BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 160


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          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


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          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








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             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  








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            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:








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          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


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          Analysis Prepared by:                                               
                          Gabriel Caswell / PUB. S. / (916) 319-3744  FN:  
          0000475