Amended in Senate August 18, 2015

Amended in Assembly May 4, 2015

Amended in Assembly April 21, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 443

Introduced by Assembly Member Alejo

February 23, 2015

An act to begin delete amend end delete begin insert amend, repeal, and add end insert Sections 186.2 and 186.4 of the Penal Code, relating to forfeiture.

LEGISLATIVE COUNSEL’S DIGEST

AB 443, as amended, Alejo. Forfeiture.

Existing law subjects property acquired through or as proceeds of criminal profiteering activity to forfeiture. Existing law defines criminal profiteering activity as any specified acts or threats made for financial gain or advantage. Existing law requires a prosecuting agency to file a petition of forfeiture in conjunction with the criminal proceeding for the underlying offense.

This bill would allow the prosecuting agency to file a petition of forfeiture prior to the commencement of the underlying criminal proceeding if the value of the assets seized exceeds $100,000, there is a substantial probability that the prosecuting agency will file a criminal complaint, there is a substantial probability the prosecuting agency will prevail on the issue of forfeiture and failure to enter the order will result in the property being destroyed or otherwise removed from the jurisdiction of the court, the need to preserve the property outweighs the hardship on any party against whom the order is entered, and there is a substantial probability that the assets subject to forfeiture represent direct or indirect proceeds of criminal activity committed for the benefit of, at the direction of, or in association with, a transnational criminal organization, as defined. The bill would allow a person claiming an interest in the property or proceeds to move for return of the property on the grounds there is not probable cause to believe that the property is subject to forfeiture, and if the prosecuting agency does not establish substantial probability that the property is subject to forfeiture the court begin delete shall end delete begin insert would be required to end insert order the seized property returned. begin insert The bill would require the Attorney General, on or before January 1, 2018, to report to the Governor and specified committees on the use of these proceedings. The bill would provide for the repeal of these changes on January 1, 2019. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 186.2 of the Penal Code is amended to
read:

186.2.  

For purposes of this chapter, the following definitions
apply:

(a) “Criminal profiteering activity” means 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 sections:

(1) Arson, as defined in Section 451.

(2) Bribery, as defined in Sections 67, 67.5, and 68.

(3) Child pornography or exploitation, as defined in subdivision
(b) of Section 311.2, or Section 311.3 or 311.4, which may be
prosecuted as a felony.

(4) Felonious assault, as defined in Section 245.

(5) Embezzlement, as defined in Sections 424 and 503.

(6) Extortion, as defined in Section 518.

(7) Forgery, as defined in Section 470.

(8) Gambling, as defined in Sections 337a to 337f, inclusive,
and Section 337i, except the activities of a person who participates
solely as an individual bettor.

(9) Kidnapping, as defined in Section 207.

(10) Mayhem, as defined in Section 203.

(11) Murder, as defined in Section 187.

(12) Pimping and pandering, as defined in Section 266.

(13) Receiving stolen property, as defined in Section 496.

(14) Robbery, as defined in Section 211.

(15) Solicitation of crimes, as defined in Section 653f.

(16) Grand theft, as defined in Section 487 or subdivision (a)
of Section 487a.

(17) Trafficking in controlled substances, as defined in Sections
11351, 11352, and 11353 of the Health and Safety Code.

(18) Violation of the laws governing corporate securities, as
defined in Section 25541 of the Corporations Code.

(19) Any of the offenses contained in Chapter 7.5 (commencing
with Section 311) of Title 9, relating to obscene matter, or in
Chapter 7.6 (commencing with Section 313) of Title 9, relating to
harmful matter that may be prosecuted as a felony.

(20) Presentation of a false or fraudulent claim, as defined in
Section 550.

(21) False or fraudulent activities, schemes, or artifices, as
described in Section 14107 of the Welfare and Institutions Code.

(22) Money laundering, as defined in Section 186.10.

(23) Offenses relating to the counterfeit of a registered mark,
as specified in Section 350.

(24) Offenses relating to the unauthorized access to computers,
computer systems, and computer data, as specified in Section 502.

(25) Conspiracy to commit any of the crimes listed above, as
defined in Section 182.

(26) Subdivision (a) of Section 186.22, or a felony subject to
enhancement as specified in subdivision (b) of Section 186.22.

