SD-21: Chad Niell & The Paper(work) Tiger

One of the Republican candidates for the seat vacated by Paul Bookout,  Chad Niell, is the President of Tiger Commissary Services, Inc., d/b/a Tiger Correctional Services.  Since the late 1990s, Tiger has provided an increasingly broad range of services to the Arkansas Department of Correction, among others, and they currently provide “inmate food service, inmate commissary, and jail management software.”  Part of this business includes “money transmission,” based on Tiger’s involvement with inmate commissary accounts.1

Everyone on the same page so far?  Good.

Now, in 2007, the Arkansas legislature passed Act 1595, which adopted the Uniform Money Services Act. Under that act, anyone who “engage[s] in the business of money transmission” must be licensed by the Arkansas Securities Department unless the company or person is specifically exempted under Ark. Code Ann. § 23-55-103. As of this writing, the Uniform Money Services Act has been in effect for well over five years.2

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Importantly, the law is clear and unequivocal that anyone who is not licensed or otherwise exempt “may not engage in the business of money transmission or advertise, solicit, or hold itself out as providing money transmission.”  SO you would expect that a multi-million-dollar company like Tiger would be aware of this licensing requirement and would apply for a license as soon as possible, if only to avoid any interruption in business.

What you would not expect to see would be Tiger Commissary Services, Inc., filing its first and only Arkansas Money Services Application with the Arkansas Securities Department on June 5, 2013.  Nor would you expect  that someone who was running for the seat that Paul Bookout resigned due to his failure to follow specific rules and laws regarding money would, himself, be the president of a company that has been operating illegally for nearly six years due to their own failure to follow specific rules and laws regarding money.

In their application, Tiger does kind of address their failure to apply for a license.  Their excuse?  Basically, “everyone else was ignorant, too!”

As for that last part, about “all other states,” the application also includes this tidbit:

Uh oh.  Illinois has had a Transmitters of Money Act since 1995.  Indiana has required licensure of money transmitters since at least 2001.  Kansas has required its current form of license application since 2001.  Kentucky passed a money transmitters act in 2006.  Louisiana?  2006.  Mississippi put their current version in place in 2010.  New Mexico actually doesn’t require a license unless you are dealing with negotiable instruments.  Oklahoma, however, has required application and license since 2007.  In Tennessee, it has been required since 1996.  And, in Texas, it has been required either since the 1980s or 1991, depending on what Act a money transmitter falls under.

Look at that list, which took all of 10 minutes to compile: Four states required licensure of money transmitters prior to 2000.  Eight required it by the time Arkansas did.  Yet Tiger, under the leadership of Chad Niell, did not bother to find out about licensing requirements or apply for those licenses in any of those states until 2013?  At no point did it cross his mind that, hey, since there are all kinds of rules for traditional banks and financial institutions, there might be some rules for non-conventional monetary institutions as well?

Those aren’t rhetorical questions, either.  A failure to get a required license in ten of the eleven states where you do business is a big deal.  Operating a money transmission business without a license, without a bond, and without oversight from the appropriate regulating bodies is a big deal.

On a more basic level, when you are running for a seat that was vacated due to illegal behavior, just showing that you can actually follow the law as it relates to your day-to-day livelihood is a really big deal.


  1. The nuts-and-bolts of the involvement are not particularly important, because Tiger would be a money transmitter whether they issued/sold prepaid access or stored value or if they received payment for the transmission of money through unconventional financial institutions.

  2. It went into effect July 30, 2007, and licensure began to be required on Jan. 1, 2008.

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17 COMMENTS

    • Interesting that you choose to point fingers and accuse Tiger Correctional Services of criminal behavior. You may be guilty of multiple trademark violations with your illustration of a copyrighted character of the Disney Company used in your September 12th article. Tigger does not appear to have any trademark information posted. It would be hard to claim “fair use” as it was used in a manner that had nothing to do with the Disney company or the character. The U.S. Copyright Office website Chapter 5 Copyright Infringement and Remedies includes both Civil and Criminal penalities for such acts. Did you pay Disney for use of the image or receive permission for use? If not,for someone so conversant on arcane banking laws in Arkansas, I find it surprising that a writer should be so ignorant or willing to flout federal laws that have been on the books for many, many years and to take on such a litigious company as Disney. Perhaps this is a case of people who live in glass houses shouldn’t throw stones. Other than the fact that it looked kind of cool, how can your justify your blantant disregard for the law? If Disney claims damage, what will your defense be? See, honest people (and I have no reason to think you are not honest) make mistakes with no intent to circumvent legal behavior. And when the make a mistake, they take steps to remedy what has been done.

