BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC SAFETY Senator Loni Hancock, Chair S 2011-2012 Regular Session B 1 1 3 SB 1133 (Leno) 3 As Amended April 18, 2012 Hearing date: April 24, 2012 Penal Code JM:mc HUMAN TRAFFICKING OF MINORS FOR SEXUAL PURPOSES: FORFEITURE OF INSTRUMENTALITIES AND PROFITS OF THE CRIME HISTORY Source: Attorney General of California Prior Legislation: AB 90 (Swanson) - Ch. 457, Stats. 2011 AB 12 (Swanson) - Ch. 75, Stats. 2011 SB 677 (Yee) - Ch. 635, Stats. 2010 AB 17 (Swanson) - Ch. 211, Stats. 2009 SB 22 (Lieber) - Ch. 240, Stats. 2005 Support: Crime Victims United of California Opposition:American Civil Liberties Union (NOTE: THIS BILL IS ANALYZED AS PROPOSED TO BE AMENDED IN COMMITTEE TO CORRECT A DRAFTING ERROR. SEE COMMENT #5 FOR AN EXPLANATION.) KEY ISSUE (More) SB 1133 (Leno) PageB SHOULD PROPERTY THAT WAS PUT TO SUBSTANTIAL USE FOR FACILITATING HUMAN TRAFFICKING OF MINORS FOR COMMERCIAL SEXUAL ACTS, AND PROCEEDS OF SUCH ACTIVITY, BE SUBJECT TO FORFEITURE UPON CONVICTION OF THE DEFENDANT FOR HUMAN TRAFFICKING? PURPOSE The purposes of this bill are to 1) provide that where a person is convicted of human trafficking of a minor for sexual purposes, the instrumentalities used to commit the crime, as specified, and the profits of the crime shall be forfeited; and 2) provide that 50% of the forfeiture proceeds shall be distributed to the Victim-Witness Assistance Fund for grants to community organizations serving human trafficking victims and 50% of the proceeds shall be distributed to the General Fund of the state or county, depending on whether the Attorney General or district attorney prosecuted the matter. Existing law includes numerous crimes concerning sexual exploitation of minors for commercial purposes. These crimes include: Pimping: Deriving income from the earnings of a prostitute, deriving income from a place of prostitution, or receiving compensation for soliciting a prostitute. Where the victim is a minor under the age of 16, the crime is punishable by a prison term of three, six or eight years. (Pen. Code § 266h, subds. (a)-(b).) Pandering: Procuring another for prostitution, inducing another to become a prostitute, procuring another person to be placed in a house of prostitution, persuading a person to remain in a house of prostitution, procuring another for prostitution by fraud, duress or abuse of authority, and commercial exchange for procurement. (Pen. Code § 266i, subd. (a).) Procurement: Transporting or providing a child under 16 to another person for purposes of any lewd or lascivious (More) SB 1133 (Leno) PageC act. The crime is punishable by a prison term of three, six, or eight years, and by a fine not to exceed $15,000. (Pen. Code § 266j.) Taking a minor from her or his parents or guardian for purposes of prostitution. This is a felony punishable by a prison term of 16 months, two years, or three years and a fine of up to $2,000. (Pen. Code § 267.) Child pornography production: Using a minor to assist in the making of child pornography for commercial purposes is a felony, with a prison term of 3, 6, or 8 years. (Pen. Code § 311.4, subd. (b).) Existing law provides that any person who deprives or violates the personal liberty of another with the intent to effect or maintain a felony violation of specified prostitution related offenses, use of minor in producing or distributing obscene material or child pornography, extortion, or to obtain forced labor or services, is guilty of human trafficking. (Pen. Code § 236.1, subd. (a).) Existing law provides that a victim of human trafficking may bring a civil lawsuit for actual damages, compensatory damages, punitive damages, injunctive relief, any combination of those, or any other appropriate relief. In such a lawsuit, the plaintiff may be awarded up to three times his or her actual damages or $10,000, whichever is greater. In addition, punitive damages may also be awarded upon proof of the defendant's malice, oppression, fraud, or duress in committing the act of human trafficking. (Civ. Code § 52.5.) Existing law provides that where the victim of human trafficking is an adult, the offense is punishable by a prison term of 3, 4 or 5 years in prison and a fine of up to $10,000. (Pen. Code § 236.1, subd. (b).) Existing law provides that if the person trafficked is a minor, the offense is punishable by 4, 6 or 8 years in prison and a fine of up to $10,000. Where the minor was trafficked for a (More) SB 1133 (Leno) PageD commercial sex act, the maximum fine is $100,000. (Pen. Code § 236.1, subd. (g).) Existing law provides that all fines imposed for human trafficking shall be deposited in the Victim-Witness Assistance to fund services for human trafficking victims. At least 50% of such fines shall be granted to community-based organizations. (Pen. Code § 236.1, subd. (h).) Existing law defines "unlawful deprivation of liberty" includes sustained and substantial restriction of another's liberty accomplished through fraud, deceit, coercion, violence, duress, menace or a credible threat of injury to the victim or another person. (Pen. Code § 186.22, subd. (d).) Existing law includes the criminal profiteering asset forfeiture law. Criminal profiteering forfeiture applies where the defendant is convicted of a specified offense and the defendant has engaged in a pattern of criminal profiteering activity, as specified. (Pen. Code § 186.3.) The following assets or property is subject to forfeiture: Any property interest whether tangible or intangible, acquired through a pattern of criminal profiteering activity. All proceeds of a pattern of criminal profiteering activity, which property shall include all things of value that may have been received in exchange for the proceeds immediately derived from the pattern of criminal profiteering activity. Existing law states that forfeited cash and proceeds of the sale of forfeited property shall be distributed as follows: To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage, or security interest, up to the amount of his or her interest in the property or proceeds, as specified. To the Department of General Services or local governmental entity for all expenditures incurred in (More) SB 1133 (Leno) PageE connection with the sale of the forfeited property. To the State General Fund or the general fund of the local governmental entity, whichever prosecutes (Pen. Code § 186.8), except in the child pornography or recycling fraud cases. In a case of fraud involving the state recycling program, to a special fund designated in the Public Resources Code. In the case of child pornography crimes, to the county children's trust fund or State Children's Trust Fund. In a case involving human trafficking of minors for purposes of prostitution or lewd conduct, or a case of procurement of a minor, to the Victim-Witness Assistance Fund for child sexual exploitation and abuse counseling and prevention programs. Fifty percent of the funds shall be granted to community-based organizations that serve minor victims of human trafficking. Existing law includes human trafficking (Pen. Code § 236.1) in the list of crimes for which a forfeiture of assets can be sought for criminal profiteering. (Pen. Code § 186.2, subd. (a)(28).) Existing law includes abduction or procurement by fraudulent inducement for prostitution to the list of crimes for which a forfeiture of assets can be sought for criminal profiteering. (Pen. Code § 186.2, subd. (a)(31).) Existing law provides that any case in which the defendant persuaded, induced, coerced or forced a minor to engage in a commercial sex act can be the basis of criminal profiteering asset forfeiture, as specified. (Pen. Code § 186.2, subd. (a)(29).) Existing law provides that the proceeds of criminal profiteering in cases of commercial sexual exploitation of minors, as specified, shall be distributed to the Victim-Witness Assistance Fund for child sexual exploitation and abuse counseling and prevention programs. Fifty percent of the funds shall be (More) SB 1133 (Leno) PageF granted to community-based organizations that serve minor victims of human trafficking. (Pen. Code § 186.2, subd. (a)(30).) Existing law defines a commercial sex act as sexual conduct for which anything of value is given or received by any person. (Pen. Code § 186.2, subd. (a)(29)-(30).) This bill provides that where a person has been convicted of sexual trafficking of a minor, the interest of the defendant in a vehicle, boat, airplane, money negotiable securities, real property, or other thing of value "that was put to substantial use for the purpose of facilitating" that crime shall be seized and forfeited. This bill provides the following property shall not be subject to forfeiture: Real property used as a family residence or for other lawful purposes, or that is owned by two or more persons, one of whom had no knowledge of its use to facilitate sex trafficking of minor. Interest in a passenger motor vehicle, as specified,<1> if there is a community property interest in the vehicle by a person other than the defendant