, and [CJA] is filling it."

Now in its fifth year, the quarterly arrives at more than 60 county jails in 37 counties on the West Coast, 25% more than last year. With a national circulation of about 120,000, CJA boasts new editions in Clackamas County, Ore.; Tulare County, Calif.; and King County, Wash. It is expected to generate more than $300,000 in revenue this year, up from around $200,000 in 2006.

All that activity makes Ray Hrdlicka, the 48-year-old founder of CJA, happy - but not satisfied. He has outsized ambitions. As FSB goes to press, he is about to launch Crime, Justice & America Talk Radio, a half-hour daily program to air on the Internet, and over the next year, he plans more county editions of the magazine, each with the same content but with advertising targeted to its specific geographical area, as well as a larger national edition with different content. The ultimate plan, he explains in his smooth-talking salesman's voice, is to build a multimedia empire that everyone knows, "like America's Most Wanted," he notes expansively.

It won't be easy. Jails in Sonoma County have refused to deliver his magazine to inmates, arguing that its ads violate guidelines set by California's Department of Insurance prohibiting bail bondsmen from soliciting inmates while they are incarcerated. In addition, the work of distributing a mass mailing to prisoners posed a drain on a jail staff that already had its hands full. "Three hundred magazines came in one day, and that tripled the jail's amount of mail," explains Sonoma County deputy counsel Anne Keck. "The mail staff got it and basically freaked out."

Hrdlicka sued the sheriff of the county on First Amendment grounds and proposed to distribute 200 copies a week, divided between the county's two jails. The case stretched on for more than 2½ years in a San Francisco federal district court, with legal fees soaring to $150,000 and three other California counties joining Sonoma in banning CJA. When a decision finally came down last September, the judge ruled against Hrdlicka's proposed amount, though other options have not yet been considered. Hrdlicka decided not to appeal the Sonoma case but is planning to file a similar lawsuit in Butte County, Calif. "It could be a long time until this mess is figured out," he admits.

Hrdlicka favors Hawaiian shirts and has retreating gray hair and the heavy eyes of someone who rarely sleeps. When he arrived on the West Coast from Wichita in 1983, with $87 and a Shell credit card, he worked as a private investigator until, deciding that the industry had "too many retired FBI agents and sheriffs," thus making it too competitive, he slipped into the shadowy world of bounty hunting and finally into the bail-bond business where, for better or worse, he made his name.

Bail bondsmen - or bail agents, as they are often now known, since many are women - backed by insurance companies, arrange bail payments or the promise of payment for criminal suspects who would not otherwise be able to post the money required by a judge as assurance that they will show up for trial, usually for a 10% fee. The bail payment is exonerated once the client shows up in court. If the accused skips town, the bail bondsman is liable to the court for the full bail amount, so most require collateral such as a home or car.

Hrdlicka's company, H&H Bail Bonds, along with about half a dozen similar firms he purchased through a holding company, Emergency Financial Services, found a niche among suspects who have no hard collateral. Unlike most bail-bond firms, H&H relied heavily on bail bonds secured only by the creditworthiness of the client or the client's family and friends. It also allowed its 10% fee to be paid in installments. Clients came in droves, allowing Hrdlicka to expand throughout California and then nationwide. By the early 1990s H&H was one of the country's largest retail bail-bond outfits, with offices in ten states and 300 employees, including 65 bounty hunters and seven in-house lawyers. The company wrote about $300 million in bonds each year and raked in about $30 million in revenue, according to Hrdlicka. "Things were good," he exclaims. He drove a company-leased Jaguar and bought a 102-acre property, complete with ranch house, in the lush wine country of Livermore.

But then, suddenly, his enterprise went spiraling down the drain. Hrdlicka says he had trouble managing the rapidly growing business, but critics blamed his increasingly lax bond criteria. Soon convicts were fleeing without paying, and Hrdlicka says his employees stopped doing such a good job of catching them. Debt mounted on lost bail. In 2000, one of the insurance companies that backed H&H sued for millions in lost forfeitures. Seven months later, having filed for personal bankruptcy protection and owing hundreds of thousands of dollars in attorney fees, Hrdlicka saw the parent company, Emergency Financial Services, implode and file for Chapter 11 bankruptcy protection. In July 2001, after failing to sell the business, Hrdlicka dissolved it under Chapter 7 of the bankruptcy code. "My wife married the CEO of a multimillion-dollar corporation, and I had to tell her, 'Honey, you weren't with me when I built this, but I have to do this again in another industry. We're broke.' "

The bankruptcy settlement requires him to repay $1.3 million to his creditors in a series of annual installments, which increase as the years pass and range from $20,000 to $66,000. Others would have quit, but Hrdlicka, oddly enough, was inspired by being penniless and having his name dragged through the mud, most notably by the Wall Street Journal in a front-page takedown.

He started CJA as a solo show out of his Livermore garage. For seed money, he presold $25,000 worth of ads with his compelling pitch for a market - county jails that had never been served before. He persuaded friends and family members to put up additional capital and asked others to contribute articles free. It was tight for a while, but by the third year he was covering most of his costs, though he is still borrowing money from his supporters to make his court-required payments.

James Devitt, a Santa Monica - based criminal-defense lawyer, was one of the magazine's first advertisers. "Literally, it's going right to my clients," he says. "Sure, I get lots of $4 collect calls. But even if I take on one out of ten, I can bring in $20,000 a month off one ad."

Today, Hrdlicka employs a team of freelancers to put the magazine together, and he has grand plans for the future. While he refines the radio show, a 120-page national edition of the magazine - which will include stories relating to the federal government on topics such as the Bureau of Alcohol, Tobacco, and Firearms, the border patrol, and the U.S. military, as well as a slicker look to appeal to retail merchants - is in its beginning stages. There also are new editions planned for New Jersey and Florida.

Still, through all this planning, the failed Sonoma County case and the possibility that he may need to file another lawsuit to help grow his business loom as reminders of how quickly things can go terribly wrong in a young enterprise. "I know there are always risks," he says.

He's not talking solely about business. Just as Hrdlicka was navigating the bankruptcy settlement and launching his magazine, his wife died suddenly of cancer, and he was left with two young children, now ages 6 and 8. "I have two boys relying on me. That's an awesome responsibility," he says. "So I have to make this business a success. It's not a question. In other words, no obstacle is too big, period. I must."

INSIDE SCOOPS

Headlines from Hrdlicka's magazine demonstrate its fresh perspective on jail life:

: So You've Been Arrested... Now What?

: The Dirty Dozen: 12 Things Not to Say to Police When You Get Caught

: The Way of the Wiseguy: An Interview With "Donnie Brasco"

: A Defendant's Guide to Courtroom Etiquette

: The Eight Tools of Anger Control

: The U.S. Patriot Act: Why It Should Scare You

: Preparing for the Probation Interview

: Last Suppers on Death Row

To give feedback, please write to fsb_mail@timeinc.com.

Additional Reporting By Brandi Stewart contributed to this article.