      • You know what else is interesting? That you would bother to comment at length about Fair Use when you have only a tenuous grasp on what it is or how it works.

        First, I can’t “be guilty of multiple trademark violations” by infringing a copyright. You might want to learn the basic terminology of this issue before you chime in.

        Second, the four Fair Use factors favor my use of the image. It’s a limited use. It’s non-commercial. It’s newsworthy (this is important). Just because the image is copyrighted — if it is still copyrighted at this point, which I cannot say for certain without looking into it — does not make any use “criminal” or flouting of federal laws.

        Third, the ONLY concern would be the possible dilution of Disney’s trademark. This is a fact-intensive question. Would a casual reader mistakenly associate the Disney trademark/copyright with Tiger Commissary? Doubtful. Even if they might, a plaintiff would still have to show that it is likely to negatively affect DISNEY, not Chad Niell.

        Basically, unless I seek to profit specifically from that image, I’m in a rather large safe harbor. Which is why your whole “honest people” thing is bullshit; I understand fair use, and I made an informed, calculated decision to use the image. Chad Niell can’t claim the same vis-a-vis his failure to license his business.

        Other points, since I appear to be on a roll:

        1. You said, “It would be hard to claim ‘fair use’ as it was used in a manner that had nothing to do with the Disney company or the character.”

        If you actually knew what was going on, you’d understand that the whole purpose of Fair Use (either copyright fair use or trademark descriptive fair use) is that it does not have to do with Disney. The fact that it has nothing to do with Disney is what favors Fair Use.

        2. As for “arcane banking laws,” (a) I don’t find something passed six years ago to be “arcane” and (b) this is explicitly NOT a banking law.

        But, other than those two facts, plus all the other areas in your inane comment where you were absolutely incorrect, you are completely right!

        • As you found my lengthy reply tedious, I will try to be brief. Unfortunately, to counterpoint some of your assertions, I have included them in the body of this message. Consequently, it lengthens the message. For that I apologize.

          “First, I can’t “be guilty of multiple trademark violations” by infringing a copyright. You might want to learn the basic terminology of this issue before you chime in.”

          Maybe I did misspeak. I’ll correct it now. You appear to be guilty of copyright violations.

          There is no copyright symbol for the image of Tigger.

          There is no acknowledgement of who the copyrighted image is owned by.

          There is no statement of use by permission.

          “Second, the four Fair Use factors favor my use of the image. It’s a limited use. It’s non-commercial. It’s newsworthy (this is important). Just because the image is copyrighted — if it is still copyrighted at this point, which I cannot say for certain without looking into it — does not make any use “criminal” or flouting of federal laws.”

          As you have said previously, it’s easy to find information on the Internet about laws.

          The claim of Fair Use is deliberately vague and the four factors you mention are general guidelines and do not have the force of law.

          Without explicit permission from the image owner, they have the right to sue you and you would bear the burden of proof that you didn’t break the law.

          Non-commercial use has been found to be lacking as a defense in multiple claims of Fair Use cases.

          You admit you didn’t find out if the image is still copyrighted. If it is, you then also admit that you didn’t seek legal permission to use it. You have disregarded the law, which is what you are accusing Tiger Correctional Services of doing.

          Have you taken steps to rectify the situation by coming into compliance? Or if not, do you plan to continue to violate the law by using the artwork designed and owned by another to improve the quality of your own work?

          “If you actually knew what was going on, you’d understand that the whole purpose of Fair Use (either copyright fair use or trademark descriptive fair use) is that it does not have to do with Disney. The fact that it has nothing to do with Disney is what favors Fair Use.”

          You have used Disney intellectual property without proper authorization. That alone puts you into the territory of infringement. The fact that you didn’t know if the copyright was in force proves you chose to ignore the possibility that you were violating the law.

          2. As for “arcane banking laws,” (a) I don’t find something passed six years ago to be “arcane” and (b) this is explicitly NOT a banking law.

          Perhaps you mistook my use of “arcane” to mean “archaic”. Something that is arcane is mysterious that is understood by a few. That is Tiger’s main point. As mentioned by you, nobody else other than one of their competitors even knew to inquire about a law regarding money transfers.

          If you choose to claim you understood the context of the word arcane, then your excuse of a five year old law dissolves. Copyright laws go back to the 1700’s. Terms of use for trademarked materials are readily available on the Internet in explicit terms with specific examples and case law.

          While you may find my comments inane, I am trying to make a point that under the best of circumstances it is difficult to follow every regulation to the letter. Niell’s company did discover they were out of compliance through their own over sight. Even it is belated, they appear to be trying to correct that over sight.