and the vehicle is the sole passenger vehicle for the defendant's immediate family. This bill provides that real property subject to forfeiture cannot, absent exigent circumstances, be seized without notice --------------------------- <1> The bill refers to vehicles that may be driven with either a Class C (two axle passenger vehicle or specified agricultural vehicle), M1 (motorcycle) or M2 (moped) license, as described in Vehicle Code Section "12804." Section 12804 was repealed in 1993. It appears that the provisions in former Vehicle Code Section 12804 describing the classes of drivers' licenses now appear in Section 12804.9, subdivision (b)(3)-(5).) This error also appears in the drug asset forfeiture law, Health and Safety Code Section 11470, subd. (e).) (More) SB 1133 (Leno) PageG to interested parties and a judicial hearing to determine whether or not seizure is necessary to protect the property pending resolution of the case. The prosecutor shall have the burden to establish probable cause for the seizure. This bill describes the procedures for filing and litigating the forfeiture action: The prosecutor files the forfeiture petition in the court where the human trafficking charges are pending. The prosecutor gives notice to all persons who may have an interest in the affected property. The notice shall inform the person how to affirm or deny the prosecutor's allegations and how the person may assert a claim to the property. The prosecutor shall file a lis pendens<2> as to any real property, as specified. A person may file a verified claim as to any property within 30 days of notice or the person shall default. This bill provides that if the defendant denies the petition allegations, the forfeiture action shall be heard in the court where the underlying human trafficking case is tried. If the defendant is found guilty, the forfeiture matter shall be promptly tried to the jury that heard the criminal case, a new jury, or the court upon waiver by the parties of a jury trial. The prosecutor has the burden to prove beyond a reasonable doubt that the property is subject to forfeiture. This bill provides that the court may grant the prosecutor's request to preserve property alleged to be subject to forfeiture: The court may issue an injunction to prohibit sale or transfer of the property. -------------------------- <2> Formal notice of pending legal action involving real property. (More) SB 1133 (Leno) PageH The court may appoint a receiver to take possession of and manage the property. The court may not make such orders without probable cause and the court must give interested parties notice and an opportunity to be heard on the matter. The court may order a surety bond to protect the property and parties; and the court shall protect the interests of person who were involved in the same enterprise as the defendant, but who were not involved in human trafficking. This bill provides that if the jury or court finds that the defendant was engaged in human trafficking of a minor for sexual commerce and that the property is forfeitable, the property shall be forfeited and distributed, as specified. This bill provides that if the property is subject to forfeiture, but that a person holding a specified valid lien interest in the property had no knowledge of the use of the property in trafficking, the person may pay to the state the difference between his or her interest and interest of the registered owner of the property and thereby obtain the property. This bill provides that the proceeds of forfeited property shall be distributed as follows: To the innocent purchaser or holder of a specified security interest, up to the amount of the person's interest. To the applicable government entity for the costs of selling the property. 50% to the General Fund of the state or county, depending on whether the Attorney General or the district attorney prosecuted the case. 50% to the Victim-Witness Assistance Fund for grants, as specified, to community-based organizations that serve human trafficking victims. This bill provides that in a proceeding involving human (More) SB 1133 (Leno) PageI trafficking under the criminal profiteering asset forfeiture rules - not under the new forfeiture system described in this - the proceeds of the forfeiture shall be deposited in the general fund of the state or county that prosecuted the matter. RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION ("ROCA") In response to the unresolved prison capacity crisis, since early 2007 it has been the policy of