BILL ANALYSIS Ó AB 443 Page 1 ASSEMBLY THIRD READING AB 443 (Alejo) As Amended May 4, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | |----------------+------+----------------------+--------------------| |Public Safety |4-0 |Quirk, Melendez, | | | | | | | | | | | | | | |Jones-Sawyer, Lackey | | | | | | | |----------------+------+----------------------+--------------------| |Appropriations |14-0 |Gomez, Bigelow, | | | | |Bloom, Bonta, | | | | |Calderon, Chang, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Holden, Quirk, | | | | |Rendon, Wagner, Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: 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, this bill: AB 443 Page 2 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 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, 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 commission of one or more AB 443 Page 3 specified criminal profiteering related acts." 3)States 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 shall 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 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 thereto. 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 AB 443 Page 4 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 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 AB 443 Page 5 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. 6)States that the following assets of any person who is convicted a specified underlying offense and of engaging in a pattern of criminal profiteering activity are subject to forfeiture: a) Any property interest whether tangible or intangible, acquired through a pattern of criminal profiteering activity; and b) 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. 7)States that, notwithstanding that no response or claim has been filed, in all cases where property is forfeited, as specified, and, if necessary, sold by the Department of General Services (DGS) or local governmental entity, the money forfeited or the proceeds of sale shall be distributed by the state or local governmental entity as follows: AB 443 Page 6 a) To the bona fide or innocent purchaser, conditional sales vendor, or holder of a valid lien, mortgage, or security interest, if any, up to the amount of his or her interest in the property or proceeds, when the court declaring the forfeiture orders a distribution to that person. The court shall endeavor to discover all those lien holders and protect their interests and may, at its discretion, order the proceeds placed in escrow for up to an additional 60 days to ensure that all valid claims are received and processed; b) To DGS or local governmental entity for all expenditures made or incurred by it in connection with the sale of the property, including expenditures for any necessary repairs, storage, or transportation of any property seized, as specified; and c) To the State's General Fund or local governmental entity, whichever prosecutes. FISCAL EFFECT: According to the Assembly Appropriations Committee: 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 General Fund 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 when it occurs. AB 443 Page 7 COMMENTS: 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. "In addition, AB 443 aims to punish and deter the trafficking in firearms and endangered species by adding these crimes to the definition of 'criminal profiteering activity,' making the profits of these crimes subject to forfeiture." Analysis Prepared by: Gabriel Caswell / PUB. S. / (916) 319-3744 FN: AB 443 Page 8 0000476