(27) Any offenses related to fraud or theft against the state’s
beverage container recycling program, including, but not limited
to, those offenses specified in this subdivision and those criminal
offenses specified in the California Beverage Container Recycling
and Litter Reduction Act, commencing at Section 14500 of the
Public Resources Code.

(28) Human trafficking, as defined in Section 236.1.

(29) Any crime in which the perpetrator induces, encourages,
or persuades a person under 18 years of age to engage in a
commercial sex act. For purposes of this paragraph, a commercial
sex act means any sexual conduct on account of which anything
of value is given or received by any person.

(30) Any crime in 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. For purposes of
this paragraph, a commercial sex act means any sexual conduct
on account of which anything of value is given or received by any
person.

(31) Theft of personal identifying information, as defined in
Section 530.5.

(32) Offenses involving the theft of a motor vehicle, as specified
in Section 10851 of the Vehicle Code.

(33) Abduction or procurement by fraudulent inducement for
prostitution, as defined in Section 266a.

(b) “Organized crime” means 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 in subdivision (f) of Section 186.22.
“Organized crime” also means false or fraudulent activities,
schemes, or artifices, as described in Section 14107 of the Welfare
and Institutions Code, and the theft of personal identifying
information, as defined in Section 530.5.

(c) (1) “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.

(C) Were committed as a criminal activity of organized crime.

(2) Acts that would constitute a “pattern of criminal profiteering
activity” may not be used by a prosecuting agency to seek the
remedies provided by this chapter unless the underlying offense
occurred after the effective date of this chapter and the prior act
occurred within 10 years, excluding any period of imprisonment,
of the commission of the underlying offense. A prior act may not
be used by a prosecuting agency to seek remedies provided by this
chapter if a prosecution for that act resulted in an acquittal.

(d) “Prosecuting agency” means the Attorney General or the
district attorney of any county.

(e) “Transnational criminal organization” means an ongoing
organization, group, or association having leaders, associates,
operations, or activities in more than one country, with one of its
primary activities being the commission of one or more of the
criminal acts enumerated in paragraphs (1) to (25), inclusive, or
(31) to (33), inclusive, of subdivision (e) of Section 186.22.

(f) “Underlying offense” means an offense enumerated in
subdivision (a) for which the defendant is being prosecuted.

begin insert

(g) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 186.2 is added to the end insert begin insert Penal Code end insert begin insert , to read: end insert

begin insert

begin insert 186.2. end insert   

For purposes of this chapter, the following definitions
apply:

(a) “Criminal profiteering activity” means 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 sections:

(1) Arson, as defined in Section 451.

(2) Bribery, as defined in Sections 67, 67.5, and 68.

(3) Child pornography or exploitation, as defined in subdivision
(b) of Section 311.2, or Section 311.3 or 311.4, which may be
prosecuted as a felony.

(4) Felonious assault, as defined in Section 245.

(5) Embezzlement, as defined in Sections 424 and 503.

(6) Extortion, as defined in Section 518.

(7) Forgery, as defined in Section 470.

(8) Gambling, as defined in Sections 337a to 337f, inclusive,
and Section 337i, except the activities of a person who participates
solely as an individual bettor.

(9) Kidnapping, as defined in Section 207.

(10) Mayhem, as defined in Section 203.

(11) Murder, as defined in Section 187.

(12) Pimping and pandering, as defined in Section 266.

(13) Receiving stolen property, as defined in Section 496.

(14) Robbery, as defined in Section 211.

(15) Solicitation of crimes, as defined in Section 653f.

(16) Grand theft, as defined in Section 487 or subdivision (a)
of Section 487a.

(17) Trafficking in controlled substances, as defined in Sections
11351, 11352, and 11353 of the Health and Safety Code.

(18) Violation of the laws governing corporate securities, as
defined in Section 25541 of the Corporations Code.

(19) Any of the offenses contained in Chapter 7.5 (commencing
with Section 311) of Title 9, relating to obscene matter, or in
Chapter 7.6 (commencing with Section 313) of Title 9, relating to
harmful matter that may be prosecuted as a felony.

(20) Presentation of a false or fraudulent claim, as defined in
Section 550.

(21) False or fraudulent activities, schemes, or artifices, as
described in Section 14107 of the Welfare and Institutions Code.

(22) Money laundering, as defined in Section 186.10.