the chair of the Senate Committee on Public Safety and the Senate President pro Tem to hold legislative proposals which could further aggravate prison overcrowding through new or expanded felony prosecutions. Under the resulting policy known as "ROCA" (which stands for "Receivership/Overcrowding Crisis Aggravation"), the Committee has held measures which create a new felony, expand the scope or penalty of an existing felony, or otherwise increase the application of a felony in a manner which could exacerbate the prison overcrowding crisis by expanding the availability or length of prison terms (such as extending the statute of limitations for felonies or constricting statutory parole standards). In addition, proposed expansions to the classification of felonies enacted last year by AB 109 (the 2011 Public Safety Realignment) which may be punishable in jail and not prison (Penal Code section 1170(h)) would be subject to ROCA because an offender's criminal record could make the offender ineligible for jail and therefore subject to state prison. Under these principles, ROCA has been applied as a content-neutral, provisional measure necessary to ensure that the Legislature does not erode progress towards reducing prison overcrowding by passing legislation which could increase the prison population. ROCA will continue until prison overcrowding is resolved. For the last several years, severe overcrowding in California's prisons has been the focus of evolving and expensive litigation. 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 (More) SB 1133 (Leno) PageJ 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, 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. Design capacity is the number of inmates a prison can house based on one inmate per cell, single-level bunks in dormitories, and no beds in places not designed for housing. Current design capacity in CDCR's 33 institutions is 79,650. On January 6, 2012, CDCR announced that California had cut prison overcrowding by more than 11,000 inmates over the last six months, a reduction largely accomplished by the passage of Assembly Bill 109. Under the prisoner-reduction order, the inmate population in California's 33 prisons must be no more than the following: 167 percent of design capacity by December 27, 2011 (133,016 inmates); 155 percent by June 27, 2012; 147 percent by December 27, 2012; and 137.5 percent by June 27, 2013. This bill does not aggravate the prison overcrowding crisis described above under ROCA. COMMENTS (More) SB 1133 (Leno) PageK 1. Need for This Bill According to the author: SB 1133 creates a new forfeiture statute that will give prosecutors a powerful tool to ensure that criminals convicted of sex trafficking minors are not able to retain any financial benefits from their participation in this horrendous crime. The bill not only expands the list of assets subject to forfeiture, thereby ensuring that these resources are not used in future crimes, but also includes a formula to redirect those resources to organizations that provide treatment and victim services for this vulnerable population. According to the U.S. Department of Justice, human trafficking and sexual exploitation is the fastest growing and second largest criminal enterprise in the world. Data gathered by the California Department of Justice states that 195,644 children ran away from home in 2009 and 2010. Scholars estimate that, within 48 hours one-third of those children would be lured or recruited into the underground world of prostitution and pornography. Even with an estimated 65,000 children lured into the sex trade in California in 2009 and 2010, only thirteen individuals were sent to prison in California for human trafficking during that time. 2. Sex Trafficking of Minors - Estimated Prevalence There appears to be general agreement that sex trafficking of children is increasing and profitable. However, the 2007 Final Report of the California Alliance to Combat Trafficking and (More) SB 1133 (Leno) PageL Slavery Task Force<3> noted that California lacks comprehensive statistics on human trafficking. Thus, many statistics on human trafficking in general, and sex trafficking of children in particular, are estimates. The task force report did cite statistics from various sources, including a study finding that 80 percent of documented cases in California occurred in urban areas and the majority of victims were non-citizens. Approximately 50 percent of human trafficking cases involved prostitution. A U.S. State Department report of global trafficking estimated that minors constituted 50 percent of trafficking victims. (2007 Alliance to Combat Trafficking. Final Report, pp. 33-39.