          • You do realize that I am a lawyer, right? I’m not finding “information on the Internet about laws;” I’m basing my analysis on an actual understanding of how Fair Use works, since I’ve actually dealt with it in real life before. I’m going to trust that experience over your Wikipedia-based attempt to play lawyer on the internet, especially since none of the things you’ve referenced (e.g. the lack of a copyright symbol, etc.) changes my previous analysis.

            On top of which, I ran your first comment past a friend who has an LLM in patent law and has done nothing but IP law in various capacities for the last decade. He agreed with me. But, hey, maybe he and I are both wrong, and you’re some legal savant who just intuitively knows more than people who actually deal with this stuff for a living. I’m happy to pass along his email if you’d like to make that argument to him.

            Short version: You’re still wrong. If you have nothing to offer beyond what Google and Wikipedia make you think you know, then why don’t you save all of us the time it takes to read your comments?

          • What *I* find most hilarious is you’re trying to equate blatant, malicious law-breaking with…something. Fact is, Tiger flouted the law, and there is not enough lipstick to put on that hog.

            Ignorance of the regulations in your industry are no excuse. Even your straw man thinks you’re reaching.

            #NeedBetterTrolls

          • Hey, Mr. Obvious! We’re all waiting on your reply! //perhaps his Internet is running slow tonight. It did take almost 24 hrs for last response. #onpinsandneedles

        • “You do realize that I am a lawyer, right?”

          That statement cements my belief you feel that you have special privileges and insights and intelligence that we lesser mortals can only aspire to in our dreams.

          Until the Jonesboro Sun article, I had no idea of your existence. Your imagined fame is just now spreading to this remote corner of Arkansas.

          No, Mr. Campbell, I did not know you were an officer of the court. I merely thought you were an arrogant amateur writer who condescendingly spreads your message to the great unwashed with snark and a partisan worldview.

          As a final goodbye, I have contacted the Disney anti-piracy website with your URL. They have responded that the matter will be investigated and action will be taken if appropriate. Please keep us posted.

          • “Until the Jonesboro Sun article, I had no idea of your existence.”

            Oh, ok, then I can see why you wouldn’t know I was a lawyer.

            Actually, wait. No. No, I can’t see that at all, since the second sentence of the Sun article you just mentioned actually referred to me as an attorney.

            The posting Monday from
            attorney [Matt] Campbell with
            the Blue Hog Report….

            Yeah. So…maybe next time you should focus more on reading comprehension and less on trying to make an argument on a topic that you know nothing about.

          • Since you believe it’s possible to overcome education and experience, Mr(s). Obvious, I do look forward to your first Internet-broadcast open heart surgery later this week. You might want to start with Tim Griffin as he has no heart (or morals or anything positive, really).

            Congratulations on receiving an automated response from Disney. You must be so proud.

            #NeedBetterTrolls

      • This comment reminds me of something. Hmmm. Lemme think about it.

        Failure to understand simple concepts? Check. Complete inability to make a simple, thoughtful argument? Check. Complete hatred of the basic tenets of proper grammar? Check and check.

        Oh, I know! This is the same person who wrote the atrocious, hilariously awful press release.

        If this is Chad, please vote for better funding of our public schools so kids in the future won’t embarrass themselves as badly as you just embarrassed yourself.

        Have a great day!

  1. […] Bethune spoke at the event.  *BLUE HOGGING: We mentioned earlier this week that Blue Hog Report had an item on issues with Chad Niell‘s licencing requirements regarding services his business had […]

  2. We need to know how much, or what percentage, of Tiger’s revenues were “money transmissions”. If it’s a small amount, okay, pay the fine and go and sin no more. But if it’s significant to operations, it’s fair to ask why Tiger (or at least their lawyers or accountants, those s.o.b.s) didn’t know about it, or why it took so long to get on track. And it’s fair to ask the candidate what else he may not know about, too.

    Now, I think, to be completely fair, BHR should fully disclose the revenues it has generated on their use of Tigger and return all proceeds to Disney, in addition to submitting to any penalties Disney may impose. I’d force you to watch John Carter myself.

    • There are some balance sheets in this, though they aren’t particularly detailed. Thing is, the bulk of Tiger’s business with the ADC is providing commissary services. Except, since prisoners can’t have cash, they can only purchase things from Tiger by using an inmate-trust account, where family members deposit money for them. Tiger facilitates the creation of these inmate-trust accounts through their web-based software and, now, their kiosks. Meaning that a huge hunk of the money that they receive in their business is directly related to the money transfer services that they provide for the ADC.

      As for Disney, I’ll happily send them a check for the $0.00 that I’ve generated through the use of that picture. I won’t watch John Carter without a court order, however.

Comments are closed.