It sounds like the police have hired Vigilant to provide automated licence place scanners for cop cars, as well as running the backend servers, so that police can catch people who owe the government court fees. But instead of getting paid upfront Vigilant works for the 25% mark up that is charged to people who made the police look for them instead of paying on their own. While there is definitely privacy concerns with the government allowing some potentially confidential information (though LPs are publicly visible and often court results are as well, I think) out of their hands, it actually sounds like a decent arrangement. Its pure profit for the police, they get better tech that allows them to easily track down people who owe the government money, and they do not even have to pay for it. And 25% is actually a far far smaller late-fee/threaten-fee then you normally see.
I think Vigilant got a pretty raw deal here, and are probably betting that their will be far far more things automated licence plate readers can be used for, and they are hoping to be on the ground flour when the market opens up. A camera on a police car, with the right backend, could almost completely replace police officers, so there is pretty unlimited growth potential for this technology.