BILL NUMBER: SB 968 CHAPTERED 07/24/03 CHAPTER 125 FILED WITH SECRETARY OF STATE JULY 24, 2003 APPROVED BY GOVERNOR JULY 23, 2003 PASSED THE ASSEMBLY JULY 10, 2003 PASSED THE SENATE MAY 8, 2003 INTRODUCED BY Senator Bowen FEBRUARY 21, 2003 An act to amend Sections 186.2 and 186.8 of the Penal Code, relating to organized crime. LEGISLATIVE COUNSEL'S DIGEST SB 968, Bowen. Organized crime. Existing law specifies various offenses for purposes of defining criminal profiteering activity, and patterns of criminal profiteering activity. Existing law also provides for the forfeiture of specified assets for persons who engage in a pattern of criminal profiteering activity, upon conviction of an underlying offense, as specified. This bill would add to those specified offenses, offenses related to fraud or theft against the state's beverage container recycling program, as specified. By expanding the list of offenses that may subject a person to prosecution for criminal profiteering activity, this bill would impose a state-mandated local program. Existing law provides for the distribution of proceeds from the sale of assets forfeited for conviction in connection with a pattern of criminal profiteering. This bill would, in addition, where the crimes involved are against the state's beverage container recycling program, specify distribution of the proceeds of sale of the forfeited assets, including payment to local entities for the costs of prosecution. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 186.2 of the Penal Code is amended to read: 186.2. For purposes of this chapter, the following definitions apply: (a) "Criminal profiteering activity" means any act committed or attempted or any threat made for financial gain or advantage, which act or threat may be charged as a crime under any of the following sections: (1) Arson, as defined in Section 451. (2) Bribery, as defined in Sections 67, 67.5, and 68. (3) Child pornography or exploitation, as defined in subdivision (b) of Section 311.2, or Section 311.3 or 311.4, which may be prosecuted as a felony. (4) Felonious assault, as defined in Section 245. (5) Embezzlement, as defined in Sections 424 and 503. (6) Extortion, as defined in Section 518. (7) Forgery, as defined in Section 470. (8) Gambling, as defined in Sections 337a to 337f, inclusive, and Section 337i, except the activities of a person who participates solely as an individual bettor. (9) Kidnapping, as defined in Section 207. (10) Mayhem, as defined in Section 203. (11) Murder, as defined in Section 187. (12) Pimping and pandering, as defined in Section 266. (13) Receiving stolen property, as defined in Section 496. (14) Robbery, as defined in Section 211. (15) Solicitation of crimes, as defined in Section 653f. (16) Grand theft, as defined in Section 487. (17) Trafficking in controlled substances, as defined in Sections 11351, 11352, and 11353 of the Health and Safety Code. (18) Violation of the laws governing corporate securities, as defined in Section 25541 of the Corporations Code. (19) Any of the offenses contained in Chapter 7.5 (commencing with Section 311) of Title 9, relating to obscene matter, or in Chapter 7.6 (commencing with Section 313) of Title 9, relating to harmful matter that may be prosecuted as a felony. (20) Presentation of a false or fraudulent claim, as defined in Section 550. (21) False or fraudulent activities, schemes, or artifices, as described in Section 14107 of the Welfare and Institutions Code. (22) Money laundering, as defined in Section 186.10. (23) Offenses relating to the counterfeit of a registered mark, as specified in Section 350. (24) Offenses relating to the unauthorized access to computers, computer systems, and computer data, as specified in Section 502. (25) Conspiracy to commit any of the crimes listed above, as defined in Section 182. (26) Subdivision (a) of Section 186.22, or a felony subject to enhancement as specified in subdivision (b) of Section 186.22. (27) Any offenses related to fraud or theft against the state's beverage container recycling program, including, but not limited to, those offenses specified in this subdivision and those criminal offenses specified in the California Beverage Container Recycling and Litter Reduction Act, commencing at Section 14500 of the Public Resources Code. (b) "Pattern of criminal profiteering activity" means engaging in at least two incidents of criminal profiteering, as defined by this act, that meet the following requirements: (1) Have the same or a similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics. (2) Are not isolated events. (3) Were committed as a criminal activity of organized crime. Acts that would constitute a "pattern of criminal profiteering activity" may not be used by a prosecuting agency to seek the remedies provided by this chapter unless the underlying offense occurred after the effective date of this chapter and the prior act occurred within 10 years, excluding any period of imprisonment, of the commission of the underlying offense. A prior act may not be used by a prosecuting agency to seek remedies provided by this chapter if a prosecution for that act resulted in an acquittal. (c) "Prosecuting agency" means the Attorney General or the district attorney of any county. (d) "Organized crime" means crime that is of a conspiratorial nature and that is either of an organized nature and seeks to supply illegal goods and services such as narcotics, prostitution, loan sharking, gambling, and pornography, or that, through planning and coordination of individual efforts, seeks to conduct the illegal activities of arson for profit, hijacking, insurance fraud, smuggling, operating vehicle theft rings, fraud against the beverage container recycling program, or systematically encumbering the assets of a business for the purpose of defrauding creditors. "Organized crime" also means crime committed by a criminal street gang, as defined in subdivision (f) of Section 186.22. "Organized crime" also means false or fraudulent activities, schemes, or artifices, as described in Section 14107 of the Welfare and Institutions Code. (e) "Underlying offense" means an offense enumerated in subdivision (a) for which the defendant is being prosecuted. SEC. 2. Section 186.8 of the Penal Code is amended to read: 186.8. Notwithstanding that no response or claim has been filed pursuant to Section 186.5, in all cases where property is forfeited pursuant to this chapter and, where necessary, sold by the Department of General Services or local governmental entity, the money forfeited or the proceeds of sale shall be distributed by the state or local governmental entity as follows: (a) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage or security interest, if any, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all such lienholders and protect their interests and may, at its discretion, order the proceeds placed in escrow for up to an additional 60 days to ensure that all valid claims are received and processed. (b) To the Department of General Services or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized under this chapter. (c) To the general fund of the state or local governmental entity, whichever prosecutes. (d) In any case involving a violation of subdivision (b) of Section 311.2, or Section 311.3 or 311.4, in lieu of the distribution of the proceeds provided for by subdivisions (b) and (c), the proceeds shall be deposited in the county children's trust fund, established pursuant to Section 18966 of the Welfare and Institutions Code, of the county which filed the petition of forfeiture. If the county does not have a children's trust fund, the funds shall be deposited in the State Children's Trust Fund, established pursuant to Section 18969 of the Welfare and Institutions Code. (e) In any case involving crimes against the states beverage container recycling program, in lieu of the distribution of proceeds provided for by subdivision (c), the proceeds shall be deposited in the penalty account established pursuant to subdivision (d) of Section 14580 of the Public Resources Code, except that a portion of the proceeds equivalent to the cost of prosecution in the case shall be distributed to the local prosecuting entity that filed the petition of forfeiture. SEC. 3. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.