Residents of a private halfway house in Colorado Springs say they struggled for weeks to access personal funds for food, medication and other necessities while their halfway house-issued checks were rejected by banks and check-cashing services.
The snag at Community Alternatives of El Paso persisted despite administrators’ promises to fix the problem and held up money that belongs to residents, who are required to hand over their paychecks and other income as a condition of their incarceration. The halfway house takes out money for rent and restitution and issues residents periodic allowances.
Remaining funds in the residents’ accounts are returned, minus any rent and restitution, after their release.
Starting in late August, CAE’s bank, Community Banks of Colorado, repeatedly refused to honor the allowance checks, but not before some residents believed they had successfully deposited them.
The resulting confusion caused some residents to overdraw their personal checking accounts, deepening their financial woes as they prepared for release, several residents told The Gazette. Others were turned away from check-cashing services, forcing them to borrow money from family members and friends to cover their expenses.
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Although food is provided at CAE, many residents leave on work release and eat outside the facility, and others avoid the food that’s served, which comes from the El Paso County jail.
For Robert Thompson, the issue was the latest hurdle to obtaining a critical seizure medication while incarcerated at CAE.
After being transferred to CAE from the El Paso County jail in July, Thompson said he went two days without his daily medication. When administrators took him to an urgent care center after his repeated complaints, a provider there prescribed him half of his normal dose of 1,000 mg twice daily.
Thompson attributes his struggle over medications for contributing to seizures while in CAE custody that led to two trips by ambulance to UCHealth Memorial Hospital Central, where doctors restored his normal prescription and said his seizures could cause brain damage and even death.
“They are endangering my life,” said Thompson, 59, who estimated that up to a third of the population — about 170 people as of August — struggled to access their money.
Thompson provided receipts from Walmart and King Soopers showing that his CAE checks were rejected by check-cashing services at a time he said he needed to refill his prescription. He contacted CAE and eventually managed to get the check cashed on a return trip and purchased a refill two days before running out.
He said Walmart and King Soopers had so many problems with checks from CAE that they stopped accepting them.
In a memo posted Sept. 23 at CAE, and obtained by the newspaper, administrators instructed inmates not to cash checks issued between Aug. 20-Sept. 22, citing a “system error at the bank.”
Two other residents said they had checks returned prior to that period, and receipts examined by the newspaper showed problems continued afterward.
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The problem with halfway house checks hit just as a lengthy COVID-19 outbreak at CAE began to resolve, after a period in which dozens of sickened and exposed residents were held in quarantine in a vacant prison next door to the halfway house, spawning complaints alleging unsanitary conditions, sweltering heat and a water fountain that produced “milky” water, which residents documented in photos.
The GEO Group Inc., the for-profit company that runs CAE, disputed those claims. The vacant prison, adjacent to CAE in the 2900 block of East Las Vegas Avenue, was formerly the site of GEO Group-run Cheyenne Mountain Re-entry Center, which closed earlier this year after a public clash with Gov. Jared Polis’ administration, which reported “monthly” problems with the facility describing it as chronically understaffed. CAE administrators said the building had working utilities and was suitable for habitation.
The halfway house was removed from the county’s coronavirus outbreak list Sept. 26, after 10 residents and one staff member recovered from the illness and no new cases emerged, said El Paso County spokeswoman Natalie Sosa.
Christine Burns, of the El Paso County Community Services Department, which helps oversee halfway houses in Colorado Springs, said CAE notified her office about the issue concerning residents’ checks on Tuesday, the same day the newspaper contacted CAE and Burns for comment, and roughly seven weeks after CAE’s memo to residents said the problem began. Burns referred questions to CAE.
Brian Miller, a spokesman for the Boca Raton, Fla.-based GEO Group, declined to address how many checks were returned.
In a written statement, Miller attributed the problem to “miscommunication” between the halfway house and its bank.
“In August 2020, law enforcement informed Community Alternatives of El Paso (CAE) staff that the facility’s bank account and routing numbers had been compromised. As a result, CAE immediately implemented a fraud protection program called Positive Pay, which requires staff to proactively provide a list of approved check numbers and amounts to the bank each day. A check that is not listed in the Positive Pay system is flagged as an exception and is not cashed.
“During implementation, there was a miscommunication that resulted in exceptions and rejected resident checks, even though resident funds were available at the time.”
Checks did not technically bounce and CAE “always has been in good standing” with the bank, Miller said.
The statement didn’t address why the problem has lasted more than six weeks and Miller declined to elaborate about how the halfway house’s bank account was “compromised,” except to say that no money was lost. He also wouldn’t comment on Thompson’s claims about being deprived his seizure medications, citing Thompson’s medical privacy.
“There are internal procedures for residents to express care-related concerns,” Miller said. Thompson said that after his transfer from the county jail, he was taken for medical attention only after he refused to sign any program documents.
CAE staff are working to resolve the problem with returned checks and “local businesses will begin cashing residents’ checks by the end of this week,” Miller said Thursday.
Miller added that the same fraud prevention program that apparently made some residents’ accounts inaccessible starting in late August “will further protect their financial assets.”
Burns provided the newspaper with a letter from Staci Bills, a vice president at Community Banks of Colorado, offering few details, but acknowledging a “miscommunication regarding our fraud penetrative tools causing some of CAE’s checks to be returned.”