(23) Offenses relating to the counterfeit of a registered mark,
as specified in Section 350.

(24) Offenses relating to the unauthorized access to computers,
computer systems, and computer data, as specified in Section 502.

(25) Conspiracy to commit any of the crimes listed above, as
defined in Section 182.

(26) Subdivision (a) of Section 186.22, or a felony subject to
enhancement as specified in subdivision (b) of Section 186.22.

(27) Any offenses related to fraud or theft against the state’s
beverage container recycling program, including, but not limited
to, those offenses specified in this subdivision and those criminal
offenses specified in the California Beverage Container Recycling
and Litter Reduction Act, commencing at Section 14500 of the
Public Resources Code.

(28) Human trafficking, as defined in Section 236.1.

(29) Any crime in which the perpetrator induces, encourages,
or persuades a person under 18 years of age to engage in a
commercial sex act. For purposes of this paragraph, a commercial
sex act means any sexual conduct on account of which anything
of value is given or received by any person.

(30) Any crime in 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. For purposes
of this paragraph, a commercial sex act means any sexual conduct
on account of which anything of value is given or received by any
person.

(31) Theft of personal identifying information, as defined in
Section 530.5.

(32) Offenses involving the theft of a motor vehicle, as specified
in Section 10851 of the Vehicle Code.

(33) Abduction or procurement by fraudulent inducement for
prostitution, as defined in Section 266a.

(b) “Organized crime” means 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 in subdivision (f) of Section 186.22.
“Organized crime” also means false or fraudulent activities,
schemes, or artifices, as described in Section 14107 of the Welfare
and Institutions Code, and the theft of personal identifying
information, as defined in Section 530.5.

(c) (1) “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.

(C) Were committed as a criminal activity of organized crime.

(2) Acts that would constitute a “pattern of criminal profiteering
activity” may not be used by a prosecuting agency to seek the
remedies provided by this chapter unless the underlying offense
occurred after the effective date of this chapter and the prior act
occurred within 10 years, excluding any period of imprisonment,
of the commission of the underlying offense. A prior act may not
be used by a prosecuting agency to seek remedies provided by this
chapter if a prosecution for that act resulted in an acquittal.

(d) “Prosecuting agency” means the Attorney General or the
district attorney of any county.

(e) “Underlying offense” means an offense enumerated in
subdivision (a) for which the defendant is being prosecuted.

(f) This section shall become operative on January 1, 2019.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 186.4 of the Penal Code is amended to read:

186.4.  

(a) (1) The prosecuting agency shall, in conjunction
with the criminal proceeding, file a petition of forfeiture with the
superior court of the county in which the defendant has been
charged with the underlying criminal offense, which shall allege
that the defendant has engaged in a pattern of criminal profiteering
activity, including the acts or threats chargeable as crimes and the
property forfeitable pursuant to Section 186.3.

(2) The prosecuting agency may, prior to the commencement
of a criminal proceeding, file a petition of forfeiture with the
superior court of the county in which the defendant is being
investigated, which shall allege that the defendant has engaged in
a pattern of criminal profiteering activity, including the acts or
threats chargeable as crimes and the property forfeitable pursuant
to Section 186.3, provided the court determines that:

(A) The value of the assets to be seized exceeds one hundred
thousand dollars ($100,000).

(B) There is a substantial probability that the prosecuting agency
will file a criminal complaint or seek a grand jury indictment
against the defendant.

(C) There is a substantial probability that the prosecuting agency
will prevail on the issue of forfeiture and that failure to enter the
order will result in the property being destroyed, removed from
the jurisdiction of the court, or otherwise made unavailable for
forfeiture.

(D) The need to preserve the availability of the property through
the entry of the requested order outweighs the hardship on any
party against whom the order is to be entered.

(E) There is a substantial probability that the assets subject to
forfeiture represent direct or indirect proceeds of criminal activity
committed for the benefit of, at the direction of, or in association
with, a transnational criminal organization, as defined in Section
186.2.

