BILL ANALYSIS Ó
AB 364
Page 1
Date of Hearing: April 5, 2011
Counsel: Gabriel Caswell
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Tom Ammiano, Chair
AB 364 (Bonilla) - As Introduced: February 14, 2011
SUMMARY : Provides for the preservation of assets and property
by the court of any person charged with a single act of fraud or
embezzlement if that conduct involves the taking of $100,000 or
more.
EXISTING LAW :
1)Specifies that any person who commits two or more related
felonies, a material element of which is fraud or
embezzlement, which involve a pattern of related felony
conduct, and the pattern of related felony conduct involves
the taking of, or results in the loss by another person or
entity of, more than $100,000, shall be punished, upon
conviction of two or more felonies in a single criminal
proceeding, in addition and consecutive to the punishment
prescribed for the felony offenses of which he or she has been
convicted, by an additional term of imprisonment in the state
prison as specified. This enhancement shall be known as the
"aggravated white collar crime enhancement". The aggravated
white collar crime enhancement shall only be imposed once in a
single criminal proceeding. For purposes of this section,
"pattern of related felony conduct" is defined as engaging in
at least two felonies that have the same or similar purpose,
result, principals, victims, or methods of commission, or are
otherwise interrelated by distinguishing characteristics, and
that are not isolated events. For purposes of this section,
"two or more related felonies" are defined as felonies
committed against two or more separate victims, or against the
same victim on two or more separate occasions. ÝPenal Code
Section 186.11(a)(1).]
2)Specifies that if a person is alleged to have committed two or
more specified fraud or embezzlement related felonies, and the
aggravated white collar crime enhancement is also charged, any
asset or property that is in the control of that person, and
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any asset or property that has been transferred by that person
to a third party, subsequent to the commission of any criminal
act alleged, other than in a bona fide purchase, whether found
within or outside California, may be preserved by the superior
court in order to pay restitution and fines imposed pursuant
to this section. Upon conviction of two or more specified
felonies, this property may be levied upon by the superior
court to pay restitution and fines imposed pursuant to this
section if the existence of facts that would make the person
subject to the aggravated white collar crime enhancement have
been admitted or found to be true by the trier of fact.
ÝPenal Code Section 186.11(e)(1).]
3)Provides that to prevent dissipation or secreting of assets or
property, the prosecuting agency may, at the same time as or
subsequent to the filing of a complaint or indictment charging
two or more specified fraud or embezzlement related felonies,
and the enhancement, file a petition with the criminal
division of the superior court of the county in which the
accusatory pleading was filed, seeking a temporary restraining
order, preliminary injunction, the appointment of a receiver,
or any other protective relief necessary to preserve the
property or assets. This petition shall commence a proceeding
that shall be pendent to the criminal proceeding and
maintained solely to affect the criminal remedies provided for
in this section. The proceeding shall not be subject to or
governed by the provisions of the Civil Discovery Act as set
forth in Title 4 (commencing with Section 2016.010) of Part 4
of the Code of Civil Procedure. The petition shall allege
that the defendant has been charged with two or more specified
felonies, and is subject to the aggravated white collar crime
enhancement. The petition shall identify that criminal
proceeding and the assets and property to be affected by an
order issued pursuant to this section. ÝPenal Code Section
186.11(e)(2).]
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement : According to the author, "AB 364 allows
the state to 'freeze and seize' on behalf of one victim, or as
the result of one felony. This bill provides greater
protection than the current law. It is not reasonable that a
victim's assets should be insecure simply because they are the
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only victim or that the accused only committed one felony.
One victim or twenty, this bill provides equal protection in
the preservation of assets and property. Because of AB 364,
victims of aggravated white collar crime will no longer watch
their assets dissipate simply because they were the only
victim.
"AB 364 provides further protection and better access to just
restitution for victims of white collar crimes involving fraud
and embezzlement. By decreasing the requirements on the
number of victims and felonies, this bill will increase the
availability for victims - like middle class families and
seniors - to recover their losses from fraud and/or
embezzlement."
2)Background : According to background submitted by the author,
"In cases involving persons accused of committing two or more
felonies that potentially result in the taking or loss to
victims resulting in a loss of more than $100,000, the state
may 'freeze and seize' the assets of the accused. Current law
is designed to assist the state in ensuring the victims of
fraud and/or embezzlement have access to a just restitution.
"These 'freeze and seize' procedures are a valuable tool for
prosecutors to stop these thieves from dispersing and
liquidating assets during criminal proceedings; assets, that
in some cases, belong to the victims of these crimes. These
procedures are only available for use when the case involves
two or more victims or two or more felonies; they cannot be
used in cases involving a single victim and a single felony.
