Credit goes to youtube user "leadexample"http://www.youtube.com/user/leadexample
"Once you are able to access Blackwater enter the tower from the west side near the train station. You will see a large brick building which says [Welcome to Blackwater]. There is only one way onto this building, and the AI can't climb. Climb up to the top of the building and start to kill people. If you follow the pattern of this video you will earn $5,000 bounty in no time.
As you start killing people the law will start to arrive. At the start standing at the top of the ladder leaves you open to attack but once there are 7 or so law enforcers they all hang around the buildings. Once you hit this number you will be safe to stand at the top of the ladder, use the camera to spring from left to right, this will produce an infinite amount of AI for you to kill.
Once your bounty hit $5,000 duck behind vent on the roof until your wanted level goes away. Make a run for the train station and use a pardon letter, you should have at least 1 if you have completed the hideouts or all of Seth's missions."