BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 443 (Alejo) - Forfeiture
          
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          |Version: August 18, 2015        |Policy Vote: PUB. S. 7 - 0      |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date:  August 24, 2015  |Consultant: Jolie Onodera       |
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          This bill meets the criteria for referral to the Suspense File. 

          

          Bill  
          Summary:  AB 443 would permit, until January 1, 2019,  
          prosecutors in a criminal profiteering matter to file a petition  
          of forfeiture of assets and property of individuals associated  
          with transnational criminal organizations up to 60 days prior to  
          the filing of criminal charges, as specified. This bill would  
          require the Attorney General to submit a specified report to the  
          Legislature and Governor by January 1, 2018.


          Fiscal  
          Impact:  
           One-time minor workload costs likely less than $10,000  
            (General Fund), to the Department of Justice (DOJ) to gather,  
            compile, and submit the detailed report.  
           Potentially significant increase in trial court costs (General  
            Fund*) to review additional petitions for forfeiture that  
            otherwise would not have been filed and/or filed in  
            conjunction with criminal charges, and for motions for the  
            return of property on grounds of no probable cause. 







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           Potential future increase in state and local revenues to the  
            extent the provisions of this bill result in additional asset  
            forfeiture proceeds that would not have occurred under  
            existing law.
          *Trial Court Trust Fund


          Background:  Under existing law, property acquired through or proceeds of  
          criminal profiteering (organized crime) activity is subject to  
          forfeiture. Under existing state law, a prosecutor is required  
          to file a petition of forfeiture in conjunction with the  
          criminal proceeding for the underlying offense and provide  
          notice to persons who may have an interest in the property that  
          is alleged to be subject to forfeiture. (Penal Code § 186.4.)
          When or after charges and a forfeiture petition are filed in a  
          criminal profiteering forfeiture case, existing state law  
          provides that a prosecutor may move the court for orders  
          preserving the defendant's assets that may be subject to  
          forfeiture through the following means: 1) an injunction to  
          restrain all interested parties from transferring, encumbering,  
          or otherwise disposing of property subject to forfeiture, 2)  
          appointment of a receiver to manage the property, or 3)  
          requirement of a surety bond to preserve the interests of  
          interested parties. (Penal Code § 186.6.)


          In contrast to California law, federal law authorizes a  
          pre-indictment seizure of assets and property with or without  
          prior notice. A prosecutor may request a temporary restraining  
          order without notice if he or she can establish probable cause  
          that, upon conviction, the property will be subject to  
          forfeiture, and that notice will jeopardize the availability of  
          the property for future forfeiture. The temporary restraining  
          order, if granted, expires after 14 days unless extended for  
          good cause shown or unless the party against whom it is entered  
          consents to an extension for a longer period. Alternatively, a  
          federal prosecutor can request a noticed hearing where he or she  
          must demonstrate that there is a substantial probability that  
          the government will prevail on the issue of forfeiture, failure  
          to allow seizure will result in the property being destroyed or  
          removed from the jurisdiction, and the need to preserve the  
          seized property outweighs the hardship on the opposing party. An  
          order so entered is effective for up to 90 days, unless extended  
          by the court for good cause shown or unless an indictment has  








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          been filed. (18 U.S.C. § 1963(d).)

          The California Attorney General's report, Gangs Beyond Borders:  
          California and the Fight Against Transnational Organized Crime  
          (March 2014), included a recommendation for the Legislature to  
          amend California law to enable prosecutors to temporarily freeze  
          the assets of transnational criminal organizations and their  
          gang associates before the filing of an indictment. In summary,  
          the report stated, "Under current law, transnational criminal  
          organizations are often given the equivalent of advance warning  
          that their criminal proceeds and assets are about to be seized  
          by law enforcement. That is because of a legal void that  
          prevents the seizure of any assets until the filing of a formal  
          criminal indictment. As a result, in cases where illicit assets  
          are discovered before an indictment can be filed, criminals have  
          the chance to remove their assets before they can be taken. This  
          loophole must be eliminated by empowering law enforcement to  
          temporarily freeze an organization's illicit proceeds or  
          property in advance of a formal prosecution." (Executive  
          Summary, vi.)


          This bill seeks to codify the specified recommendation in the  
          Attorney General report.




          Proposed Law:  
           This bill would permit, until January 1, 2019, a prosecutor to  
          seize assets and property of individuals associated with  
          transnational criminal organizations, as defined, up to 60 days  
          prior to the filing of criminal charges pursuant to criminal  
          profiteering forfeiture proceedings. Specifically, this bill:
             Authorizes a prosecuting agency to file a petition for  
             forfeiture in cases of criminal profiteering prior to  
             commencement of criminal proceedings upon the following  
             showing: 
                  o         The value of the assets to be seized exceeds  
                    $100,000. 
                  o         There is a substantial probability that the  
                    prosecuting agency will file a criminal complaint or  
                    seek a grand jury indictment against the defendant. 









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                  o         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. 
                  o         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. 
                  o         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. 
             Defines, for purposes of criminal profiteering forfeiture, a  
             "transnational criminal organization" as "any 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 specified criminal  
             profiteering-related acts. 
             States that if a forfeiture petition is filed prior to the  
             filing of the complaint in a criminal action, the petition  
             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. 
             Provides that if a forfeiture petition is dismissed because  
             criminal charges were not filed within 60 days, the motion  
             shall not be re-filed, except upon the filing of a criminal  
             complaint. 
             Provides that if a forfeiture petition is filed prior to the  
             filing of criminal charges, a person claiming an interest in  
             the property 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 otherwise subject to court  
             order of forfeiture or destruction by another specified  
             statute. 
             Provides that a motion for return of property 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  








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             seized property released to the person it determines is  
             entitled to the property.
             On or before January 1, 2018, requires the Attorney General  
             to provide a report to specified committees of the  
             Legislature and the Governor. The report is to include, but  
             not be limited to, the following information regarding  
             petitions filed for forfeiture under the provisions of this  
             bill:
                 o        The number of cases in which the process  
                   authorized by this bill has been used.
                 o        The value and kinds of property seized in each  
                   case.
                 o        The criminal charges filed, if any, in  
                   conjunction with each forfeiture action.
                 o        The number of cases in which related charges  
                   were not filed.
                 o        The number of cases in which property was  
                   returned because charges were not filed.
                 o        The length of time between dismissal, if any, of  
                   the forfeiture petition and the return of the property,  
                   as specified.
                 o        The number of cases in which property was  
                   returned pursuant to a motion filed, as specified.


          Staff  
          Comments:  The DOJ has indicated one-time minor workload to  
          gather, compile, and submit the mandated legislative report. The  
          trial courts could incur additional workload to review  
          additional petitions for forfeiture that otherwise would have  
          been filed in conjunction with criminal charges or may not have  
          been filed at all. In the absence of available data to determine  
          the volume of petitions to review, however, the magnitude of the  
          additional court workload is unknown at this time. To the extent  
          the provisions of this measure result in additional asset  
          forfeiture proceeds would result in increased state and local  
          revenue of an unknown but potentially significant amount.


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