BILL ANALYSIS Ó
AB 443
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
443 (Alejo) - As Amended May 4, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill permits prosecutors to seize assets and property of
individuals associated with transnational criminal organizations
up to 60 days prior to the filing of criminal charges pursuant
to criminal profiteering forfeiture proceedings. Specifically,
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this bill:
1)Provides that 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 will be charged with a criminal offense, which must
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, provided
the court determines that:
a) The value of the assets to be seized exceeds $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.
2)Defines, for purposes of criminal profiteering forfeiture, a
"transnational criminal organization" as "any ongoing
organization, association, or group, having leaders,
associates, operations, or activities in more than one
country, with one of its primary activities being the
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commission of one or more specified criminal profiteering
related acts."
3)Requires that if a forfeiture petition is filed prior to the
filing of the complaint in a criminal action, the motion and
any injunctive order shall be dismissed by operation of law
unless a criminal complaint or grand jury indictment is filed
within 60 days of the grant of the motion. If a forfeiture
petition is dismissed pursuant to this subdivision, the motion
will not be refiled, except upon the filing of a criminal
complaint.
4)Provides that if a forfeiture petition is filed 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 and is
not automatically subject to court order of forfeiture or
destruction by another provision of law. Also, if the
prosecuting agency does not establish a substantial
probability that the property is subject to forfeiture, the
court is required to order the seized property released to the
person it determines is entitled thereto.
FISCAL EFFECT:
1)Unknown, probably minor impact to the courts.
2)Minor absorbable cost to the Department of Justice (DOJ). The
assumption is made that DOJ will take the lead prosecutor role
in most transnational criminal organization cases.
3)Unknown potential GF or local revenue if assets are seized
that would not have been available for seizure in the absence
of this bill, and are eventually forfeited. The frequency is
unknown, but it would probably be in excess of $100,000 if and
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when it occurs.
COMMENTS:
1)Purpose. According to the author, "AB 443 seeks to empower a
prosecuting agency's ability to effectively dismantle criminal
organizations by targeting the proceeds of criminal activity
while respecting the due process rights of suspects,
arrestees, and criminal defendants."
"Specifically, AB 443 provides a prosecuting agency with the
ability to freeze criminal assets before the commencement of a
criminal proceeding. Waiting until the filing of a criminal
proceeding to bring a petition for asset forfeiture brings the
risk of providing an early notification to the criminal
organization under investigation. Criminal organizations
benefit from the early warning system by transferring or
removing their assets from the jurisdiction of the court.
While the criminal proceeding may affect an individual in the
criminal organization, the criminal operations of these gangs
can proceed as their funds remain available."
"Although this tool allows for a forfeiture petition to be
filed before the filing of a criminal complaint, the bill
includes several safeguards to protect the due process rights
of criminal suspects, arrestees, and defendants. The bill
strikes an appropriate line between these constitutional
rights and the need for protecting the public from organized
crime. Many of these organizations are operating in cities
throughout the state.
2)Background. Current law, the California Control Profits of
Organized Crime Act, states 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 also states that the intent of
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the Legislature is that the "California Control of Profits of
Organized Crime Act" be used by prosecutors to punish and
deter such activities.
Current law states that specific assets of any person who is
convicted of a specified underlying offense and of engaging in
a pattern of criminal profiteering activity are subject to
forfeiture. In all cases where property is forfeited, as
specified, and, if necessary, sold by the Department of
General Services (DGS) or a local governmental entity, the
money forfeited or the proceeds of sale are generally
distributed by the state or local governmental to the victim,
the State GF or local general fund (depend on the prosecuting
agency), and the agency responsible for the sale of assets to
cover expenses associated with the sale.
3)Argument in Support: According to the Attorney General, "AB
443 has been carefully crafted to preserve due process rights.
Moreover, existing law has protections that would apply to
any changes made by AB 443. These include:
the burden to prove that the assets are subject to
forfeiture and tied to criminal activity lies on the state
the state must prove their tie by the legal standard
"beyond a reasonable doubt"
any proceeds from the forfeiture of assets or monies
does not go back to the seizing entity.
"The first two provisions ensure one of the cornerstones of
our legal system: innocent until proven guilty. Laws that
permit the seizure of assets prior to a conviction receive
criticism by placing the burden of proof on the defendant.
States that place the burden of proof on the owner create a
barrier to due process and force innocent owners to navigate
the legal system. California law protects innocent owners by
placing the burden on the government entity. Moreover, the
standard of proof required increases the burden. As reported
by the Institute for Justice, 'beyond a reasonable doubt' is
the hardest standard under which it is hardest to forfeit
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assets. Not only does the government have the responsibility
to prove the assets are subject to forfeiture but it must also
do so by meeting the highest standards of a courtroom.
"California law does not create an incentive for law
enforcement to seize assets."
"While California law currently ensures these protections, AB
443 also implements further provisions to safeguard due
process. Foremost, the bill merely establishes a process by
which a prosecuting agency can petition to freeze assets for
an individual suspected of engaging in a pattern of criminal
profiteering activity. The power to approve a petition for
the preservation of assets will remain with the courts. Given
this provision, no law enforcement or prosecuting agency will
have the ability to freeze or seize assets without the
approval of the petition. This will protect many assets from
seizure. For example, an individual pulled over for a traffic
stop, found in the possession of a large sum of money, may not
have his or her assets frozen. The law enforcement officer
will not have the approval of a court as no petition was
sought beforehand nor does a traffic stop count as 'engaged in
a pattern of criminal profiteering."
1)Argument in Opposition: According to California Attorneys for
Criminal Justice, "This bill allows a prosecuting agency to
file a petition of forfeiture prior to the commencement of the
underlying criminal proceeding if there is a 'substantial
probability' that the prosecuting agency will file a criminal
complaint and there is a 'substantial probability' the
prosecuting agency will prevail on the issue of forfeiture.
"As written, the agency anticipating the commencement of
criminal proceedings can seize first without sufficient
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evidence to bring charges. This will cause the forfeiture of
an innocent owner's valuable property without provision of any
concomitant avenue of Due Process. The implied hearing rights
suggested in context of pre-complaint seizure would be a
plenary action in the superior court. In other words, an
action that the aggrieved property owner would have to
initiate and pay for, or suffer forfeiture. The provision in
AB 443 dismissing the motion by 'operation of law' does
absolutely nothing to restore the interim value of property
that has been seized. The interim harm could be significant to
someone who is not charged with a crime, especially if all his
or her assets are seized for the two-month period."
2)Related Legislation:
a) AB 160 (Dababneh), pending in Revenue and Taxation
suspense file, adds piracy, insurance fraud, and tax fraud
to the list of crimes for which a prosecutor can seek
criminal profiteering forfeiture. Additionally, amends the
organized crime element of criminal profiteering to provide
additional examples of matter which constitute criminal
profiteering. AB 160 is awaiting a hearing in this
committee.
b) SB 298 (Block), pending in Senate Appropriations, adds
money laundering for criminal profiteering to the crimes
for which a wiretap may be sought.
Analysis Prepared by:Pedro R. Reyes / APPR. / (916)
319-2081
AB 443
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