BILL ANALYSIS Ó AB 160 Page 1 ASSEMBLY THIRD READING AB 160 (Dababneh) As Amended May 5, 2015 2/3 vote -------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | |----------------+------+----------------------+---------------------| |Public Safety |7-0 |Quirk, Melendez, | | | | |Gonzalez, | | | | |Jones-Sawyer, Lackey, | | | | |Low, Santiago | | | | | | | |----------------+------+----------------------+---------------------| |Revenue & |9-0 |Ting, Brough, | | |Taxation | |Dababneh, Gipson, | | | | |Roger Hernández, | | | | |Mullin, Patterson, | | | | |Quirk, Wagner | | | | | | | |----------------+------+----------------------+---------------------| |Appropriations |15-0 |Gomez, Bigelow, | | | | |Bloom, Bonta, | | | | |Calderon, Chang, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Holden, Quirk, | | | | |Rendon, Wagner, | | | | |Weber, Wood | | -------------------------------------------------------------------- AB 160 Page 2 SUMMARY: Expands the list of crimes that allow for forfeiture of assets and prosecution of criminal profiteering and broadens the definition of criminal profiteering by broadening the organized crime element to include other specified offenses. Specifically, this bill: 1)Expands the list of offenses which can serve as a basis for a criminal profiteering action to include piracy and insurance fraud. 2)Expands provisions from the "organized crime" element as it pertains to criminal profiteering by the provisions that require that the nature of the conspiratorial action be of an organized nature to include such examples as: a) Pimping and pandering; b) Counterfeiting of any registered trademark; c) Illegal piracy of recordings or audiovisual works; d) Embezzlement; e) Securities fraud; f) State tax fraud; g) Insurance fraud; h) Grand theft; i) Money laundering; and AB 160 Page 3 j) Forgery. EXISTING LAW: 1)Establishes the "California Control Profits of Organized Crime Act." 2)Declares that the Legislature finds and declares that an effective means of punishing and deterring criminal activities of organized crime is through the forfeiture of profits acquired and accumulated as a result of such criminal activities. It is the intent of the Legislature that the "California Control of Profits of Organized Crime Act" be used by prosecutors to punish and deter only such activities. 3)Defines "criminal profiteering activity" as 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 offenses: arson, bribery, child pornography or exploitation, felonious assault, embezzlement, extortion, forgery, gambling, kidnapping, mayhem, murder, pimping and pandering, receiving stolen property, robbery, solicitation of crimes, grand theft, trafficking in controlled substances, violation of the laws governing corporate securities, specified crimes involving obscenity, presentation of a false or fraudulent claim, false or fraudulent activities, schemes, or artifices, money laundering, offenses relating to the counterfeit of a registered mark, offenses relating to the unauthorized access to computers, computer systems, and computer data, conspiracy to commit any of the crimes listed above, offenses committed on behalf of a criminal street gang, offenses related to fraud or theft against the state's beverage container recycling program, human trafficking, any crime in which the perpetrator induces, encourages, or persuades a person under 18 years of age to engage in a commercial sex act, any crime in AB 160 Page 4 which the perpetrator, through force, fear, coercion, deceit, violence, duress, menace, or threat of unlawful injury to the victim or to another person, causes a person under 18 years of age to engage in a commercial sex act, theft of personal identifying information, offenses involving the theft of a motor vehicle, abduction or procurement by fraudulent inducement for prostitution. 4)Defines "pattern of criminal profiteering activity" means engaging in at least two incidents of criminal profiteering, as defined by this chapter, that meet the following requirements: a) Have the same or a similar purpose, result, principals, victims, or methods of commission, or are otherwise interrelated by distinguishing characteristics; b) Are not isolated events; and/or c) Were committed as a criminal activity of organized crime. 5)Defines "organized crime" as a 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. "Organized crime" also means false or fraudulent activities, schemes, or artifices, as defined, and the theft of personal identifying information, as defined. FISCAL EFFECT: According to the Assembly Appropriations Committee: AB 160 Page 5 1)Minor and absorbable costs to state and local law enforcement; minor and absorbable costs to the Board of Equalization (BOE) to administer the tax. 2)Estimated General Fund revenue increase of approximately $1.1 million per year based on California's pro rata share of total seizures of counterfeit label and illicit label goods in the United States and the taxable value of those goods. COMMENTS: According to the author, "Criminals should not profit from their crimes. Unfortunately, California's asset forfeiture laws for non-drug related crimes, like financial crimes and other white collar offenses, are so poorly drafted that they are almost unusable by District Attorneys and the Attorney General's office. As a result, white collar victims who sometimes have lost everything due to a defendant's fraud, often cannot collect restitution to make them whole. Adding more examples of crimes to the definition of "organized crime" will ensure that prosecutors are able to seize unlawfully obtained assets. "Equally problematic, underground economy crimes like tax evasion that drain public resources from our schools, health services and law enforcement, are not even included among the list of crimes in which asset forfeiture is available. As found by the Little Hoover Commission, after an investigation of over a year, in the current climate, 'Crime Actually Does Pay - people participate in the underground economy because the rewards outweigh the risk.' (Little Hoover Commission Report # 226, p. 30.) This bill fixes the internal inconsistencies in the language of the state's asset forfeiture laws, and adds certain underground economy crimes to the list of offenses that can trigger asset forfeiture of criminal profits. This bill is to make it so that crime no longer pays in California." AB 160 Page 6 Analysis Prepared by: Gabriel Caswell / PUB. S. / (916) 319-3744 FN: 0000475