<4>) The Federal Bureau of Investigation (FBI) conducts 24 Innocence Lost child sexual exploitation task forces and working groups across the country. Through 2007, 365 cases were opened and 281 child victims were located. The Shared Hope International non-profit organization has reported that approximately 100,000 domestic minors are sexually trafficked each year.<5> Numerous examples of trafficking cases were summarized in California Alliance Report. In 2001, a Berkeley man was prosecuted for smuggling 15 girls from India for labor and sexual exploitation. In 2000, a man was prosecuted for bringing women and girls from Mexico and forcing them to work as prostitutes in Long Beach. Traffickers in Los Angeles and San Francisco were prosecuted for forcibly taking 100 women from Korea to be sex workers in massage businesses. (2007 Alliance to Combat Trafficking, Final Report, p. 18.) 3. Criminal Profiteering Asset Forfeiture under Existing Law; Comparison with this Bill --------------------------- <3> The task force was administered by the California Attorney General's Office. <4> http://ag.ca.gov/publications/Human_Trafficking_Final_Report.pdf . The report includes citations to the each of the studies quoted in the report. <5> http://www.sharedhope.org/Portals/0/Documents/SHI_National_Report _on_DMST_2009.pdf (More) SB 1133 (Leno) PageM This bill creates a new forfeiture process for human trafficking of minors for the commercial sex trade. The forfeiture process in this bill is largely based on the existing criminal profiteering forfeiture law in Penal Code Section 186.2, with important differences. Current Criminal Profiteering Forfeiture Laws Criminal profiteering asset forfeiture is a criminal proceeding held in conjunction with the trial of the underlying criminal offense. Typically, the same jury that heard the criminal charges determines whether the defendant's assets were the ill-gotten gains of criminal profiteering. Where a pattern of criminal profiteering - organized crime for profit - is shown, the defendant must forfeit to the state all money and property derived from the pattern of organized crime. Under existing law the forfeited proceeds of criminal profiteering are usually placed in the county general fund with no directions for use. There are exceptions for forfeiture in child pornography cases, fraud against the state recycling program, human trafficking of minors for prostitution, and procurement of minors for prostitution. In child pornography cases, the money is deposited in the county's children's trust fund or the State Children's Trust Fund for child abuse and neglect prevention and intervention. Recycling forfeiture proceeds are deposited in a special account created under the Public Resources Code. (Pen. Code § 186.8; Welf. Inst. Code §§ 18966 and 18969.) Under current law, the proceeds of forfeiture in cases of human trafficking of minors for prostitution and procurement of minors for prostitution are distributed solely to the Victim-Witness Assistance Fund for child sexual exploitation and abuse counseling and prevention programs. Fifty percent of the funds are granted to community-based organizations that serve minor victims of human trafficking. SB 90 (Swanson) Chapter 457, Statutes 2011, broadened the (More) SB 1133 (Leno) PageN application of criminal profiteering forfeiture in cases involving sexually exploited minors. SB 90 provided that any crime in which the defendant sexually exploited a minor for commercial purposes could be the basis for criminal profiteering asset forfeiture, regardless of the specific statute violated by the defendant. That is, the defendant's conduct controls, not his or her crime of conviction. Difference between this Bill and Current Law Under the existing criminal asset forfeiture law, forfeiture is ordered after the defendant is convicted of a specified crime and the prosecution establishes that the defendant has been engaged in a pattern of criminal profiteering. The proceeds of criminal profiteering - the ill- (More) gotten gains of the organized crime - are forfeited to the state. The California law is modeled on or derived from federal racketeering laws - RICO.