(b) The prosecuting agency shall make service of process of a
notice regarding that petition upon every individual who may have
a property interest in the alleged proceeds, which notice shall state
that any interested party may file a verified claim with the superior
court stating the amount of their claimed interest and an affirmation
or denial of the prosecuting agency’s allegation. If the notices
cannot be given by registered mail or personal delivery, the notices
shall be published for at least three successive weeks in a
newspaper of general circulation in the county where the property
is located. If the property alleged to be subject to forfeiture is real
property, the prosecuting agency shall, at the time of filing the
petition of forfeiture, record a lis pendens in each county in which
the real property is situated which specifically identifies the real
property alleged to be subject to forfeiture. The judgment of
forfeiture shall not affect the interest in real property of any third
party which was acquired prior to the recording of the lis pendens.

(c) (1) If a forfeiture petition is filed pursuant to paragraph (2)
of subdivision (a), prior to the filing of the complaint in a criminal
action, a person claiming an interest in the property or proceeds
may move for the return of the property on the grounds that there
is not probable cause to believe the property is forfeitable pursuant
to Section 186.3 and is not automatically subject to court order of
forfeiture or destruction by another provision of this chapter. The
motion may be made prior to, during, or subsequent to, the filing
of criminal charges or a grand jury indictment. If the prosecuting
agency does not establish a substantial probability that the property
is subject to forfeiture, the court shall order the seized property
released to the person it determines is entitled to the property.

(2) If a claimant’s motion filed pursuant to paragraph (1) is
granted, the people may, within 15 days, file a petition for a writ
of mandate or prohibition seeking appellate review of the ruling.

(d) If a forfeiture petition is filed pursuant to paragraph (2) of
subdivision (a), prior to the filing of the complaint in a criminal
action, the motion and any injunctive order shall be dismissed if
a criminal complaint or grand jury indictment is not filed within
60 days of the grant of the motion. If a forfeiture petition is
dismissed pursuant to this subdivision, the motion shall not be
refiled, except upon the filing of a criminal complaint.

(e) All notices shall set forth the time within which a claim of
interest in the property seized is required to be filed pursuant to
Section 186.5.

begin insert

(f) On or before January 1, 2018, the Attorney General shall
report to the Senate Committee on Public Safety, the Assembly
Committee on Public Safety, and the Governor. The report shall
include, but not be limited to, the following information regarding
petitions filed pursuant to paragraph (2) of subdivision (a) between
January 1, 2016, and January 1, 2018:

end insert begin insert

(1) The number of cases in which the process authorized by
paragraph (2) of subdivision (a) has been used.

end insert begin insert

(2) The value and kinds of property seized in each case.

end insert begin insert

(3) The criminal charges filed, if any, in conjunction with each
forfeiture action.

end insert begin insert

(4) The number of cases in which related charges were not filed.

end insert begin insert

(5) The number of cases in which property was returned because
charges were not filed.

end insert begin insert

(6) The length of time between dismissal, if any, of the forfeiture
petition and the return of the property pursuant to subdivision (d)
in each case.

end insert begin insert

(7) The number of cases in which property was returned
pursuant to a motion filed under paragraph (1) of subdivision (c).

end insert begin insert

(g) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 186.4 is added to the end insert begin insert Penal Code end insert begin insert , to read: end insert

begin insert

begin insert 186.4. end insert   

(a) The prosecuting agency shall, in conjunction with
the criminal proceeding, file a petition of forfeiture with the
superior court of the county in which the defendant has been
charged with the underlying criminal offense, which shall allege
that the defendant has engaged in a pattern of criminal profiteering
activity, including the acts or threats chargeable as crimes and
the property forfeitable pursuant to Section 186.3.

(b) The prosecuting agency shall make service of process of a
notice regarding that petition upon every individual who may have
a property interest in the alleged proceeds, which notice shall state
that any interested party may file a verified claim with the superior
court stating the amount of their claimed interest and an
affirmation or denial of the prosecuting agency’s allegation. If the
notices cannot be given by registered mail or personal delivery,
the notices shall be published for at least three successive weeks
in a newspaper of general circulation in the county where the
property is located. If the property alleged to be subject to
forfeiture is real property, the prosecuting agency shall, at the
time of filing the petition of forfeiture, record a lis pendens in each
county in which the real property is situated which specifically
identifies the real property alleged to be subject to forfeiture. The
judgment of forfeiture shall not affect the interest in real property
of any third party which was acquired prior to the recording of
the lis pendens.

(c) All notices shall set forth the time within which a claim of
interest in the property seized is required to be filed pursuant to
Section 186.5.

(d) This section shall become operative on January 1, 2019.

end insert