BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair A 2011-2012 Regular Session B 1 2 9 AB 1293 (Blumenfield) 3 As Amended June 28, 2011 Hearing date: July 5, 2011 Penal Code MK:dl ELDER ABUSE: THEFT OR EMBEZZLEMENT HISTORY Source: Author Prior Legislation: AB 1199 (Richardson) - Ch. 408, Stats. 2007 AB 2827 (Escutia) - Ch. 431, Stats. 1996 SB 950 (Killea) - Ch. 794, Stats. 1995 Support: (All support to prior version of bill) Consumer Attorneys of California; California Police Chiefs Association; Office of the Attorney General; AARP; California Senior Legislature Opposition:None known Assembly Floor Vote: Not relevant KEY ISSUE WHEN A DEFENDANT IS CHARGED WITH FELONY FINANCIAL ABUSE AGAINST AN ELDER OR DEPENDENT ADULT IN WHICH OVER $100,000 WAS TAKEN OR LOST, (More) AB 1293 (Blumenfield) Page 2 SHOULD THE PROSECUTION BE AUTHORIZED TO SEEK AN ORDER SEIZING AND HOLDING THE DEFENDANT'S ASSETS? PURPOSE The purposes of this bill are to allow the seizing and preservation of assets of a criminal defendant charged with felony elder or dependent adult financial abuse. Existing law provides that where a defendant is convicted of two or more related felonies involving fraud or embezzlement, and the pattern of conduct involves the taking or loss of more than $100,000, the defendant shall be punished by an "aggravated white collar crime enhancement" of specified prison enhancement term. The following applies to such cases: The enhancement imposed only once in a criminal proceeding. A "pattern of related felony conduct" means engaging in at least two felonies that have the same or similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated and are not isolated events. "Two or more related felonies" are felonies committed against two or more separate victims or against the same victim on two or more occasions. If the crimes involved taking or loss of more than $500,000, the additional prison term shall be two, three, or five years. If the crimes involved taking or loss of between $100,000 and 500,000, the additional prison term shall be one or two years, as specified. (Pen. Code §§ 186.11, subd. (a)(1)-(3) and 12022.6, subd. (a)(1)-(2).) Existing law allows the prosecution in a case involving an aggravated white collar crime enhancement to obtain an order for the seizing and holding of the defendant's assets in order to (More) AB 1293 (Blumenfield) Page 3 prevent the defendant from hiding or dissipating the assets. (Pen. Code § 186.11, subd. (e).) Existing law provides that a person who claims an interest in the protected property may file a claim concerning his or her interest in seized property, as specified. (Pen. Code § 186.11, subd. (e)(6).) Existing law provides that the court shall order a defendant subject to punishment under the white collar crime provisions to make full restitution to victims. The court can order the defendant to remain on probation for up to 10 years in order to ensure payment of restitution. The provisions for protection of assets seized from defendants shall remain in effect through sentencing in order to satisfy fines and restitution orders. (Pen. Code § 186.11, subds. (d) and (i)(1)(A)-(B).) This bill provides for the preservation of assets and property by the court of any person charged with felony elder or dependent financial abuse if that conduct involves the taking or loss of $100,000 or more. RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION For the last several years, severe overcrowding in California's prisons has been the focus of evolving and expensive litigation. As these cases have progressed, prison conditions have continued to be assailed, and the scrutiny of the federal courts over California's prisons has intensified. On June 30, 2005, in a class action lawsuit filed four years earlier, the United States District Court for the Northern District of California established a Receivership to take control of the delivery of medical services to all California state prisoners confined by the California Department of Corrections and Rehabilitation ("CDCR"). In December of 2006, (More) AB 1293 (Blumenfield) Page 4 plaintiffs in two federal lawsuits against CDCR sought a court-ordered limit on the prison population pursuant to the federal Prison Litigation Reform Act. On January 12, 2010, a three-judge federal panel issued an order requiring California to reduce its inmate population to 137.5 percent of design capacity -- a reduction at that time of roughly 40,000 inmates -- within two years. The court stayed implementation of its ruling pending the state's appeal to the U.S. Supreme Court. On May 23, 2011, the United States Supreme Court upheld the decision of the three-judge panel in its entirety, giving California two years from the date of its ruling to reduce its prison population to 137.5 percent of design capacity, subject to the right of the state to seek modifications in appropriate circumstances.In response to the unresolved prison capacity crisis, in early 2007 the Senate Committee on Public Safety began holding legislative proposals which could further exacerbate prison overcrowding through new or expanded felony prosecutions. (More) This bill does not appear to aggravate the prison overcrowding crisis described above. COMMENTS 1. Need for This Bill According to the author: Every year in California, a growing number of senior citizens are victimized by those who steal the money they worked a lifetime to save. Prosecuting these cases can be extremely complex, especially in instances where financial predators have stolen hundreds of thousands of dollars. While district attorneys are spending scarce taxpayer dollars prosecuting these complex cases, the defendants often are defending themselves in court using the assets they stole from the elderly victim. Even when cases are successful, victims are unable to recover their stolen property if it has been transferred away or spent on exorbitantly priced defense attorneys working on behalf of the perpetrator. To address this problem, in cases where more than $100,000 has been stolen, Assembly Bill 1293 allows the courts to freeze the assets of a financial predator to ensure that the victim is made whole once the defendant has been convicted. AB 1293 prevents financial predators from spending down or secreting away stolen assets while they are at trial. 2. " Seize and Freeze" for Elder Abuse Cases Under existing law, a person convicted of elder financial abuse will be required to pay restitution to the victim or the (More) AB 1293 (Blumenfield) Page 6 victim's estate. However, there are times when the defendant may have liquidated their assets before the conviction and thus have nothing left with which to pay the restitution. This bill would allow a prosecutor to freeze the defendant's assets, in elder or dependent adult financial abuse cases at the time of the filing of the complaint and thus those assets will be available upon conviction to help pay restitution. 3. Similar Legislation AB 364 (Bonilla) which passed this committee on June 7, 2011 (5-2) and is currently on the Senate Floor Third Reading File, 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 or loss of $100,000 or more. This bill would have some potential overlap with Bonilla but would cover those elder financial abuse situations where theft and not fraud or embezzlement was involved. ***************