<6> This bill allows forfeiture where only a single human trafficking crime is established. The prosecutor need not establish a pattern of human trafficking to allow forfeiture. Without a pattern of forfeiture, relatively little money or property would be forfeited as the proceeds or profits of human trafficking. That is, a single crime or two would not produce much profit. However, and most important, this bill allows forfeiture of not just the profits of crime, but also the instrumentalities of the crime - the property used to commit the crime. Property is subject to forfeiture as an instrumentality if a substantial purpose of the use of the property was to facilitate sex trafficking of minors. This is true even where the prosecutor cannot trace a defendant's assets to trafficking profits. In discussions about the bill, the author argued that property used to facilitate sex trafficking of minors must be forfeited in order to reduce the ability of the perpetrator to commit additional crimes. Finally, as noted above, under existing law, all forfeited proceeds of sex trafficking of minors are distributed to the Victim-Witness Assistance Fund, with 50% available for grants to community-based organizations. Where forfeiture is done pursuant to this bill, 50% of the proceeds shall be distributed to the General Fund of the state or county, whichever jurisdiction or entity prosecuted the case. These funds can be used by the state or county for any purpose. In discussions on prior bills, advocates noted that human trafficking victims are often reluctant to report the crimes against them because they are afraid of reprisals and because they are often in the control of traffickers. In order to provide more resources and support for victims, the Legislature --------------------------- <6> Racketeer Influenced and Corrupt Organizations. (18 U.S.C. § 1961 et seq.) (More) SB 1133 (Leno) PageP directed that all proceeds of human trafficking of minors for commercial sex acts shall be used for programs benefiting victims, including directions that 50% of the money shall be provided to community-based organizations. (AB 90 (Swanson) Ch. 457, Stats. 2011.) However, the Attorney General (sponsor) has noted that investigating and prosecuting human trafficking cases are costly. This bill would provide some financial relief to the county or the state without providing a direct payment of "bounty" to the district attorney or the Attorney General, depending on which office prosecuted the case. That is, the decision to pursue forfeiture would not lead to a direct financial benefit to the prosecutor's office. Rather, 50% of the forfeiture proceeds would be deposited in the General Fund of the overall government entity. The Legislature or the board of supervisors could make deliberative decisions as to the use of forfeiture proceeds. Essentially, the Attorney General is arguing that in distributing forfeiture proceeds in these cases, a balance should be struck between victims' programs and resources for the state. Such a distribution could be mutually beneficial to victims and prosecutors, helping victims come forward and helping the state investigate and prosecute the cases. SHOULD FORFEITURE IN CASES INVOLVING SEX TRAFFICKING OF MINORS INCLUDE THE PROPERTY USED BY THE DEFENDANT TO COMMIT THE OFFENSE? SHOULD 50% OF FORFEITURE PROCEEDS IN CASES OF SEX TRAFFICKING OF MINORS BE DISTRIBUTED TO THE GENERAL FUND OF THE COUNTY OF THE STATE, DEPENDING ON WHETHER THE DISTRICT ATTORNEY OR THE ATTORNEY GENERAL PROSECUTED THE CASE? OR, SHOULD ALL THE FORFEITURE PROCEEDS IN CASES OF TRAFFICKING OF MINORS FOR SEXUAL COMMERCE CONTINUE TO BE DISTRIBUTED TO SB 1133 (Leno) PageQ PROGRAMS FOR VICTIMS OF THOSE CRIMES? 4. Nuisance Remedies in Human Trafficking Matters SB 677 (Yee) Chapter 625, Statutes of 2010, provided that where real property is used to facilitate human trafficking, the property can be declared a nuisance under the Red-Light Abatement law. (Pen. Code § 11225.) Under that law, the property can be closed for up to a year and a civil fine imposed of up to $25,000. 5. Drafting Error in the Bill as Amended April 18, 2012 This bill was most recently amended on April 18, 2012. The amendments included an inadvertent drafting error concerning the property subject to forfeiture under the process created by this bill. Specifically, the amendments did not provide that the proceeds of human trafficking of minors for sexual commerce - the profits made by the perpetrator of the crime - are subject to forfeiture, as well as the property used to commit the crimes. The bill will be amended to correct the drafting error, thereby authorizing forfeiture of the profits of human trafficking of minors for sexual commerce. ***************