"Precedent has been established to amend the 'freeze and seize'
procedures. The Legislature lowered the monetary threshold of
the Aggravated White Collar Crime Act in AB 2827 (Chapter 431,
Statutes of 1996). In 1996, AB 2827 provided the broader
umbrella of protection the people currently enjoy under the
law. The California Court of Appeal determined in People v
Green (2004) 125 Cal. App.4th 360, 363: 'AB 2827 lowered the
threshold of the Aggravated White Collar Crime Act (enacted by
SB 950, Chapter 794, Statutes of 1995) to $100,000, therefore
strengthening the Act and protecting California's middle class
and seniors from fraud. The prior level of $500,000 exempted
too many fraud cases to be truly effective.' "
3)Legislative Intent behind Penal Code Section 186.11 : The
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aggravated white collar crime enhancement was enacted by SB
950 (Killea), Chapter 794, Statutes of 1995. According to the
author of SB 950, the purpose of SB 950 was that "it is in the
public interest to prevent the secretion and dissipation of
assets that have been taken from the victims of crimes. It is
against public policy for persons convicted of criminal
activity to enjoy the benefits of their crimes, even if a term
of incarceration is imposed. Justice suffers when persons
sentenced to state prison are able to live off the proceeds of
crime. Therefore, it is in the public interest to protect the
property or assets of persons alleged to have engaged in a
pattern of fraudulent or unlawful activities in order to
obtain restitution for the victims of crime, pay the costs of
investigation and prosecution of those persons, and recover
fines ordered by the court."
4)Argument in Support : According to the California District
Attorneys Association (the sponsor of this bill), "Ýo]n behalf
of the California District Attorneys Association (CDAA), we
are pleased to be the sponsor of your measure AB 364. This
bill would amend Penal Code section 186.11 to make the freeze
and seize procedures available in cases involving a single
victim and a single felony.
"Current law provides a procedure whereby the assets and
property of a person alleged to have committed a pattern of
related felony conduct - a material element of which is fraud
or embezzlement - involving two or more felonies and resulting
in the taking or loss of more than $100,000, may be preserved
by the superior court in order to pay restitution and fines.
Unfortunately, limiting the use of this procedure ('freeze and
seize') to cases that include two or more charged felonies in
a single criminal proceeding necessarily ignores cases
involving a single victim and a single felony.
"Penal Code section 186.11 is a tremendously effective tool
available to prosecutors in securing restitution for theft
victims, as it provides a mechanism to preserve a defendant's
assets from dissipation. However, the statute is not
flawless. Freeze and seize only applies to cases charging two
or more fraud-related felonies, against the same or different
victims, where the loss exceeds $100,000.
"Solitary victims in cases involving a single fraud-related
charge are ignored by the statute. Suppose a defendant steals
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$100,001 total from two victims in separate incidents. This
defendant could have his assets and property frozen and
ultimately liquidated to cover the costs of restitution and
fines if convicted. However, the same defendant's assets
would remain untouched if he was only charged with a single
felony involving the same dollar amount and a single victim.
There is no reason to retain this arbitrary bar to an
effective and just law enforcement tool.
"This bill reworks the existing language dealing with asset
preservation, but does not substantively alter the sections
that provide increased fines and prison terms for persons
charged with offenses dealing with multiple victims and/or
multiple felonies. As a technical matter, subdivision (d) of
PC 186.11 is proposed for deletion as it is superfluous and
nonsensical. Because the payment of restitution is already
required by law (PC 1202.4(a)(3)(B)), it makes no sense, as PC
186.11(d) currently does, to condition the payment of
restitution in cases described in this section upon the
aggravated white collar crime enhancement being found true as
long as the defendant is convicted of the underlying
offense(s).
5)Prior Legislation :
a) AB 1199 (Richardson), Chapter 408, Statutes of 2007,
declared that the existing white collar crime provisions of
Penal Code 186.11 apply where the defendant's fraud or
embezzlement caused a "loss" to the victim.
b) AB 2827 (Escutia) Chapter 431, Statutes of 1996, lowered
the threshold dollar amount for application of the
aggravated white collar crime law from $500,000 to
$100,000.
c) SB 950 (Killea), Chapter 794, Statutes of 1995, created
the aggravated white collar crime penalty enhancement and
the white collar crime "freeze and seize" law.
REGISTERED SUPPORT / OPPOSITION :
Support
California District Attorneys Association (Sponsor)
American Federation of State, County, and Municipal Employees
AB 364
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California State Sheriffs Association
Crime Victims United of California
Opposition
None
Analysis Prepared by : Gabriel Caswell / PUB. S. / (916)
319-3744